Balfour Beatty Engineering Services MD Phil McGuire has resigned from the company and Nick Pollard will take on the role in the short-term as well as his role as UK chief executive, Construction News has learned.
Balfour Beatty this morning issued a £30m profit warning, largely attributed to the engineering services business. Its group chief executive Andrew McNaughton has also resigned.
Mr McNaughton is believed to have resigned over the weekend after a major 10-day review within the business, after it became clear it would not be able to meet its commercial forecasts in the BBES division.
Mr McGuire survived the latest reshuffle of the Balfour Beatty UK leadership team in November 2013, and had been reporting to Dave Donaldson who is executive director of engineering services.
Mr Pollard told Construction News this morning he had already been speaking with major clients to reassure them over the business’s strength.
“I don’t think there is any concern over the leadership structure. The customers I have spoken to have a very clear understanding that the group is strong, has great depth of talent and is still well-positioned to meet their needs well into the future.”
He said it was a “simple fact of corporate life” that as a group CEO of a company that had suffered several profit warnings, Mr McNaughton had decided to resign.
The UK chief executive said there were no planned job losses, or plans to divest of its under-performing engineering services division as competitors withdrawing from the market in the last couple of years meant it had “excellent prospects”.
Mr Pollard said as a £300m turnover business, BBES was only a “small part of the business” and that the regional projects business was growing in strength.
He argued that there had been “tremendous work done by Balfour Beatty Construction Services UK over the last 10 months” to get the business back on track.
“80 per cent of BBCSUK is working hard and in good shape. We have some fantastic opportunities and a really good pipeline”.
He said the majority of business units within the contractor were “regularly above forecasts”.
Asked how long it would take to replace Mr McNaughton, he said: “I have no idea how long it will take for the board to go to the market.”
He said this was “exactly why” Balfour Beatty non-executive chairman Steve Marshall would step up to the role in the short-term and put time and energy into the leadership of the group.
More to follow.