UK: Premier Foods investors "seek immediate replacement" for Schofield

A group of Premier Foods plc shareholders have reportedly called for chairman Ronnie Bell hasten the search for a replacement for CEO Robert Schofield following last week's profit warning from the UK firm.

According to a report in yesterday's (3 July) Sunday Telegraph, the investors, which are believed to include second-largest stakeholder Paulson & Co, are calling for Bell to replace Schofield almost immediately.

Schofield has already said he will step down before April next year. However, according to The Sunday Telegraph, the investors are calling for Schofield to be replaced by chief operating officer Tim Kelly, at least on an interim basis.

On Thursday, Premier Foods said that it expects first-half trading profits to fall to between GB65m (US$104.4m) to GBP70m against GBP94m in the equivalent period in 2010. It attributed the drop to commodity cost rises, the weak economic environment and to having a number of products delisted by one of its key customers, understood to be Tesco.

The delisting cost Premier GBP10m but the company said the issue was "fully resolved" and it said the affected lines had been relisted.

Premier also reported an "unprecendented decline" in its markets, with both the grocery and bread channels falling by 5% due to the depressed consumer environment, exacerbated by unseasonably warm weather.

It also said its Brookes Avana own-label unit will report a GBP10m decline in profit over the first half due to restructuring costs following Marks and Spencer's decision to end a pie contract with the business.

Investec analyst Martin Deboo said that Thursday's announcement raised the question of whether Schofield's continued presence "is becoming a liability amongst investors, suppliers and customers". He agreed that Schofield should leave Premier as soon as possible.

"We think Premier should consider an interim leadership structure, with chairman Ronnie Bell becoming executive chairman for a period and chief operating officer Tim Kelly acting as interim CEO," Deboo said.

A Premier spokesperson told just-food that the search for a replacement is "progressing well". He emphasised that Schofield would be leaving "no later" than the end of April next year and said the company will announce the appointment "as and when it happens".

Sky News reported today that Birds Eye Iglo chief executive Martin Glenn had turned down the opportunity to replace Schofield.