There’s no doubt that Darby is a good fit for the role. His most recent position at telecoms giant C&WW may not have taught him much about food manufacturing, but he probably picked up a useful thing or two during his 15 years at Coca-Cola.
It looks like Darby’s in it for the long haul too: he has promised to ‘invest a significant personal sum’ in Premier's shares, which will effectively tie his personal wealth to the fortunes of the business he runs. He’d get a bargain on Premier’s shares at the moment – the price fell 10% to 105p this morning at the news the company was swapping CEO yet again. But he’s not buying in till February, after Premier Foods’ full-year results are published. Curious: perhaps he’s planning to get the shares for a song when the market reacts negatively to Premier’s worse-than expected year?
And why has Clarke decided to leave now? David Beever, Premier Foods chairman issued a very diplomatic statement this morning, saying: ‘Michael Clarke and the team have done a first class job in stabilising the business, strengthening its balance sheet, divesting non-core businesses and generating momentum. This is a significant achievement in a challenging market and I would like to thank Mike on behalf of the Board for his contribution.’
Clarke leaves Premier Foods with 500,000 shares – currently worth around £500,000 – and will doubtless get a cash payment on top of that, an undisclosed portion of his £750,000 per year salary.
Over the last 18 months, he has been focusing on pushing the group’s eight ‘power brands’, namely Hovis, Oxo, Batchelors, Bisto, Ambrosia and Mr Kipling. Darby appears to want to push on with this strategy. ‘Although markets remain difficult, I look forward to working with the team to develop and grow the company's power brands in the coming years. Premier Foods has great potential,’ he says.
It’s probably better to focus on the firm’s ‘potential’ than its track record. This has not been a good year for the British food manufacturer. In November, the company was forced to axe 900 jobs in order to day down debts accrued through a decade of acquisitions. Most notably, the £1.2bn purchase of RHM, formerly Rank Hovis McDougall in 2007, which left a significant hole in the balance sheet.
Premier Foods has been forced to sell off prime assets too. Last year, the iconic Branston pickle and Sarson's vinegar brands were flogged to Japanese food company Mizkan for a total of £133.5m. Robertson’s and Hartley's jams and Sun-Pat peanut butter went to US company Hain Celestial for £200m. Its specialist flour business, Elephant Atta, was sold to rival Associated British Foods, for £34m. All in all, Premier Foods has earned around £370m from its divestments but it’s still £1bn in the red.
So, plenty for the new boy to get his teeth into. Even without Branston, Premier Foods is still in a pickle...