By Arathy S Nair and Sangameswaran S
(Reuters) – British builder Kier Group named former Carillion CEO-designate Andrew Davies to its top job on Tuesday as it strives to cut debt and respond to problems afflicting the wider outsourcing industry.
Davies will succeed Haydn Mursell who stepped down as chief executive officer in January a month after many of the company’s shareholders snubbed a new issue of stock.
Davies, 55, will be tasked with the challenge of whittling down Kier’s 180 million pound debt pile and rebuilding confidence in the company.
Davies, who worked with BAE Systems for 28 years in many senior roles, had been due to take over as CEO of Carillion before it collapsed in January 2018. He will take on the top job at Kier on April 15.
The Briton was previously CEO of privately held construction services company Wates Group Ltd from 2014 to 2018.
“He has good operational experience in the industry. So from that point of view, it seems a sensible and obvious choice,” Canaccord Genuity analyst Aynsley Lammin said.
The market would be keen to see Davies’ clarify his strategy, including his plans for Kier’s cost savings program launched in 2018, Lammin added.
Shares in Kier Group fell more than 16 percent on March 11 after it disclosed an accounting error that pushed up its debt for 2018.
Investors have become increasingly nervous about outsourcing and construction markets in Britain following the collapse of Carillion early last year and Interserve being placed into administration last week.
Kier shares, which have lost more than 75 percent since their peak of more than 2000 pence in 2007, rose 2 percent to 493.8 pence at 1015 GMT. They were among the top gainers on the UK midcap index.
Kier, which has contracts for major construction projects in Britain including London’s Crossrail link, is set to report half-year results on Wednesday.
(Reporting by Justin George Varghese and Sangameswaran S in Bengaluru; Editing by Anil D’Silva/Keith Weir)