Prominent UK businessman Allan Leighton is to take over as Chairman of STB maker Pace, which recently gained number one ranking among set-top box manufacturers, but which has also attracted adverse analyst comments following profits warnings.
Leighton formerly headed supermarket chain Asda, but came to prominence during his tenure as chairman of Royal Mail. He is also a non-executive director of digital pay-TV platform BSkyB. He has also been a director of Leeds United football club. To make sure his interests are aligned with shareholders Leighton has committed to buying at least £200,000 of Pace shares.
The company has announced the proposed appointment of Leighton as its new Non-executive Chairman and the retirement of Mike McTighe, who will be stepping down after ten years as Non-executive Director, including five as Chairman.
Leighton has joined the Board as a Non-executive Director and is expected to be appointed Chairman over the summer months, allowing a period for Mike and Allan to undertake an orderly transition of responsibilities.
Mike McTighe commented, “I am proud to have played a significant part in Pace’s turnaround over the past five years. Despite the recent setbacks Pace is well positioned for the long term and I am confident it will continue to lead the global digital TV market. The Board has undertaken a thorough and exhaustive search for my successor and it’s terrific that we are appointing someone of Allan’s calibre as the next Chairman of Pace.”
Allan Leighton commented, “I’ve watched the Pace business develop with both its ups and bumps for fifteen years. I’ve always felt there is a ‘great technology company’ in there. My task now with the Management and the Board is to deliver that ‘great technology company’ and the value that goes with it without the bumps. This process will start with a Strategic Review of the Company.”
Neil Gaydon, CEO of Pace, commented, “Mike has played a key role in developing Pace’s industry leadership position and I would like to thank him for his service and the guidance he has given to this business and to our management team. We are very excited to be welcoming Allan Leighton to the board; his track record of running businesses is outstanding, and we very much look forward to his contribution”.
Pace has issued profit warnings recently, partly driven by lower margins, with supply chain problems caused by the Japanese earthquake and tsunami in March also cited as contributory factors.
The recent setbacks raised concerns in the City, with Altium Securities advising: “Pace now faces an uphill task in rebuilding confidence and we believe needs a refresh of the leadership team.”
Gaydon had been credited with restoring the company’s fortunes, taking Pace from the brink of bankruptcy to market-leader, but problems arose in March 2011, when the company angered small investors when it failed to mention the delay of its major US contract in its annual results, only to disclose the price-sensitive news during a meeting with analysts.
The reaction to its May profit warning was scathing, with many analysts calling for sweeping changes in the boardroom to re-establish credibility with shareholders. “We believe some investors were unconvinced by management’s explanation of the two recent profit warnings, which, combined with mounting long-term concerns (cord-cutting, IP delivery), have probably exacerbated the de-rating,” advised Exane BNP Paribas.