Boardroom shake-up at JD Wetherspoon shocks investors
Friday 15 October 2010
A surprise management shake-up at JD Wetherspoon triggered speculation about a boardroom split over the pub group's strategy last night.
The exit of the chief operating officer Paul Harbottle and finance director Keith Down was disclosed in a short, two-paragraph statement to the stock market. The brevity triggered speculation across the City as analysts attempted to work out the reasons behind the changes and triggered a 4 per cent fall in the group's shares.
Paul Hickman at KBC Peel Hunt said he believed the departures reflected disagreements over "how far to use cost savings to protect margins" in the short term.
"The implication is that Wetherspoon will accept costs on items like repair and labour for the underlying good of the business, even if this brings short-term margin reductions in the face of, say, an inability to pass on VAT increases in January," he said.
Hugh-Guy Lorriman, an analyst at Seymour Pierce, said the news was "frankly disappointing". "Keith Down, as FD, has a high profile in front of investors and the analyst community. We felt that he was impressive in his role... He has been, in our view, a strong steady pair of hands," he said, adding that "In general, such wholesale and unexpected management change suggests the underlying story is more volatile/higher risk than the market had previously understood."
Wetherspoon's chairman Tim Martin said the two executives had left their posts with immediate effect. He did not give any reasons for the departures. The group's chief executive John Hutson will take on Mr Harbottle's responsibilities on an ongoing basis, while the deputy finance director Kirk Davis has been appointed interim finance director. "Change does happen and these are two changes, but there is still a considerable amount of continuity," Mr Martin said. Following the announcement, Wetherspoon shares fell by 17.3p to 437.4p last night.
OFT: Beer ties competitive
The Office of Fair Trading has ruled that the pub sector was competitive. The consumer watchdog will not take action after consulting on the findings of last year's investigation into the practice of leased pub operators tying tenants into buying their beer.
The consultation was prompted by a complaint by the Campaign for Real Ale (Camra). Its chief executive, Mike Benner, said: "Camra's initial reaction to the decision is it is based on blinkered and selective consideration... The OFT has squandered an opportunity to support a process of industry self regulation to... benefit consumers," he said. Despite the news, tenanted pub groups Punch Taverns and Enterprise Inns closed lower last night.
- 1 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 2 Pub landlord captures moment customer falls over on CCTV – just like Del Boy did on Only Fools and Horses
- 3 Top Gear: Jodie Kidd, Philip Glenister and Guy Martin 'in advanced talks' to join show
- 4 Frankie Boyle on Scottish independence: 'In the Interests of Unity, F**k Off'
- 5 How to gain confidence and maximise your sexual potential
Boston Marathon runner's search for mystery man she kissed ends with letter from his wife
Frankie Boyle on Scottish independence: 'In the Interests of Unity, F**k Off'
Italian police 'reveal' what Jesus looked like as a young boy
Mysterious 'X-Files' sounds heard miles above the Earth
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
In defence of liberal democracy
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
Andy McSmith's Sketch: Feisty audience is the real star of an enlightening show
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...