Northern Foods chief in line for 470,000 stg compensation pay-off

Northern Foods chief in line for 470,000 stg compensation pay-off

	Published : Thu, 01 Feb 2007 10:38 By : Agencies Print this Story

LONDON (AFX) - Northern Foods PLC, the Goodfellas' pizza and Fox's biscuits group, today announced the surprise departure of its chief executive Pat O'Driscoll -- a move which is likely to result in a pay-off of around 470,000 stg.

The group, which has been through several years of tough trading conditions and which recently sold its chilled pastry, flour milling and speciality cakes business for 160 mln stg, said her departure was by mutual consent and was entirely amicable.

'There has been no boardroom row or bust-up,' a spokeswoman for the foods group told AFX News this morning.

O'Driscoll joined Northern Foods in March 2004 and has led the company through a period of transformation and restructuring, although trading has been hampered by the highly competitive conditions in the grocery and supermarket industry.

First half pre-tax profits fell to 16 mln stg from 25.7 mln and a recent third quarter trading update pointed to a slowdown in underlying sales growth. For the full year to March 2007, analysts currently look for pretax profits of about 40 mln stg.

'Both sides agreed it was time for a change,' the company spokeswoman continued. O'Driscoll will be succeeded by Stefan Barden, currently the executive director responsible for the chilled and bakery divisions and a relative unknown in the City. He will assume the role on Feb 5.

O'Driscoll, who steps down from the board with immediate effect, will stay on for the next three months to ensure a smooth handover.

'Northern Foods is now a more resilient and more competitive business and I believe it is the right time for me to move on,' she said in a statement today.

O'Driscoll was paid a basic salary of 470,000 stg in 2005-06, according to the annual accounts, and has a one-year rolling contract. It is understood that this will be honoured by the company.

Barden, who was appointed executive director of the chilled division in January last year, was a former managing director of Heinz (UK and Ireland) and has held senior roles at McKinsey and Iceland Foods.

'I'm looking forward to leading Northern Foods into its next phase of growth and maximising value for shareholders,' he said.

In the stock market, Northern Foods shares advanced 2-1/2 pence to 125-3/4 at 9.15 am.

Stockbroker Panmure Gordon upped its price target to 125 pence a share from 108 this morning.

'Stefan has only been with the company since the start of 2006, but he has clearly impressed the board enough to earn a quick promotion,' said Panmure analyst Graham Jones.

'That said, he does not have a magic wand and there are still significant challenges in the short-term. In particular, the group faces significant challenges to pass on input price inflation, especially flour in the biscuit and pizza categories,' he added.

'However, this move makes us more confident that the company has a better chance of successfully addressing the strategic questions still facing the group,' he said.

newsdesk@afxnews.com

ml/ro

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited