HIT Entertainment, the group behind Bob the Builder and Thomas the Tank Engine, yesterday fired its chief executive and issued a profits warning.
Its shares dropped 11 per cent despite the fact that it announced a long-awaited partnership deal to create a specialist channel in the US. Hit said trading conditions were tough and it expected "little growth" in 2005.
The company said Rob Lawes was no longer the right man to lead Hit. Peter Orton, the chairman, who founded Hit in 1989, took over as interim chief executive until a permanent replacement can be found.
Mr Orton, 61, had handed over to Mr Lawes two-and-a-half years ago when he had throat cancer and was "in a ropey old state". Mr Orton said he was now fit again.
He described Mr Lawes as a "very talented executive" who had strengths in finance. However, following the US deal, the company needed somebody with experience in programming and running channels. The US announcement "transforms" Hit from a creator of content to an owner of distribution also.
Mr Orton said: "Companies evolve .... I have worked with Rob for 14 years and we were very close friends." The non-executive directors, including Mr Orton, decided a change was needed. It was then left to Mr Orton to inform Mr Lawes, who left yesterday. He will get a pay-off of at least six months' salary. Last year he earned a total of £408,884, though the salary component was £275,333.
The US venture will see Hit take a 30 per cent in a 24-hour digital channel for pre-school children, for a $32m (£18m) investment. It will partner the cable giant Comcast, PBS, the US public broadcasting service, and Sesame Workshop, the creator of Sesame Street.
The channel should be available in 20 million homes in the US by the end of this year.Reuse content