Carillion shares crashed by 40% after the company revealed lower than expected operating profits for the first half of 2017 and and a deterioration in cash flows on a number of construction contracts.
As a result, the board has announced intentions to ‘undertake a comprehensive review of the business’ and ‘significant actions to reposition the business’.
Philip Green, Non-Executive Chairman of Carillion says: “Richard Howson has stepped down as Group Chief Executive and from the board with immediate effect.
“Keith Cochrane, previously our senior independent non-executive director, will take over as interim Group Chief Executive, while a search is underway for a new Group Chief Executive.
“We are fortunate to have had Keith as a non-executive member of our board as he has considerable plc CEO experience.
“Richard will stay with the group for up to one year to support the transition.”
He adds: “Despite making progress against the strategic priorities we set out in our 2016 results announcement in March, average net borrowing has increased above the level we expected.
“That means we will no longer be able to meet our target of reducing leverage for the full year.
“We have therefore concluded we must take immediate action to accelerate the reduction in average net borrowing and are announcing a comprehensive programme of measures to address that, aimed at generating significant cashflow in the short-term.
“In addition, we are also announcing that we are undertaking a thorough review of the business and the capital structure, and the options available to optimise value for the benefit of shareholders.
“We will update the market on the progress of the review at our interim results in September.”