Alumasc Group shares fell sharply after the building products firm suspended CEO Pamela Bingham pending a professional conduct investigation.
Alumasc Group PLC (LSE:ALU) shares dropped sharply on Friday after the board suspended chief executive Pamela Bingham pending an investigation into her professional conduct, a leadership shock that overshadowed an in-line annual trading update.
Shares in the AIM-listed group were trading at around 211p on Friday morning, down about 8% on the day. The stock fell as low as 184p in early dealing, a new 52-week low, before recovering some ground. Alumasc closed at 230p on Thursday and had traded as high as 380p over the past 12 months.
WELCOME BONUS - Free Share Bundle When You Invest £50!
Get up to £500 cashback for investing with IG.
Alumasc said Bingham had been suspended by the board pending a full investigation into matters relating to her professional conduct. No further details of the allegations were disclosed. Non-executive chair Vijay Thakrar has assumed the role of interim executive chair with immediate effect, backed by the group’s divisional managing directors and chief financial officer Simon Dray, who together have around 35 years’ combined tenure at the company, Alumasc said in its announcement.
The leadership change came alongside a full-year trading update in which Alumasc said revenue for the year to 30 June was expected to be about £107m, down from £113m the previous year, with underlying pre-tax profit of about £10m, down from £14m. The company said this was broadly in line with revised market consensus. Housebuilding Products revenue grew around 16%, while Water Management revenue fell by a similar margin, partly reflecting a large prior-year contract in Hong Kong. The order book was 49% higher than a year earlier, and net debt stood at about £7m.
Bingham had only been in the top job since April, having joined Alumasc as chief executive designate in March and taken over from predecessor Paul Hooper on his retirement. The weaker trading backdrop was already flagged in an April update, when Alumasc pointed to subdued demand from affordability concerns, planning delays and macroeconomic uncertainty linked to the conflict in the Middle East; Friday’s figures confirmed that guidance rather than delivering a fresh downgrade.
Interim executive chair Vijay Thakrar sought to reassure markets, saying the group had “delivered a performance broadly in line with the expectations set at the Q3 trading update, with strong performances at Housebuilding Products and Building Envelope divisions.” The scale of the morning’s share price slide suggested markets were more focused on the uncertainty created by the suspension than on the underlying trading performance.
Alumasc said it would update shareholders further in due course on both the investigation and trading, with full annual results due in September. Until the board concludes its inquiry into Bingham’s conduct, the vacancy at the top of the 475-employee group looks set to remain the dominant issue for the stock.