Chief executive makes surprise exit from Spice

The Leeds-based group insisted Mr Rigby's departure was his "personal decision". He will be replaced by interim chief executive Martin Towers while a permanent successor is sought.

Mr Rigby said it had been "absolutely fantastic" building the group, but felt it was "time for that to be carried on by somebody else".

Shares in Spice, which runs a diverse range of services from checking overhead power lines to training engineers, initially fell as much as 5.7 per cent but regained some of their losses to close the day down 2.5 per cent at 49p.

Analysts were surprised at his abrupt departure but said his

acquisitive strategy had increasingly been at odds with investors' wishes.

Mr Rigby founded the group in 1996 with a management buy-out from Yorkshire Electricity and led it on the acquisition trail.

However, shares in the group have tumbled more than 45 per cent since October on downgrades and a 42.9m writedown on its gas arm in December, which drove the group into the red.

Mr Rigby will receive a pay-off of a year's salary, which including benefits and bonuses totalled 676,000 in 2009.

Yesterday he said his departure was "entirely amicable"

and "engineered". "We have gone from one contract of 3m to turn over 370m; from 12 staff to 4,800 worldwide," he said. "The future is more about growing these businesses organically."

He added he recognised the need to cut debt, which had risen to 116.5m by October, compared to 95.8m in May. "That most certainly was the plan."

Mr Rigby said while he believed he could have delivered organic growth, "spending the next few years (demonstrating) that I'm a leopard that's changed my spots did not seem a particularly good use of my time".

"It's just time for that to be carried on by somebody else," he added. "I'm very relaxed about the position but I do not want to spend the next two to three years pushing water up a hill."

Mr Rigby now plans to concentrate on other business interests, which include a biodigester company, but said he is unlikely to return as chief executive of a quoted company. He added he remains a supportive shareholder in Spice, with a stake of 8.6 per cent.

Chairman Peter Cawdron said: "Simon deserves enormous credit for developing the Spice business since the original buyout."

Mr Towers, former finance director of Yorkshire Water owner Kelda, takes over immediately. He said Mr Rigby's departure was the "end of an era".

"He has grown this business for a long, long time," said Mr Towers. "He's done a tremendous job in terms of creating the company and taking it so far. My main focus is picking up the baton from Simon."

Analysts said while Mr Rigby's approach was suited to acquisitive growth, the City had started to lose confidence.

One major investor, Ignis, recently told clients it had profited from a short position in the company, using a fall in Spice's share price to make money.

Another unnamed major shareholder yesterday said: "We were getting increasingly concerned with the strategy and the impact it was having on the share price but we had made no effort to oust him.

"However, we believe that he has made the right decision for all concerned."

An analyst said: "It had got to the stage where certain parts of the business were starting to underperform. He had probably fallen out of love with the markets over the last few months, with the share price falling and pressure from investors to cut debt.

"People started voting with their shares and the market moved against him. I suspect he will be pretty hacked off with the City."

However, he added Mr Rigby achieved a "massive amount of good" and his skills will be highly prized in the private equity and quoted company spheres.

The man behind tale of success

Simon Rigby graduated from the University of Hull with a degree in economics and joined Yorkshire Electricity.

While at Yorkshire Electricity, he became a 'change agent',

restructuring businesses the company was keen to dispose of.

He was seconded to the board of The Freedom Group, and in 1996 led its management buyout from Yorkshire Electricity, starting with a single contract worth 3m. He renamed the business Spice, based on the mantra of society, people, innovation, customers and excellence.

Following rapid expansion it floated on AIM in 2004. The company achieved a main market listing in 2008.

Mr Rigby, who was born to farming parents, has other business interests including about 150 buy-to-let prop-erties in Leeds and Preston, a butchery business, and also a biodigester business.

He and his family also farm about 2,000 acres in the North West of England.