Leighton blueprint to streamline business

By Sarah Ann McCay12 June 2014

Marcelino Fernández Verdes

Marcelino Fernández Verdes

Leighton Holdings has outlined a new strategic blueprint for its future business development, which will see the contractor establish a dedicated construction business.

Executive chairman and CEO Marcelino Fernández Verdes has outlined plans that aim to strengthen the balance sheet, streamline the operating model and improve project delivery.

According to Mr Fernández Verdes, Leighton will streamline its operating model by grouping similar activities to establish dedicated businesses focused on construction, mining, public-private partnerships (PPPs) and engineering.

“By reorganising these activities we will create economies of scale, thereby lowering our cost base and helping to improve our competitive advantage and create value for the benefit of all stakeholders.

“We will combine our existing PPP capabilities to create a focused industry-leading business. This new business will form a key component of our growth as we see numerous construction and investment opportunities in the large and expanding PPP markets in Australia and overseas,” said Mr Fernández Verdes.

“Similarly, we intend to combine our existing engineering skills, and further develop these capabilities to provide more innovative solutions for our clients. Promoting greater self-reliance on our own engineering skills will enhance our ability to mitigate and manage contract risk.

“We are focused on improving project delivery by further developing the entrepreneurial approach of our project managers including a greater focus on cash and cost control. This will be supported by the standardisation of our business processes and systems,” Mr Fernández Verdes added.

Leighton is also analysing options for its Services, Property and John Holland businesses including the potential divestment or introduction of new partners/investors to these businesses.

Leighton Holdings’ chairman, Bob Humphris, retired from his post earlier this month, and also stepped down from his role as non-executive director. He was replaced as executive chairman by Mr Fernández Verdes.

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