Nurdin warning as director departs

MAGNUS GRIMOND

Nurdin & Peacock, the cash and carry group which lost its chief executive in an acrimonious separation in 1994, has now parted company with Nigel Hall, finance director for the past five years. It also warned that 1995 profits will be below expectations, sending the shares down 10p to 148p yesterday.

Mr Hall could receive up to pounds 180,000 in compensation for loss of office. Mr Poole, who at one stage threatened legal action, is thought to have settled for under two years his annual salary of around pounds 160,000.

Mr Hall's sudden departure from the board is the third in the wake of Nurdin's ill-starred venture into US discount warehouse retailing under the Cargo Club banner and the second since the arrival of the new chief executive, David Sims. Mr Poole left in October 1994 and Anthony Hopkins stepped down last December.

Mr Sims said that, having completed a review of his management team, he did not expect any further departures. Mr Hall, who has been with the group 11 years and joined the board in 1991, had lost the confidence of the board, he said. "There is no nasty event that has been turned over. I have been here six to seven months now and been assessing my team and thought this was the right way to go. Obviously, as we issued a trading statement, there has been a bit of a surprise and the finance director was obviously part of that surprise."

Mr Hall was on a three year rolling contract at a salary of around pounds 120,000 a year, but Mr Sims dismissed any suggestion that he would pick up the theoretical maximum compensation of pounds 360,000. "We wouldn't even get remotely near that. We are not big payers in that sense. That would be nowhere near correct in the current climate. We would expect he would get employment fairly quickly, which would mitigate the sum."

Compensation for Mr Poole would be revealed in the accounts to be published on 11 April, according to Mr Sims, but it would be "well under" two years' salary, he said.

Nurdin said profits for the year ending in December would now be between pounds 19m and pounds 20m, against analysts' forecasts of between pounds 24m and pounds 25m. Mr Sims said he was disappointed at the recovery from last year's profits of pounds 16.5m, which were half the level of 1993 due to exceptional items relating to losses on Cargo Club and the costs of converting existing stores to Nurdin's new Trade and Business Warehouse format.

Mr Sims said trading had been particularly difficult in the run up to Christmas. Price competition had become intense in this period, while the drift of its small retail customers into lower margin goods like beer, wine, spirits and tobacco and away from groceries had continued. He estimated typical off-licence goods, tobacco and snacks now formed around 55 per cent of sales, as against 53 per cent in 1994.

The additional Christmas competition and the leaner sales mix cost around pounds 2m apiece to the bottom line, Mr Sims estimated.

The cut in the duty on whisky left the group with large stocks ahead of the festive season, which lopped around pounds 500,000 from profits. Another pounds 500,000 related to the closure of a warehouse near Leeds which the group acquired with the M6 Cash & Carry business.

Like-for-like sales in the second half of 1995 were up 3.9 per cent, compared with 5.1 percent in the first half year. January was showing like-for-like growth of 4 per cent, the company said.

Mr Sims said: "Going forward, we still have our strategy and that will deliver growth in 1997 and some in 1996." Nurdin is expanding its delivery service to small shops, caterers and pubs. It is also spending pounds 15m over three years on new systems and plans to open a pounds 10m centralised distribution depot near Oxford to complement an existing warehouse at Didcot.