The new chief executive of Hays, the personnel, haulage and private mail group, which is selling off all but its staff recruitment business, shocked the City yesterday by announcing his departure after just 10 months in the job.
Colin Matthews, who joined Hays last November after stints with British Airways and the gas network Transco, said he planned to leave next year once the sale of the group's haulage division had been completed.
News of his surprise departure came as Hays reported a bottom line loss of £447m for last year after taking more than £600m of write-offs and goodwill charges in connection with the slimming down of the group. Underlying profits for the year to the end of June fell by 23 per cent to £179m.
Mr Matthews insisted that the decision to leave was his, adding that he had no interest in running what would become a specialist personnel recruitment business. He was hired on a one-year contract and could be in line for a £450,000 pay-off.
However, Mr Matthews also conceded that it had not been his plan to restructure himself out of a job when he first took on the chief executive's role and launched a strategic review of the group. "It has been an interesting exercise and this is the right thing to do for the company. I have no regrets," he added.
Mr Matthews' replacement as chief executive will be Denis Waxman, who founded the group's original recruitment division and today runs Hays Personnel.
Since announcing the results of the strategic review in March, Hayes has so far disposed of only its commercial division. The sale of the business, which specialises in document storage and business process outsourcing, raised £225m. Hays said that efforts were "ongoing" to sell its haulage and logistics division, which counts Waitrose, Nestlé and Philips among its customers. But the company refused to give more details or say whether it was in talks with a buyer.
The disposal of the UK mail division, which has been granted a long-term contract to compete with Royal Mail, will not be complete by the time Mr Matthews leaves.
Analysts originally put a break-up value of £1.5bn on Hays but since March its share price has risen by almost a half, valuing the company at just under £2bn.
The proceeds from the sales so far completed have been used to reduce the group's debts to £120m. But Mr Matthews said that further proceeds would be returned to shareholders by way of share buybacks. The share repurchasing programme is expected to give Hays the scope to return £200m-£300m to shareholders.
Once the group has become a pure recruitment business, the dividend will be "rebased", which is likely to result in a cut of about a half in the payout compared with the 5.4p paid last year.