Britain's Imperial Chemical Industries (ICI) warned of a drop in first-quarter profit today because of poor trading at a food flavourings unit and rising raw material costs.
The maker of Dulux paints said Mr Paul Drechsler, head of problem food flavourings business Quest, had quit. The company also announced it would cut jobs and cut spending.
ICI shares sank 40.1 per cent to 92p against a FTSE 100 index that was off just 0.7 per cent.
"Inevitably there will be some job cuts," Chief Executive Mr Brendan O'Neill said, adding there were no precise details yet on the numbers of any job losses.
ICI said pre-tax profit in the first quarter would fall to around £50 million from £66 million last year. It blamed a major increase in raw material costs at its National Starch business, which makes adhesives and food thickeners.
ICI said overall group sales for the first quarter were expected to be satisfactory, in spite of continuing challenging trading conditions.
Mr O'Neill said it was hard to assess the impact on ICI from the war in Iraq but that higher oil prices could hurt the company by raising its production costs.