Keith Hamill, a veteran of British boardrooms, has been appointed as chairman of Premier Foods, the highly indebted UK producer of Bisto gravy and Mr Kipling cakes that has been in the crosshairs of activist investors.
He will lead a board that has come in for criticism for rejecting a takeover approach from the US spice maker McCormick last year that was pitched at 65p a share, 66 per cent above the company’s closing share price on Wednesday.
Mr Hamill is currently on the board of easyJet and Samsonite. He has previously served as chairman of Travelodge, Tullett Prebon, Moss Bros and Collins Stewart, and is a former PwC partner and WHSmith finance director. He joins the board on October 1 and becomes chairman on November 9, Premier Foods announced on Wednesday.
“Keith’s background in consumer-facing businesses, in addition to his breadth of experience as a chairman and non-executive director, will be invaluable,” said Ian Krieger, senior independent director of Premier.
Mr Hamill replaces David Beever, who announced his departure in September, and will have served on Premier’s board for nine years and as chairman for five.
The appointment follows a turbulent period in which shareholders criticised the rejection of the McCormick bid and Premier issued a profit warning.
Last year Standard Life and Paulson & Co, then two of Premier’s biggest shareholders, questioned the objectivity of the board after it decided to reject the £537m McCormick offer but then agreed a tie-up with Nissin Foods, the maker of Japanese instant noodles. Nissin is currently Premier’s largest shareholder with a 19.8 per cent stake.
Premier chief executive Gavin Darby said at the time the company saw “a strong future for an independent Premier Foods and believes that the foundations have been laid for significant growth and shareholder value creation”.
Then in January, Paulson accused the company of being “grossly mismanaged” following a profit warning blamed on commodity prices and the weak pound, which knocked 11 per cent off the company’s shares.
More recently, motions at Premier’s AGM last month were passed near-unanimously by shareholders on a turnout of 66 per cent.
Premier is labouring under a net debt burden of £523m plus an actuarial pension deficit of £421m, which compares with underlying adjusted earnings before interest, tax, depreciation and amortisation of £133m in the year to April 1. On Wednesday afternoon Premier’s shares traded around 39p, giving it a market value of £327m.
In May Premier reported a fall in full-year underlying revenues and profits after it was hit by higher prices for sugar and other ingredients, prompting it to seek to cut costs.
In the quarter to July 1 it reported a fall in total sales of 3.1 per cent, which it blamed on warm weather that damped sales of Bisto gravy and price rises that deterred shoppers from Ambrosia custard.