A smart move for Boots CFO?
On the frontline: the merger with Alliance Unichem has left Boots' newly-appointed CFO in an awkward position
Last week must have been bitter sweet for Jim Smart. As he landed the top
finance post at Boots it announced merger plans with a high street rival that
could see him out of a job in a matter of months.
Smart now faces the uncomfortable prospect of having to do his job well and,
effectively, making himself redundant, with the £7bn proposed merger between
Boots and Alliance Unichem in need of strict financial stewardship if it is to
be successful.
Smart, a former senior financial manager at Abbey National, was favourite to
become chief financial officer after apparently impressing Boots executives with
his ‘acting up’ skills.
As financial controller since 2003, he stepped into Howard Dodds’s shoes in
May when the long-standing CFO left under the cloud of three consecutive profit
warnings.
Smart was granted the half-way house as acting CFO, but denied a seat on the
board.
Ironically, as he takes his place with the executives, his permanent position
has become just as temporary with both Alliance Unichem and Boots pushing hard
for the merger.
The top jobs have already been carved out with both companies presenting
their ‘dream team’ to potential investors. Boots chairman Nigel Rudd and chief
executive Richard Baker will keep their positions in the new group, Alliance
Boots. But the top finance role has been ceded to Unichem FD George Fairweather.
Such a potentially short tenure is hardly motivating for Smart, but Boots has
already made it clear that the next few months will be incredibly hectic for
their new CFO.
‘He will have a very full agenda over the coming months and I know that he
will continue to do a great job,’ said Rudd ominously.
Smart will play a key role in reversing the high street chemist’s flagging
fortunes, which will be vital if the merger is to proceed and a sceptical City
won over.
Its preliminary results, delivered by Smart in May, saw pre-tax profits fall
by 11.4% as its struggles to focus on its UK health and beauty business.
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But he has already had a significant hand in one success. The sale of Boots
Healthcare International, which owns products such as Nurofen, to Reckitt
Benckiser was completed just days after the merger plans were outlined. Put up
for sale in March as the company sought to rationalise its interests, the
division fetched a surprise £1.93bn, it was valued at £1.2bn.
This deal is expected to smooth the path of the merger with £400m from the
sale going directly into the pot of the proposed new group. The rest will be a
welcome bonanza for Boots shareholders.
It seems Smart has already done a good job of making himself redundant.