Investors react positively to Carillion’s announcement of new CEO

Investors reacted positively to the announcement of a new CEO by beleaguered construction and facilities management group, Carillion.

The Wolverhampton-based group, which has undergone a torrid time since a dire profits warning in July, has appointed Andrew Davies – current chief executive of Wates Group – to the role.

Shares rose almost 4% following the announcement, which helped to underpin earlier gains following news of a £140m credit facility and the £50m disposal of part of its UK healthcare operation.

Nevertheless, shares are still only 46.00 and are bumping along in the lower echelons of the stock market. The group’s fall from grace has seen its market cap fall to below £200m and its relegation from the FTSE 250.

Mr Davies will therefore have his hands full trying to restore confidence in the group when he assumes office next April.

Mr Davies’ arrival on April 2 will also see him elevated to the group board.

The group has announced that interim CEO Keith Cochrane will continue to lead Carillion until then.

Mr Davies was appointed Wates’ chief executive in 2014. Prior to that he held a series of senior roles with BAE Systems during a 28-year career with the group. He is also currently a Non-Executive Director of Chemring Group.

Carillion said he bought the right mix of executive, strategic, turn around and leadership skills to the company as well as experience of complex public sector contracting in projects, support services and construction.

Carillion chairman Philip Green said: “Andrew has the ideal combination of commerciality, operational expertise and relevant sector experience to build on the conclusions of the strategic review and to lead the on-going transformation of the business.

“His experience and his people-focussed personal style are an ideal combination for our business. We are pleased that he has agreed to join us and we are grateful to Keith Cochrane for his interim leadership of Carillion.”

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