- Macquarie Capital considering options for BGC Contracting
- Plans to divest core building materials and construction businesses deferred for foreseeable future
- Search underway for CEO to implement independent executive structure for ongoing core business
- Staged sale of non-core properties
The BGC (Australia) Pty Ltd (BGC) Board advises that it has commenced exploring options for the Group’s national contract-mining, maintenance and civil-construction business, BGC Contracting.
BGC Chairman Neil Hamilton said the process will be led by its corporate advisor, Macquarie Capital, which in conjunction with the Group’s management has commenced exploring a number of strategic options for BGC Contracting including a possible sale, divestment of parts of the business and/or alternate operating models or structures.
“While this review is ongoing it will be business as usual for our customers and our staff, and the focus of BGC Contracting will continue to be on delivering excellent services for our customers,” he said.
“BGC Contracting is one of Australia’s leading independent contractors, with a workforce of 2,000 delivering a current contract pipeline valued in excess of $1.7 billion across the country. Our workforce remains our most valuable asset and we are confident that all options being explored are strengthened by the value that our people bring to our customers.”
Core Building Materials and Construction Businesses
Mr Hamilton said that having considered the current challenging trading environment, including historically-low levels of housing starts in Western Australia, the Board had determined that market conditions are not conducive to any near-term plan to realise the value of the Group’s core building materials and construction businesses.
“We have identified a number of strategic initiatives which can be pursued in the short-term which will materially enhance the business performance and valuation. Any divestment plan for these businesses has therefore been deferred for the foreseeable future,” Mr Hamilton said.
“Importantly, BGC Group is well positioned to emerge from this cycle stronger than ever, with a strong balance sheet, pre-eminent market position and best-in-class manufacturing and operating assets.”
Mr Hamilton reiterated that BGC’s shareholders remained committed to supporting and investing in the Group’s core business, ensuring its market leading brands are well positioned beyond the current cycle.
“We are working to optimise our performance during the current market environment and to best position our businesses to benefit from the anticipated future improvement in end-markets. We have commenced a detailed strategic planning review with the objective of placing the BGC Group in an optimal position to use its vertically-integrated operating model to leverage growth and profitability upon the return of more normal operating conditions,” he said.
“As we move forward in this direction, the Board, with the support of the shareholders, have made the decision that now is the right time to introduce an independent executive structure for BGC, with the appointment of a CEO to manage the ongoing operations of the Group.”
With immediate effect, Alan Tate, Group CFO will assume the role of acting CEO, with Messrs Sam and Andrew Buckeridge and Julian Ambrose relinquishing their respective day-to-day executive responsibilities.
Together with Mr Andrew Teo, they will remain as non-executive directors alongside recent Board appointees Neil Hamilton, Jenny Seabrook and Matt Bungey.
The Board has instituted a search for a CEO and will announce this appointment in due course.
Non-core Property Assets
The Board has also initiated a staged process to divest a number of non-core properties which are surplus to the needs of the Group, this process is likely to be completed over a number of years.
“The Board is following an orderly and strategic process to consider the various options to allow the Buckeridge family to realise their investment in the Group, and these are the next steps in that process,” Mr Hamilton said.
“This is a significant undertaking and will take time. In the interim, our focus remains on continuing to win work across the Group, and safely meeting and exceeding the expectations of our customers.”