Describing the group’s current market position as “the envy of our peers”, Humphris explained that Leighton was progressing well in terms of delivering improved performance and sustainable returns to shareholders.
“We are establishing a solid platform for improving future profitability,” he said.
“We are working to identify and appoint four new independent directors with the skills and experience to contribute to the further development of Leighton. Our focus is on the quality of our directors. We expect to be in a position to announce appointments before the end of June.”
The search for these directors began in late march this year, following three shock Leighton resignations including that of former chairman Stephen Johns.
Johns and non-executive directors Wayne Osborn and Ian Macfarlane resigned due to a perceived breakdown in relations with major German shareholder Hochtief, which they accused of no longer supporting an independent board at Leighton. This was a claim strongly denied by Hochtief and Leighton which, in the aftermath of the resignations, told the market that the governance arrangements between them guaranteed that the company operated under an independent board and management.
Leighton chief executive officer Hamish Tyrwhitt furthered this statement recently, saying that the company’s first-quarter results indicated it was on track to deliver this year’s forecast.
“Leighton’s strength lies in its size, diversity and the international reach of our portfolio,” Tyrwhitt said.
Continuing its ‘stabilise, rebase and grow’ strategy, Tyrwhitt said Leighton’s priorities were to improve profitability, strengthen the balance sheet and focus on capital management. Key initiatives such as the establishment of the Centres of Excellence were crucial to achieving this.
“The Centres of Excellence will house a set of specialist competencies that we have recognised as an important source of value creation,” Tyrwhitt said.
“In essence, we are looking at what we do best and what cannot easily be replicated by our competitors, in order to frame where and how we grow.”
Another opportunity, according to Tyrwhitt, lies in the development of a broader range of funding for infrastructure.
“Governments cannot fund this demand alone and the private sector needs to play an increasing role.
“With innovative financing and delivery models, governments will be able to access funding sources to help meet the estimated US$60 trillion in global infrastructure investment required by 2030. This will be a great opportunity for Leighton within its geographic footprint.”
Tyrwhitt said Leighton was uniquely placed as the only construction company with a full footprint across Asia. He said it would work hard to protect this strong position and would expand into regions including South East Asia, India and Sub-Saharan Africa.
“It is clear that we need to move our focus from an Australian-centric approach to one where we export our skills to markets where our services are valued and where we can add value,” Tyrwhitt said.
“By delivering excellence on the global stage, we can position the group for relevance and resilience.”
