(Adds details and background.)
By Ian Walker and Simon Zekaria
LONDON--Balfour Beatty PLC (BBY.LN) on Wednesday appointed
Philip Aiken as non-executive chairman and announced a broad
overhaul of its operations to boost profits, after turbulent months
for the ailing support services and construction company.
Mr. Aiken will take up his new post on March 26, replacing Steve
Marshall, who is retiring after 10 years with the company. Balfour
Beatty said Mr. Aitken has extensive global business experience in
the industrial and resources sectors, having worked in the U.K.,
U.S., Asia and the Middle East.
He is currently non-executive chairman of software engineering
group Aveva Group PLC (AVV.LN), a non-executive director of
National Grid PLC (NGG) and of Newcrest Mining Ltd. (NCM.AU). He
will step down from the board of National Grid on Feb. 25.
At 1448 GMT, Balfour Beatty shares were up 0.2% at 232.5 pence.
Analysts said the appointment comes at a key time for the firm as
it seeks fresh direction, boosting investor sentiment.
"We see huge scope to generate value through portfolio
rationalization, margin increases and better working capital. The
balance sheet is much stronger than the market thinks," said
Liberum analyst Joe Brent.
In August last year, the London, U.K.-based company spurned a
potential 2 billion pound ($3 billion) all-share merger with
smaller rival Carillion (CLLN.LN), which would have created the
U.K.'s largest construction company. Instead, Balfour Beatty agreed
to sell its U.S. professional service unit Parsons Brinckerhoff to
WSP Global Inc. for $1.35 billion, a transaction that was a
stumbling block in the merger talks with Carillion.
After appointing Leo Quinn as chief executive to replace Andrew
McNaughton, the company in January issued a profit warning, the
latest of a series in the past couple of years, citing cost
overruns and project delays. Balfour also cancelled a proposed
GBP200 million buyback program and said it would review its
dividend policy.
"We doubt Leo Quinn will pass up the opportunity to insert more
caution in March and we fear he will leave the door open to more
downgrades in August," said Mr. Brent.
On Wednesday, Balfour Beatty said it is focused on a group-wide
overhaul to improve profit and cash generation.
"I am very much looking forward to working with the board and
the executive team in setting the business back on the course of
value creation with Leo and his team," said Mr. Aiken.
Mr. Marshall, 58, was appointed a director of Balfour Beatty in
2005 and chairman in May 2008, before becoming executive chairman
in May 2014.
Write to Ian Walker at ian.walker@wsj.com and Simon Zekaria at
simon.zekaria@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires