Resignation wipes one-third off Toad market value

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The Independent Online
Toad, the loss-making car security group backed by Chris Evans, the biotech entrepreneur, saw nearly one-third of its stock market value wiped out yesterday following the surprise resignation of the chief executive, Charles Parker, after just over a month in the job.

The company blamed "irreconcilable differences" between Mr Parker, who joined from the Charter industrial giant at the beginning of January, and the rest of the board. But the group also warned that sales in December and January had been "substantially below budget" due to disappointing trading through dealers and its own network of installers.

Mr Parker, who is on a pounds 170,000 contract at 12 months notice, is to be replaced as chief executive by Kevin Gray, who became a non-executive director following the takeover of his Secur-Fix company last April.

The shares, which recently moved from the Alternative Investment Market to a full listing, crashed 19.5p to 41.5p yesterday, wiping pounds 3.3m off the group's former market capitalisation of pounds 10.3m. The group has raised pounds 10.6m in two placings at 90p and 80p a share over the past 14 months, the latest in January. but the shares have been sliding steadily since the start of the year, when they were trading at around 85p.

Mr Evans, who chairs the group and owns around 20 per cent of the shares, said there was "nothing substantive" to account for the departure of Mr Parker. There was "nothing massive. No major falling out. No bombshell," he said. He also dismissed any suggestion of Mr Parker uncovering a "black hole" at the group. "If there was, we would have been obliged to reveal it. It was just a whole number of little things", Mr Evans said.

The second-half loss for the group would be lower than for the comparable period of the previous year, but sales in January and February had been disappointing, he said. They were still on course for around pounds 5m sales for the year and a loss in the region of pounds 3.5m, roughly in line with previous market forecasts.

He suggested compensation for loss of office would not be large. Mr Parker had resigned and was therefore legally entitled to nothing. "There may be some kind of payment, but it will not be substantial."

Mr Parker had spent several months last year doing what Mr Evans described as "due diligence" before throwing in his lot with Toad. He had been credited with pushing through Charter's highly successful pounds 445m takeover of the Swedish welding rods group Esab in 1994. But it had been clear almost from when he took the reins in January that he was not comfortable in the job, Mr Evans said. "The leap from a big company to a small one, that's a hell of a leap. Time and time again, people fail in making that leap."

There were said to have been "fundamental disagreements" between Mr Parker and the non-executive directors over the way the group should be taken forward. Mr Evans, whose fortune based on biotech groups such as Chiroscience was put at pounds 60m last year, is one of three non-executives on the company's board, along with John Morris, a fellow biotech investor, and Derek Whittaker, a former chief executive of the old British Leyland car group.