Finance director to quit Premier Foods

The revolving door at Premier Foods continued to spin yesterday with the exit of the finance director at the heavily indebted maker of Hovis bread and Mr Kipling cakes.

Mark Moran, who joined in late 2011, will leave on Monday because he "felt unable to make" a commitment to remain for the next three years, the group said in a statement. Mr Moran said his decision was "entirely personal". He is to be replaced by Alastair Murray, former finance director at Dairy Crest, the UK-based milk supplier.

The changeover suggests that the group’s plans to tackle its debt mountain may be coming close to fruition, though Premier Foods has remained tight-lipped on the matter.

Mr Moran was asked to commit to staying until 2016 when its bank financing package expires and some analysts said it was likely he was asked to see through a potential refinancing until that date.

Most analysts believe Premier needs to raise funds ahead of the deadline to reduce its ratio of net debt to earnings before interest, tax, depreciation and amortisation to a more prudent level - of about 3 times from 5.9 times at the end of last year, when net debt stood at £950m. Martin Deboo, analyst at Investec, said in a recent note that the group needed about £300m of new equity and "to pursue a tripartite refinancing that would embrace the issue of new equity, refinancing of a proportion of its debt in the bond market and concluding a new framework agreement with its pension trustees".

Shares fell
The shares fell on the news that yet another top executive was to leave Premier just when stability appeared to have returned to the company after a flurry of boardroom changes.

The last significant change was the appointment of Gavin Darby as chief executive in February. Mr Murray will become Premier's third finance director in two years. The group, which owns some of the UK's best-known food brands, including Bisto gravy, Oxo stock cubes and Ambrosia rice, has also had two changes of chairman and chief executive in the last three years.

Analysts at Shore Capital said Mr Moran was “well-regarded and capable”. But they also welcomed the choice of Mr Murray as appropriate.

– (Copyright The Financial Times Limited 2013)