Northern Foods, makers of Fox's Crunch Creams and Goodfellas frozen pizzas, yesterday said its chief executive was paying the price for a spate of profits warnings and would leave the company immediately.
Jo Stewart, who has worked at the food supplier - whose customers include Marks & Spencer and Tesco - for 15 years, left yesterday with a pay-off worth one year's salary of £425,000. He will not receive any bonus or extra pension contributions as part of the package.
Mr Stewart managed to boost sales at the company, but he proved unable to turn the gain into an upturn in Northern Food's bottom line. The company warned again yesterday that its pre-tax profits for the first half would fall "significantly" below expectations. Northern Food's shares slumped 15 per cent to 136p.
Peter Blackburn, chairman of Northern Foods, said: "After three profits warnings in 18 months the board felt it was time for a change. The investor community and some shareholders had not been happy for a little while. Jo fully understood".
Mr Blackburn formerly headed Nestlé UK business and joined Northern Foods as chairman in January 2002, replacing Lord Haskins. He will take on the responsibilities of an executive chairman until a replacement is found.
Recruitment consultants Whitehead Mann have been hired to find a new chief executive in a process which is expected to take at least until the end of the year.
Mr Stewart is only being given his contractual entitlement as his pay-off. He agreed earlier this year to reduce the length of his contract from two years to one to make it more in line with current views on good corporate governance.
Northern Foods has been involved in the development of a number of trends in its market, such as introducing prepared meals to supermarket chiller cabinets.Reuse content