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Darby: recent appointment

22 April 1999: Troubled glassmaker Darby appointed a new chief executive yesterday to oversee the group“s return to health.
Hugh Hayes, 47, will join the Scunthorpe company on 26 April with a brief …

22 April 1999: Troubled glassmaker Darby appointed a new chief executive yesterday to oversee the group“s return to health. Hugh Hayes, 47, will join the Scunthorpe company on 26 April with a brief to take over the day-to-day running of the group. He has previously held top roles at a number of companies including British Syphon Industries and subsidiaries of specialized engineering company TI Group. Hayes will replace former chief executive and founding chairman Michael Darby, who resigned at the end of January following two profit warnings. Hayes will join Darby“s recently appointed non-executive chairman Mark Abrahams, who is also chief executive of Hull-based engineer Fenner and a previous non-executive director of the company. At the end of last month the company shocked the City with the announcement that it had gone into the red in 1998. Despite the previous two profit warnings, the extent of the damage still came as a surprise to investors. At the time, the company said that trading had been buoyant in the early part of 1998, but the failure of a critical furnace had disrupted both production and customer service. The disruption resulted in lost sales and an increase in operating and recommissioning costs. While the direct costs were partly offset by an insurance claim, the company said that the full impact of the disruption was not appreciated at the time. These problems were made even worse by delays to the new furnace at Scunthorpe. Abrahams admitted last month that, in retrospect, it was clear that the difficulties had distracted the management from integrating the newly acquired businesses. In the year to 31 December 31 sales rose by 9% to UK 24.7 million, but this reflected a fall of approximately 5% in sales from the core business and turnover of UK 3.9 million from the newly acquired businesses. Operating profit before exceptionals was substantially below last year at UK 1.35 million compared to UK 2.25 million in 1997. The company warned last December that it would take a UK 3.5 million exceptional charge following a review of the value of its assets in relation to trading. Of this figure, UK 1.7 million was treated as a prior-year adjustment and UK 1.8 million is shown as an exceptional item in the 1998 figures. As a result of the exceptional item and a slightly higher interest cost, the group recorded a loss before taxation of UK 1.2 million compared to a restated profit of UK 2 million in 1997. Despite the results the directors proposed a final dividend of 0.5p a share, which they said reflected the underlying trading position. This means that shareholders received a total dividend for the year of 1.8p a share. Darby“s shares dropped nearly 4% recently to close down 1p at a new low for the year of 25.5p.

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