British builder Carillion names former BAE executive as CEO

British builder Carillion, which has issued two profit warnings this year, named Andrew Davies as its chief executive on Friday, bringing in a former executive of defense company BAE Systems to help turn around its business.
Davies, currently head of family-owned builder Wates Group, will take over from interim CEO Keith Cochrane on April 2, Carillion said.
The appointment comes three months after the small-cap construction and support services company fired its CEO and announced an £845 million write-down on construction contracts and a profit warning. It issued a second profit warning in September.
Now, 54-year-old Davies’ biggest task at Carillion will be to reduce its large debt pile, which is expected to reach about £1 billion by the end of the year, analysts say.
“Sorting out the balance sheet and sorting out the enormous debt Carillion has, that will have to be (Davies’) focus and if he can do that, then it will be a very good thing for the company,” Liberum analyst Tom Musson said.
In positive news, Carillion this week agreed to new credit facilities and deferrals on some debt repayments and pension obligations, which together are expected to improve its undrawn credit in 2018. However, the group has said it may need to undertake a share placement.
Davies has been CEO at Wates Group since 2014. The company reported a more than 20 percent jump in 2016 turnover to £1.5 billion.
Sky News had reported in March that housebuilder Bovis had considered Davies for its top job. The group was then battling a profit warning and facing fire from buyers over the quality of some of its homes.
“The swift appointment of an experienced CEO with a relevant background might be seen a positive for the stock,” Applied Value analyst Stephen Rawlinson wrote in a note.

Source:Arabnews