Kier (KIE) chief executive Haydn Mursell has been asked to step down by the group's board, following a disastrous December 2018 rights issue that saw just 38 per cent of shares taken up by investors.
Mr Mursell had been on the board at Kier for eight years, beginning as group finance director in August 2010, before rising to the role of chief executive in July 2014. Chairman Philip Cox said: "The board believes that, following the completion of the recent rights issue, now is the right time for a new leader to take Kier forward to the next stage of its development.”
Mr Cox will act as executive chairman in the interim period until a new chief executive is found. The recruitment process for a chief executive is already under way, but no timeline currently exists for an appointment.
The recent rights issue succeeded in raising the £250m sought by Kier, as it had been underwritten by banks and brokers. Kier's largest shareholder, Aberdeen Standard Investments (ASI), said it was supportive of the board's decision. ASI fund manager Georgina Cooper said: "The new chief executive will join a business on a strong footing, both operationally and financially, and we believe that fresh oversight at the executive level will reinforce delivery of Kier's strategy to 2020 and beyond," she added.
As first reported by Sky News, Woodford Investment Management, the second-largest shareholder in Kier, had also previously questioned the futures of Mr Mursell and finance director Bev Dew.
Meanwhile Nicholas Hyett, equity analyst at Hargreaves Lansdown, highlighted the high debt levels, weak cash conversion and low margins that have plagued the construction services sector. “Kier’s decision to bite the bullet early and go for a rights issue was the right one,” he added, arguing that the rights issue “should see it avoid the death spiral that hit Carillion shares – but it’s still a very unpleasant experience for investors”.
