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01/07/2004
Sainsbury's chairman steps down
Sainsbury's chairman, Sir Peter Davis, has stepped down from his post after shareholders reacted angrily to his multi-million pound bonus – awarded at a time when the retailer's shareprice is struggling.
Sir Peter's three-year reign as Chairman and as a Director came to an end after news of his £2.4 million bonus went down badly with shareholders.
Philip Hampton, former non-executive director of Belgacom, has been appointed as his successor. Mr Hampton takes up his £395,000 a year role on July 19.
Lord Levene, the Senior Independent Director and Chairman of the Nomination Committee, said: "We will now have the powerful combination of Philip Hampton with strong financial and strategic experience as Chairman and Justin King, a Chief Executive with proven retailing skills.
“Consultations with a number of major shareholders have shown that there is substantial support for this appointment.”
Sir Peter's exit came on the day that Sainsbury's issued its trading update for the first quarter of 2004/5, which concluded that underlying profit before tax for 2004/05 will be "significantly below consensus market forecasts". The market consensus stood at £505 million.
After today's announcements, the Sainsbury shareprice dipped by 16 pence to 268.75 pence shortly after 2pm.
Total sales growth for Sainsbury’s including petrol was up 1.9% for the quarter compared with 0.8% in the fourth quarter of last year. On a like-for-like basis, sales were up 1% compared with –0.9% for the fourth quarter last year. Buoyant trading in petrol has boosted this sales performance.
A "thorough review of the business" will be carried out by chief executive Justin King – the results of which will be known on October 19.
"While this review is taking place, Sainsbury’s is delaying future uncommitted investment in store developments and this move is likely to reduce capital spending in 2004/5 from an estimated £700 million to below £500 million before store acquisitions. In addition we will be focusing all resources on customer facing activities," the company said in a statement.
The review will encompass product quality, range, price and promotional activity; operational processes and systems; supply chain; central costs; and the store estate and property assets.
(gmcg)
Sir Peter's three-year reign as Chairman and as a Director came to an end after news of his £2.4 million bonus went down badly with shareholders.
Philip Hampton, former non-executive director of Belgacom, has been appointed as his successor. Mr Hampton takes up his £395,000 a year role on July 19.
Lord Levene, the Senior Independent Director and Chairman of the Nomination Committee, said: "We will now have the powerful combination of Philip Hampton with strong financial and strategic experience as Chairman and Justin King, a Chief Executive with proven retailing skills.
“Consultations with a number of major shareholders have shown that there is substantial support for this appointment.”
Sir Peter's exit came on the day that Sainsbury's issued its trading update for the first quarter of 2004/5, which concluded that underlying profit before tax for 2004/05 will be "significantly below consensus market forecasts". The market consensus stood at £505 million.
After today's announcements, the Sainsbury shareprice dipped by 16 pence to 268.75 pence shortly after 2pm.
Total sales growth for Sainsbury’s including petrol was up 1.9% for the quarter compared with 0.8% in the fourth quarter of last year. On a like-for-like basis, sales were up 1% compared with –0.9% for the fourth quarter last year. Buoyant trading in petrol has boosted this sales performance.
A "thorough review of the business" will be carried out by chief executive Justin King – the results of which will be known on October 19.
"While this review is taking place, Sainsbury’s is delaying future uncommitted investment in store developments and this move is likely to reduce capital spending in 2004/5 from an estimated £700 million to below £500 million before store acquisitions. In addition we will be focusing all resources on customer facing activities," the company said in a statement.
The review will encompass product quality, range, price and promotional activity; operational processes and systems; supply chain; central costs; and the store estate and property assets.
(gmcg)
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