Premier Foods boss Michael Clarke quits

Premier Foods' brands include Hovis and Oxo
Premier Foods' brands include Hovis and Oxo
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Hovis and Oxo owner Premier Foods saw its shares tumble 12 per cent yesterday as chief executive Michael Clarke resigned after 18 months at the helm of the debt-laden group.

Clarke joined in August 2011 and had been streamlining the firm to focus on eight “power brands”, including Bisto gravy and Mr Kipling cakes. He will be replaced as chief executive on 4 February by Gavin Darby, the former boss of telecoms group Cable & Wireless Worldwide.

Darby, who spent 15 years at Coca-Cola before joining mobile phone giant Vodafone in 2001, was most recently chief executive of Cable & Wireless Worldwide, which itself was acquired by Vodafone last year.

He said: “Premier Foods has great potential and I fully intend to invest a significant personal sum in the shares of the company after the full-year results are published in February, which the company will match.”

Investec analyst Martin Deboo said the departure of Clarke was a setback for Premier, but the broker was “prepared to be open-minded” about Darby’s credentials.

“However, we are less open-minded about the consequences of this change for Premier. With its financial restructuring complete, we think that consistency and longevity of leadership was going to be critical to its prosperity. We now anticipate a further period of uncertainty.”

Premier has been struggling under a £1.3 billion debt mountain following a spending spree which included Mr Kipling owner RHM, although it agreed a £1.4bn refinancing deal last year. The firm sold its Sarson’s vinegar and Haywards pickles brands to Japanese firm Mizkan and is shedding 900 jobs at its bread division – which accounts for 40 per cent of revenues – following the loss of a £75 million supermarket contract.

Shares in Premier ended the day down 14.5p at 106p.