Heads roll after Heijmans warning

19 May 2008

Heijmans' executive chairman, Guus Hoefsloot has announced his resignation following a profits warning. Van Herk Groep, which controls some 10% of voting rights in the Dutch contractor has also called for the resignation of the Supervisory Board's chairman Joep Brentjens.

The fall-out between Van Herk and Heijmans' management began at the contractors' 9 April AGM, when Van Herk and other shareholders voted against discharging the Executive Board and Supervisory Board. According to a statement by Van Herk, this action was due to doubts it had in Heijmans executive board, following losses in the Construction Division in 2006 and 2007. It also said it believed these losses indicated the Supervisory Board had fallen short in its duties.

Trouble flared again on 15 May, when Heijmans' revised down its post-tax profit forecast for the year from € 56 million - level with 2007 - to € 50 million, following "Disappointing results during the first quarter."

Among the problems outlined were a slower than expected recovery for its domestic Building Division, a slow residential market in the Netherlands impacting on the Property Development Division and poor prices levels for the Infrastructure Division. Heijmans also said operating profits overseas, in Belgium, Germany and the UK, were behind 2007 levels.

The announcement of this poor outlook for the year was accompanied by the news that Mr Hoefsloot would be stepping down as chairman of the Executive Board, effective 16 June. His duties will be divided between current Executive Board members Jacques van den Hoven and Dick van der Kroft as an interim measure.

Following the profits warning, Van Herk Group also called for the resignation of Mr Brentjens. While Heijmans dismissed this, it said in a statement it was considering calling a special general meeting of shareholders.

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