Shares digital

Ringo Francis, founder of cleaning products group Zenith Hygiene (ZHG:AIM), has been removed as chief executive and chairman after the company revealed the extent of overstated earnings for 2006 and admitted to misreporting subsequent accounts.

Having already flagged errors in its 2006 results, which initially showed £670,000 profit, Zenith has now confirmed a £2.7 million operating loss. Combining this negative effect with higher operating costs and further operational problems, 2007 results show a £8.6 million loss before tax.

Zenith now admits the £486,000 reported half-year operating loss in 2007 was also inaccurate.

Francis, who still owns 10.6% of the group, said last September ‘it wouldn’t be long before the business plan is humming’. His guidance at the time towards a near-term recovery now seems as overstated as the past few years’ results. Gavin Gracie, a turnaround expert, takes over as chief executive.

The shares in Zenith have fallen 88% to 16p in the past year.

Shares says: Investors have been failed by poor management. How many more times will it promise a recovery?

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by: Dan Coatsworth