Napier under fire from Redland investors
Friday 26 September 1997
Announcing lower-than-expected interim results, Redland said it expected profits in its dominant roofing business to be down this year after an unexpected slide in the German market. Further gloom was added when the group said its forecast of a 7 per cent underlying decline in volumes in Germany this year would be followed by a further 4 per cent next, to be accompanied by selective price cuts.
Mr Napier said he expected his shareholders to be calling for his head yesterday, but he claimed he had done everything he promised to turn round the business. "Is there anyone else out there who could have done it faster and quicker?"
The news sent shares in the group plunging 61.5p to 220p yesterday, their lowest level for 15 years. They have been in decline since peaking at 631p in early 1994, after it became clear Redland had overpaid for Steetley, a rival building products group picked up for pounds 1bn in 1992, forcing it to cut the dividend. The company denied any plans to reduce it again, but many believe it is in danger again.
Analysts and investors agreed it was unlikely that Mr Napier, who earned pounds 332,000 in 1996, could now retain his job. One unnamed analyst attending the meeting with the company suggested that the consensus among his colleagues was that Mr Napier would be out of a job by the end of the year.
Another, commenting suggested any successor might not fare any better. "It needs a corporate hatchet man and even if you corporate hatchet this business, I am not sure if you can restore shareholder value."
But Mr Napier defended himself vigorously, unveiling a new round of cost cutting in the majority-owned Redland Braas Building subsidiary which includes the German operations. Redland saw volumes slide 16 per cent in July and August.
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