The chief executive of construction giant Balfour Beatty, Ian Tyler, has announced he will step down from the company in the wake of November’s surprise profit warning.
In leaving his position at the end of April, after eight years at the firm, Mr Tyler hands over the reins of the construction company to his current deputy and chief operating officer Andrew McNaughton.
Announcing his departure, Mr Tyler said he believed the “time is right” to hand over Balfour Beatty to Mr McNaughton ahead of the “next stage of its development”.
Mr McNaughton, a chartered civil engineer, joined Balfour Beatty in 1997 and was appointed to the board in 2009 as chief operating officer.
He was promoted to deputy chief executive as part of a succession plan last July.
The group, which specialises in large infrastructure projects, used an interim statement in November to warn that it expected full-year profits to fall at least £10 million behind expectations, blaming weak construction and rail markets across Europe for reducing its order book from £15 billion at the end of June to £14.4bn.
However, issuing its pre-close trading statement yesterday for the year to December 31, the group said orders awarded last month notably the £1.2bn eight-year National Grid contract, and the tunnel contract won by Gammon in Hong Kong had put its order book back on track to end nearer to £15bn.
Despite the difficult trading conditions, the group also climbed to the top of the contractors’ most recent monthly league table, aided by a five-year road deal in Scotland.
The deal, worth £125m, to manage and maintain 681km of trunk roads in south-west Scotland, was the stand-out contract award during November, worth £366m in total.
Balfour Beatty has also since won a £13.2m contract from Transport Scotland to refurbish the 30-year-old Kessock Bridge.
However, the group also used yesterday’s trading update to inform shareholders it was taking action, both operationally and strategically, to “mitigate any adverse impacts” on its business as it struggles with tough market conditions.
It said: “While the magnitude of the order book is broadly in line with the levels at the end of 2010 and 2011, there are certain trends that are worth noting.
“In-keeping with our strategy, and given the difficulties in a number of our markets, particularly in UK construction and European rail, the order book mix is shifting from construction to professional services and support services and, overall, from buildings to infrastructure projects.”
Due to the longer-term nature and back-end-loaded margin profile of these contracts, the firm said most of the benefit to revenue and profit will not arise until next year or thereafter.
Mr McNaughton said: “It has been a privilege to be part of the leadership team at Balfour Beatty for several years, only now surpassed by the opportunity to take over from Ian as chief executive.
“We have a strong company and are in a good position to meet the short-term market challenges and take advantage of the longer-term opportunities.
“I am looking forward to building on the solid platform that we have created, and leading us to the next stage of strategic growth.”
Average net debt for 2012 was approximately £50m. Full-year results will be released on March 7.
Shares closed down 8.50 at 281.50.
business@thecourier.co.uk