Wolseley has suffered an embarrassing U-turn after the FTSE 100 listed plumbing and heating products group said it chose to finance director would not be joining after all. In January, the company said that Simon Nicholls, chief financial officer at defense group Cobham, would arrive later in the year, and chairman Gareth Davis praised his “caliber and expertise.”
But now, Wolseley says Nicholls will not now be taking up the position. Instead, David Keitner, currently finance head at its US subsidiary Ferguson Enterprises, will become interim finance director on 1 September. A spokesman for Wolseley told Reuters that the selection process to fill the post permanently would begin immediately.
It’s a confidential matter between Simon and the board.
Analysts at Barclays said: It would appear Wolseley has decided not to proceed due to the recent issues at Cobham, where Mr. Nicholls is currently CFO. Since the original announcement of Nicholls’ move, Cobham launched a £500m rights issue after a profit warning. From our point of view, it is the right thing to do given ongoing questions regarding the situation there and possible reputational risk to Wolseley from Mr. Nicholls’s appointment. In addition, having these questions circling at the beginning of a new stage would be an unhelpful distraction. It is also a brave, decisive step by John Martin, encouraging at the start of his time as chief executive.
Canaccord Genuity said:
Clearly, this is slightly inconvenient for Wolseley and prevents as smooth a transition as was previously expected. However, operationally we do not see any big risk for Wolseley. The interim chief financial officer, David Keltner, is currently responsible for the largest part of the business; the US business accounts for over two-thirds of the group. Clearly, despite the near-term inconvenience, it is more important than the group appoints a suitable permanent CFO.