Chief's surprise exit takes a bite out of Premier

Premier Foods shocked the City yesterday by revealing that the chief executive it had brought in to revive the fortunes of the debt-laden owner of Hovis bread was leaving after just 18 months.

Michael Clarke indicated to the food maker a few weeks ago that he was considering other business opportunities and resigned over the weekend, which sent shares in the group tumbling 12 per cent yesterday. Premier Foods, which also owns Mr Kipling cakes and Bisto gravy, has replaced him with Gavin Darby, although there will be a short handover period after he starts on 4 February.

Graham Jones, an analyst at Panmure Gordon, said: "We regard his resignation as a surprise and will no doubt raise concerns over the long-term outlook for the company."

Mr Garby was most recently the chief executive of Cable & Wireless Worldwide, who oversaw the sale of the telecoms group to the mobile phone giant Vodafone last year.

Mr Clarke led the refinancing of Premier Foods' £1.4bn debt mountain in March but this had been in return for disposing of four businesses from June, including its Branston pickles, Hartley's jam brands and Sarson's vinegar brands. While he raised more than £430m from disposals, the group's debt remains stubbornly high at about £900m, partly due to higher costs from the refinancing. Shares in Premier Foods fell by 14.5p to 106p yesterday.