Verster, who has been acting in the position since the sudden departure of Roger Jardine in August last year, will for the time being retain the group’s purse as well, until a new financial director is appointed.
Jardine’s departure raised some eyebrows when he resigned in the middle of the month, and left with less than a month’s notice. This was just before the group’s annual financial results were released.
He argued that Aveng’s settlement of R307m with the Competition Commission was the end of an era and said it was time to move on. However, Olof Bergh analyst at Sanlam Private Investments said at the time that there might have been pressure on Jardine because of consistent under-performance by the group.
Jardine was appointed five years earlier and came from the media industry where he headed up the Kagiso group. He has returned to this love and was appointed CEO of Primedia last month. As a scientist and former head of the Nuclear Energy Corporation he brought a background in nuclear energy to Aveng.
Most big construction companies have tried to position themselves to benefit from government plans to embark on a nu-clear programme.
However, Jardine did not have experience in the construction industry which has its own culture and dynamics and where longstanding relationships are built at the junior engineer level. Shortly after his departure Aveng announced an increase of 27% in revenue for the 2013 financial year with a 3% increase in headline earnings per share.
Construction and engineering in South Africa and Africa had a horrific year that ended with an operating loss of R914m and a clutch of seriously problematic contracts.
In November chairman Angus Band told shareholders at the group’s AGM that the Construction & Engineering SA and Africa segment was still getting its house in order and labour unrest was not helping. One of the group’s major headaches, the Queensland Curtis Liquid Natural Gas Pipeline Project (QCLNG) in Australia was nearing completion, but claims relating to the project were still being resolved and held risk.
In January Aveng updated the market about QCLNC, saying the client was satisfied with the delivery of the project, but repeating that the claims remain a risk. Aveng and its joint venture partner lost the first part of the arbitration and submitted an appeal against this decision last month. The remaining claims are “in both number and monetary value” considerably larger than those in the initial award, Aveng said.
Aveng is announcing its interim results on February 25 and it will only then be clear whether it is starting to get a grip on its problems.
The picture that unfolds will indicate what has been done since Verster took the helm in September and whether there are any early signs of its success or not.
Verster was financial director for the past three years. He was previously with ArcelorMittal in various senior management positions before being appointed as CFO.
While all the other big construction groups are headed by men with an engineering background, Verster is a financial man.
He holds a B.Com degree from the North West University, an MBL from Unisa and attended an executive management programme at the University of Virginia in the US.