The board of logistics and haulage company Stobart Group has been overhauled for the second time in less than three months, sparking new concerns about its corporate governance.
The Cumbria-based company said that Avril Palmer-Baunack will stand down as executive chairman with immediate effect because it is “no longer appropriate” for Stobart to have the role due to an improvement in trading since the turn of the year.
The statement comes less than three months after Ms Palmer-Baunack became executive chairman of Stobart, which is famous for its green Eddie Stobart lorries, as part of a boardroom coup that removed Rodney Baker-Bates as chairman.
Ms Palmer-Baunack joined Stobart last September after the company bought Autologic, an Aim-listed company that transports new vehicles where she was chief executive.
As executive chairman, she was understood to be setting about a remit to dispose of underperforming businesses.
However, this strategy is thought to have clashed with the executive management team led by chief executive Andrew Tinkler and chief operating officer William Stobart, who are also significant shareholders. Mr Tinkler and Mr Stobart believe the company does not have any underperforming businesses and were not looking to sell-off divisions.
The latest changes at Stobart, which owns London Southend Airport, prompted new questions about the boardroom stability of the company and its corporate governance.
Gerald Khoo, analyst at Espirito Santo, said that Stobart’s reason for the departure of Ms Palmer-Baunack was an “odd explanation”.
He added: “By our calculations, this brings the total number of the non-executive director departures in the past year to four, with a total of six departures in the past two years.”
However, despite the upheaval shares in the company ticked up 1.98, or 2.5pc, to 82.48p.
Investors in Stobart reacted positively to the company reporting that results for the year to February 28 will be “moderately ahead of market expectations”. Stobart has also secured a new three-year distribution contract with Tesco (Other OTC: TSCDY - news) worth more than £500m.
The supermarket group is Stobart’s biggest customer and the new contract is thought to be a step-up from the existing deal, which was worth £159m a year. Stobart said: “Having invested heavily to support Tesco’s drive for an efficient network, the group currently provides secondary distribution services to nine Tesco distribution centres across the UK and the Republic of Ireland (OTC BB: IRLD - news) .”
However, Mr Khoo added: “In our view, this moderate outperformance should be viewed in the context of a steady stream of cuts, the most recent in January. When we initiated coverage in July 2012, we forecast profit before tax of £38.9m. Our current forecast, without taking the update into account, is £27.0m.
“Current trading was not a key part of our bear base, so the apparent stabilisation of the group’s short-term performance changes relatively little in our view.
“If anything, the announcement raises yet more question marks over corporate governance.”
Ms Palmer-Baunack will remain on the board of Stobart as a non-executive chairman until a new independent chairman is found. Mr Baker-Bates, who was due to retire from the company last month, will now stay as a non-executive director to assist with the search for a new chairman.
However, Alan Kelsey, Stobart’s senior independent director, will leave at the same time as Ms Palmer-Baunack.