Leighton Holdings revealed a new big contract yesterday and confirmed finally that long time CEO Wal King is to retire.
The announcement from chairman David Mortimer, confirms reports last week that Mr King will be replaced by the company’s chief operating officer David Stewart.
Leighton shares rose 97c to $34.34 yesterday, ahead of the announcement. That was a rise of 2.9% in a market up more than 1%.
It’s the highest the shares have been since early May.
Leighton’s board approved the new CEO a week ago yesterday, but stayed announcing the change officially because Mr King was overseas on a company roadshow.
Mr Mortimer said Mr King had made an extraordinary contribution to the company during his 42-year career.
"During Wal’s leadership, Leighton has risen from being a middle ranking Australian construction company to a global leader as a contractor and the world’s largest contract miner," Mr Mortimer said in a statement on Monday.
"Just recently, Engineering News Record ranked Leighton as the 12th largest contractor by revenue in the world," he said.
During Mr Wal’s time as chief executive Leighton’s revenue has grown from $1.3 billion in 1987 to this $18.6 billion worth of revenue this year.
"Wal’s performance and longevity mark him as one of Australia’s truly great business leaders and we are delighted to be retaining his services in a different role in the future.
"The Board has agreed with Mr King that he will retire as an executive of the Company from 1 February 2011 but he will remain engaged in a consultancy role so that we can retain access to his skills and experience" Mr Mortimer said.
Mr Mortimer also said that the Board was very pleased to have an executive of David Stewart’s capability to step into the role made so successful by Mr King.
"The transition from Mr King to Mr Stewart is the result of a comprehensive succession process that has been underway for the last 2 years.
"The Board undertook a comprehensive review and are proud of the quality of management talent that was available to succeed Mr King," said Mr Mortimer.
"David (57) has served as one of Leighton’s Chief Operating Officers since July 2009 and prior to that was Managing Director of John Holland Pty Ltd for 3.5 years.
"David is an exceptionally capable manager having led John Holland to record levels of revenue and profitability, and he continued to expand the diversity of that company. He has been with the Leighton Group for some 24 years, having been a senior manager with Leighton Major Projects and Thiess for 15 years before moving over to John Holland in 2000," said Mr Mortimer.
But the uncertainty at the top of the company as Mr King resisted agreeing to retire, hasn’t stopped the company continuing with its usual success in winning major contracts.
Mr Stewart’s old company, John Holland Group, one of the three major operating arms of Leighton, yesterday said it had won a $276 million deal for a new port in Western Australia.
The port is associated with miner Rio Tinto’s Cape Lambert Port B project in the Pilbara iron ore province
Under the deal, John Holland will build a 920 metre jetty and two-berth wharf, new ship loading facilities and related piping works.
The company’s managing director Glenn Palin said the announcement built on John Holland’s experience in building marine extension works in the resources sector.
"In bringing together the specialist skills of our Energy & Resources business with the civil construction skills of our Western Region business, the contract highlights the value of our internal collaborative model for clients looking to develop large and complex construction projects," Mr Palin said in a statement.
Construction of the new port at the Cape Lambert iron ore facility at Port Walcott, around 40 kilometres east of Karratha in Western Australia, is expected to begin immediately, with completion due in late 2012.
This contract followed the announcement at the start of the month by the 45% owned Al Habtoor Leighton Group of a $220 million building project in Dubai by Daman Investments.
Leighton said the project involves the completion of Daman’s "Buildings by Daman" project at the Dubai International Financial Centre.
The project has already commenced – HLG will be responsible for completing its delivery.
The development comprises three towers – a 20-storey office block, a 60-storey hotel and a 60-storey apartment block with an intricate steel inter-connection between the two towers.
HLG will commence work immediately and the project is due for completion by December 2011.
