Carillion chief quits after profit warning

British construction firm Carillion's CEO Richard Howson has stepped down with immediate effect as the firm starts “undertaking a comprehensive review of the business” following a profit warning, said a report. Howson, who has been the group’s boss since January 2012, has been replaced by non-executive director Keith Cochrane on an interim basis while the firm searches for a permanent group chief executive, according to The Financial Times. Carillion issued a profit warning on contracts worth £845 million ($1.09 billion) at June 30, 2017, of which £375 million relates to the UK (primarily three PPP projects) and £470 million to overseas markets, the majority of which relates to exiting markets in the Middle East and Canada, stated the report. It said the contracts could cost the business up to £150 million, primarily in 2017 and 2018. As part of its sweeping changes, Carillion has confirmed it will exit construction markets in Egypt, Qatar, and Saudi Arabia, and it will also no longer take on construction PPP projects. The company added it would only take on further construction work “on a highly selective basis and via lower-risk procurement routes”, reportedThe Financial Times. The group added that its exit from “non-core” markets and geographies would raise up to £125 million over the next 12 months, while the group strategic review would include further annual cost savings. Cochrane has been a member of Carillion’s board since July 2015, and his former roles include chief executive of Stagecoach Group. The management changes follow the announcement of a “comprehensive review” at the firm, with a number of major changes announced at its construction arm. Howson will likely remain with Carillion for up to a year to support a transition period, although he has stepped down from both his role as chief executive and the group’s board, said the report, citing sources. Carillion said its revenue for the first half of 2017 was expected to be “similar to that in 2016” at around £2.5 billion. As a result of the review and the profit warning, Carillion said revenue for the year is now expected to be between £4.8 billion and £5 billion, with overall group performance expected to be below management expectations. In its most recent full-year results, the group posted a revenue of £5.21 billion and a pre-tax profit of £146.7 million, it added.