Staveley chief quits on profit warning

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The Independent Online
STAVELEY, the troubled engineering and minerals group, yesterday announced the departure of its chief executive along with a profit warning and the long-awaited sale of its two measurement businesses.

Shares in the group fell 9p to 122p as it revealed that the disposals would cause it to report a pre-tax loss of pounds 74m for the year to 28 March.

The company said Roy Hitchens had ceased to be chief executive "with immediate effect" and the process of finding a replacement had already started. In the meantime Harry Tulley, the chairman, will take over the running of the minerals division while Bob Brown, the finance director, will run the services division.

"Roy began to feel an inability to put the problems right," Mr Tulley said. "He was losing shareholders' confidence."

Mr Hitchens, who was on a two-year rolling contract, was paid close to pounds 600,000 last year. However, Mr Tulley said that this was swelled by pension contributions and that discussions about his pay-off, which had only just started, would only take his basic salary of about pounds 250,000 a year into account.

Staveley has long been criticised by institutional investors for its performance. Guinness Peat Group, the aggressive investment group run by Sir Ron Brierley, has 11.3 per cent of the shares.

Last night Blake Nixon, a director of GPG, said the announcement was "rather disappointing" adding that GPG would be considering its position. "The financial control has clearly been weak," he said.

Staveley has been trying to sell the weighing businesses since last year, when it decided to focus on its services activities. Its Weigh-Tronix subsidiary is to be sold to a management team backed by Berkshire Partners for pounds 44m in cash. But Staveley could not find a buyer for Chronos Richardson. As a result, the company had decided to turn over the division to its management and to ring-fence the possible losses, which could amount to about pounds 7m. But Mr Tulley said that option was much cheaper than closing down the business.

Analysts said the shortfall at Staveley's services division was more worrying. The company said a new management team at Integral, its facilities services business, had reduced the value of work in progress and written off debts with a value of pounds 3.2m. As a result, Staveley Services is expected to make a profit of just pounds 100,000 in the year to March.