BBA, the aviation services to industrial materials group, ousted its chief executive yesterday as it reported lower-than-expected profits and announced plans to demerge rather than sell its Fiberweb division.
The triple whammy of bad news unsettled investors and BBA shares fell 10 per cent as analysts expressed concern both about the stewardship and valuation of the group.
BBA said that Roy McGlone, who had been with the group for 10 years, the last five as chief executive, had stepped down "by mutual agreement". He is expected to receive a pay-off worth about £700,000.
Mr McGlone is being replaced on an interim basis by one of BBA's non-executive directors, Michael Harper, who was chief executive of the fire protection group Kidde at the time of its demerger from Williams Holdings and subsequent sale to United Technologies Corporation of the US.
Roberto Quarta, BBA's chairman, has agreed to delay his planned retirement this May until a permanent successor to Mr McGlone has been found and the demerger of Fiberweb is complete, a process which could take until the autumn.
BBA said it had received a number of expressions of interest over Fiberweb, which makes materials for nappies, train brakes and industrial filtration equipment, but had decided instead to give priority to a demerger.
Analysts interpreted this as meaning the offers failed to reach the asking price of £700m that BBA had hoped to achieve, and BBA shares fell 30p to 267.75p, valuing the group at £1.3bn.
Underlying pre-tax profits for 2005 fell by 6 per cent to £108m after BBA was hit by a rise in raw material and fuel prices late in the year. Its aviation division, which provides support services such as de-icing, refuelling and maintenance and repair, was also affected by a series of one-off charges, including a £2m bad debt charge after Northwest Airlines' move into Chapter 11 bankruptcy protection.Reuse content