Salvesen hit by chief executive delay

The logistics and warehousing group Christian Salvesen revealed yesterday that its new chief executive, Stewart Oades, would not be able to take up the post until May 2005.

The logistics and warehousing group Christian Salvesen revealed yesterday that its new chief executive, Stewart Oades, would not be able to take up the post until May 2005.

This means there will have been a gap of 12 months during which the troubled group has been without a chief executive. The former chief, Edward Roderick, left the company shortly after a profits warning in April.

Mr Oades's former employers, Salvesen's competitor Exel, have requested that he take a six-month period of gardening leave before starting his new role. David Fish, who is acting as executive chairman, will return to the position of non-executive chairman as soon as Mr Oades, himself a Salvesen employee until 1996, becomes available.

The Edinburgh-based company also revealed that the cost of Mr Roderick's exit was £1.1m, some £200,000 higher than had previously been expected, as it reported interim profits for the six months to 30 September.

Salvesen, which also ended merger talks with rival TDG last month, reported that half-year sales had declined by 2.4 per cent, that margins fell by of 0.8 per cent and that pre-tax profit fell by 16.8 per cent.

The company blamed the fall on accounting changes and downward price pressure at its UK food processing and distribution arm. It does expect full-year profits to be in line with last year at £17m.

Despite these figures, Mr Fish remained upbeat, stressing that the company was on track to turn things around. "The way forward for us and our shareholders is to grow this company organically. We have some divisions of the business running very well but there are issues at two divisions. We still have lots of progress to make," he said.

However some analysts remain gloomy over Salvesen's shorter-term prospects. John Lawson, of Investec Securities, has had a "sell" rating on the company's shares for some time. "I will not be changing my recommendation," he said. "Turning around a business like this takes years not months, although at least I will not be downgrading my forecasts this time. Global markets are only going to get tougher, but Christian Salvesen shares are still not cheap in comparison to its UK logistics peer group."