Logistics group John Menzies surprised the City yesterday by announcing the departure of its chief executive, Jeremy Stafford, after just over a year in the role.
The Edinburgh-headquartered firm, which operates in baggage-handling and print distribution, said Stafford resigned for “personal reasons”.
The company declined to elaborate on the circumstances surrounding his departure, with chairman Iain Napier telling The Scotsman: “It’s a private matter. We’ve nothing more to say.”
In the stock market announcement he said: “The board wish Jeremy Stafford well for the future.”
Stafford had joined the company in October 2014 from outsourcing group Serco where he headed its UK and Europe operations.
The leadership change comes after the company warned in November that its full-year earnings for 2015 would fall £2 million short of its previous expectations, due to its aviation division needing £6m of further investment to tackle issues including customer operational needs in its London Gatwick activity.
It said at the time that contract negotiations with this customer were ongoing, and confirmed yesterday that these concluded “satisfactorily”.
When asked about plans to replace Stafford, Napier highlighted the appointment of Forsyth Black, former managing director of Menzies Distribution, as managing director of Menzies Aviation, and Mark Cassie, currently distribution operations director, as interim managing director of Menzies Distribution.
Napier said: “We’re very fortunate in having two well-experienced executives, who are part of succession planning anyway, who have stepped into the positions. It’s business as usual.”
The chairman also pointed out that these appointments move John Menzies closer to its former structure, as before Stafford joined the firm it had been run by two managing directors rather than one overall leader.
However, while there have been calls to separate the two divisions entirely, Napier denied that this is on the cards, saying the strategy remains “as planned”. They are “two very successful divisions being run by two very competent people”, he stressed.
Last year, Menzies came under pressure from Lakestreet Capital Partners to consider breaking itself up after the Swiss activist investor said it was “dramatically undervalued”.
Analyst Martin Brown of Shore Capital said that while the departure was unexpected, the update is “reassuring” especially given the conclusion of the Gatwick negotiations. He added that he is set to maintain forecasts for Menzies’ full-year 2015 and 2016 earnings.
Also maintaining its forecast for these periods was brokerage Numis, which said that while Stafford’s departure is “a surprise and a disappointment”, it sees the growth-strategy foundations in both the group’s aviation and distribution businesses as being in place.