Avon Rubber announced this morning that CEO Rob Rennie has left and been replaced with Paul McDonald, formerly managing director of Avon’s Dairy division. This news comes as a surprise and is likely to raise some questions over the CEO and CFO transition, with the CEO only being in post for just over a year. However, the group has appointed an executive already known to many who have followed the business, and as such should be seen as a good appointment with a track record of decisiveness and getting things done.
For the past decade Avon Rubber has been known for its very stable management team, but in the last few months there has been significant upheaval. While this morning’s announcement was unexpected, we see it as the start of a new and promising chapter for the company, bringing renewed cohesion.
As a longstanding Avon employee, Mr McDonald is well versed in the company’s strategy of driving organic growth through R&D and good execution while making tactical and strategic acquisitions where appropriate. In the Dairy division he has shown he is able to identify and pursue organic and inorganic growth opportunities. Most notably he led the group’s largest acquisition to date, the €30m purchase of InterPuls. We understand he has wasted no time in getting his feet under the desk, and has already made a number of key management appointments within the divisions to ensure continuity. We expect the new divisional heads to be presented to the market at Avon’s first half results on 16 May 2017.
While in the short term, there may be some caution from investors about another round of change at Avon, we feel the group remains in a strong position to continue its sustained growth path and strategy as highlighted by the positive trading update.