In an ominous sign, shares in the auto products group Bapcor (ASX:BAP) were halted on Tuesday ahead of a trading update, which is expected to outline sliding sales and profits.
Simultaneously, the company’s incoming CEO, Paul Dumbrell, is no longer incoming, quitting two days before assuming the role at the company that owns the well-known auto products chain, Autobarn.
To compound matters, Dumbrell would have been the fourth CEO in a couple of years. The new CEO will effectively be the fifth in the role since late 2021, even if the current stand-in, Mark Bernhard, is chosen by what must be a shell-shocked board.
Paul Dumbrell was named on February 1 this year to replace then-CEO Noel Meehan, who shocked the market by quitting after just two years, citing family reasons.
Dumbrell was due to take up the CEO’s role on May 1. His family founded Autobarn, one of Bapcor’s key retail businesses.
Simultaneously, in early February, Bapcor’s chair, Margie Haseltine, announced that she would not stand for re-election at this year’s annual general meeting to ‘facilitate an orderly transition’.
“In thinking about the future success of the business, and given Noel’s decision to retire from executive life, we are focused on ensuring that Bapcor has the right executive team to drive profitable growth and the right Board to give strategic oversight to the company,” Haseltine said.
These changes came just ahead of the company’s interim results for December 2023, which saw the company’s first-half earnings weaken despite a modest rise in revenue.
Now, from market reports, there seems to be a replay of some of those events.
Dumbrell, who took on the role after five years as CEO of Total Tools (now controlled by Metcash), has more than 15 years’ experience heading automotive and retail businesses, including as CEO of Automotive Brands Group, founded by his father, Garry, in the mid-1980s. He is also a winner of the Bathurst 1000 car race.
Yesterday, Bapcor said Dumbrell had “made a personal decision” not to take up the CEO’s role.
Meehan took the job in February 2022 after two months as interim CEO, replacing the long-serving chief executive Darryl Abotomey, who was ousted by the board.
The company stated that “To ensure stability and consistency, Mark Bernhard will continue as Interim CEO while the Board begins a new executive search. Mark Bernhard has more than 30 years of global experience as an executive in the automotive sector.”
Bapcor Chair Margie Haseltine said in Tuesday’s statement: ‘This is a disappointing situation; however, we are pleased that Mark will remain acting in the role so we can continue to leverage his expertise and experience.’
Bapcor shares are up 7.4% year-to-date, well ahead of the 0.3% rise in the ASX 200.
Given the surprise nature of Tuesday’s CEO news and the hastily called trading update, analysts and investors think that gain might not be around for long.