Stobart Group is to restructure is board of directors for the second time this year, with executive chairman Avril Palmer-Baunack to leave the company in May.

At the same time the company has signed a new three-year contract with Tesco, which runs until 29 February 2016, formalising its role as primary and secondary distribution service provider.

It has worked with Tesco on a “pay as you go” basis for the past eight years and currently provides secondary distribution to nine Tesco DCs in the UK and one in the Republic of Ireland.

Tesco is currently in the process of revamping its distribution network, a move which will see three depots close.

However the new deal has been overshadowed by further boardroom changes after Palmer-Baunack was told her role was "no longer appropriate” – despite claiming on 21 January that Stobart needed an executive chairman to “meet the challenges and opportunities within our strategy”.

Two days earlier Stobart had discontinued its chilled division, and on the same day as Palmer-Baunack took control it sold its automotive aftersales arm to Paragon Group.

Palmer-Baunack will remain at Stobart as a non-executive chairman until a “suitable independent” is found – expected to be on or around the release of the group’s year-end results on 16 May.

The outgoing Rodney Baker-Bates, who announced his retirement at the same time Palmer-Baunack was promoted from her previous role as deputy chief-executive, is to stay on until her replacement has been found.