11th Feb 2015 11:39
LONDON (Alliance News) - Balfour Beatty PLC brought the search for its next chairman to an end on Wednesday after the FTSE 250-listed support services company appointed Philip Aiken to the role.
Aiken is currently the non-executive chairman of FTSE 250 technology company Aveva Group PLC and a non-executive director on the board of FTSE 100 electricity grid operator National Grid PLC. He will step down from the National Grid role on February 25 and will take up his role at Balfour on March 26, the day after incumbent chairman Steve Marshall is due to retire.
"Philip has many years of highly relevant international Board-level experience at the top of industry and we look forward to his valuable contribution to the business, including areas of paramount importance to the Group such as safety," said Balfour Chief Executive Leo Quinn.
Aiken's appointment will bring a close to Balfour's search for a new management team, having started the process in May last year following the unexpected resignation of Andrew McNaughton as chief executive.
The company took until October to appoint a replacement for McNaughton when it hired Leo Quinn from FTSE 250-listed defence services company QinetiQ Group PLC.
The chairman search was then dealt a blow in November when non-executive directors Belinda Richards and Bill Thomas both resigned from their roles. That was followed the same month by finance director Duncan Magrath saying he would leave his role when a replacement was found.
Magrath was eventually replaced in January by Phil Harrison from corporate services company Hogg Robinson Group PLC.
The reshuffling of the board came in the wake of a slew of profit warnings for the company, which resulted in the group commissioning a review of its UK construction services business after it got locked into a series of unprofitable contracts.
The results of that review were published in January when Balfour said it would cut its expected 2014 profits from its UK construction arm by a further GBP70 million. Balfour had already cut its 2014 UK construction arm profit forecast by GBP75 million at the end of September, by GBP35 million in July, and GBP30 million in May.
KPMG's review of the UK construction business found that Balfour had been tendering for contracts with very low margins, whilst at the same time under-estimating the costs and risks involved. The company had then failed to sufficiently review and manage the contracts, and didn't have any visibility, control or understanding on actual contract performance compared with the reported performance.
"The group considers insufficient visibility on project deterioration was compounded by an overly complex reorganisation programme that led to high levels of employee turnover at a time of extremely challenging market conditions," Balfour had said at the time.
The company had said it will continue to simplify the UK construction business, stripping out layers of management. It said CEO Quinn also will oversee a programme to strengthen its bid approval and project delivery review processes, change the culture of the business, boost its leadership and align all staff grade incentives with programme targets, and establish a standard reporting system to increase transparency.
Balfour shares were up 0.2% 232.50 pence on Wednesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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