Contractor鈥檚 shares fall on the news as firm鈥檚 chief executive leaves 鈥榳ith immediate effect鈥�
May Gurney chief executive Phllip Fellowes-Prynne is leaving the company 鈥渨ith immediate effect鈥�, after the listed-contractor issued a profit warning today.
In a statement to the City, the contractor said Fellowes-Prynne had left the company by 鈥渕utual consent鈥� and would be replaced on an interim basis by current non-executive director Willie MacDiarmid, as the firm searches for a permanent replacement.
May Gurney issued a trading update today warning that it will 鈥渟ignificantly under-perform its original expectations for the current year鈥�.
Real-time Share Price
Shares in May Gurney fell more than 40% on the news to just over 130p, wiping almost 拢66m off the value of the company. The share price was down 43% by lunchtime.
The warning came as it emerged that May Gurney has extended payment terms to 60 days from 45 days for materials suppliers on its contracts, with the contractor also planning to cut its 4,000-strong supply chain.
The firm said it faced some serious operational issues within two long-term MaGos waste and recycling contracts, with the firm failing to meet targeted margins.
It added that the firm was experiencing 鈥渟ignificant exiting costs鈥� as it ran down its Facilities Services division and had set-aside a 拢10m one-off charge to cover the costs.
It said it also had 鈥渙n-going difficulties鈥� within its Scottish Utilities business as Scotia Gas Networks reduces outsourcing.
鈥淭hese factors 鈥� have led the Board to the conclusion that the Group will significantly under-perform its original expectations for the current year,鈥� the firm said.
Chairman Baroness Ford said: 鈥淚n taking this action today, the Board has moved swiftly to deal with the specific operational problems that have emerged over the last few months.
鈥淲e are fortunate to have secured the services of Willie MacDiarmid to lead the business on an interim basis.
鈥淗is depth of operational experience will be invaluable over the next period as we move to secure a permanent CEO.鈥�
The firm said it the underlying performance of the rest of the business was 鈥渟ound鈥� and it had an order book of 拢1.5bn, with 拢86m of new work and 拢50m of contract extensions won since the year-end.
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