Chief operating officer Ian Tyler to take over the reins on 1 January after five-month handover period

Balfour Beatty chief executive Mike Welton has announced his retirement from the board after more than 20 years with the company and eight years as boss.

Welton, who was named chief executive of the year in the 2004 好色先生TV Awards, is to be replaced by chief operating officer Ian Tyler. At 44, Tyler is 14 years Welton鈥檚 junior. He has been at Balfour Beatty since 1996, when he joined as finance director from Hanson.

Tyler will take over on 1 January, allowing a five-month handover period. Welton said he had not decided his next career step. He said: 鈥淚 will carry on running the business until the end of the year. I just wanted to make sure the succession was going to happen smoothly.鈥�

Welton confirmed that Balfour Beatty鈥檚 recent acquisition of Skanska鈥檚 50% stake in Gammon, a Hong Kong contractor, contained a 鈥渘on-compete鈥� clause, as revealed in 好色先生TV (11 June, page 13). This means that Skanska, the world鈥檚 third largest contractor, is unable to operates in Gammon鈥檚 markets, including China, Hong Kong and Thailand, for three years.

Welton was speaking after Balfour Beatty announced a pre-tax profit of 拢61m for the six months to 26 June 2004, a rise of 45% on last year. Turnover also increased 14% to 拢1.9bn. The interim dividend rose 10% to 2.85p.

The contractor said that the good results in the first half of the year partly reflected the termination of rail contracts with Network Rail.

In a joint statement, chairman Sir David John and Welton said:

鈥淭his year, due to a number of settlements, most notably in UK rail maintenance, a higher proportion of our profits than normal will fall in the first half year.鈥�

Balfour Beatty said the strong figures reflected the successful integration of UK contractor Mansell, which it acquired in December 2003. Welton admitted that Balfour had had to make redundancies to ensure the smooth incorporation of the business.

The contractor has been active in the market for the past few months. It bought Skanska鈥檚 interest in Gammon and consultant Atkins鈥� 32.2% stake in Connect Roads, a PPP roads concessions vehicle.