AVENG CEO Sean Flanagan, who has led the construction, infrastructure and contract mining group back to profitability through a massive restructuring, is stepping down.
“The company will now turn to its next phase of achieving sustainable, profitable growth over the coming years. With the next phase of growth in mind, Sean has elected to retire as CEO from 1 March 2024, paving the way for a new CEO to own and deliver our long-term strategy,” the group said in an announcement of board changes yesterday.
Aveng announced a strategy in February 2018 to simplify its business, de-risk its balance sheet and reduce its debt. This required it to reduce from 23 business units to five business units, and turn around and dispose of non-core assets to allow it to focus on the core assets of McConnell Dowell and Moolmans.
Aveng’s share price increased 1.6% to R15.97 yesterday morning, although the price is well down from R34.06 a year ago.
Scott Cummins, CEO of Aveng's largest subsidiary, the Australia-based McConnell Dowell, will join the board as an executive director on November 22, 2023 and assume the role of group CEO from March 1, 2024.
“Sean Flanagan … has successfully led Aveng through a difficult period to deliver the strategy of disposing of non-core businesses, turning around core businesses, settling the legacy debt and de-risking the balance sheet,” the board said in a statement.
They said succession planning for key leadership roles had been considered by the remuneration and nomination committee over the course of the past 18 months as the company had transitioned through its restructuring to a smaller, focused and more sustainably profitable, engineering-led, infrastructure, construction and mining contractor.
Cummins would work with Flanagan until March 1, 2024 and particularly as the company completes and reports on its interim results.
Thereafter Flanagan would remain on the board as a non-independent non-executive director and serve as a member on the risk, tender risk and safety, health and environment committees.
Cummins, a civil engineer who holds an MBA from Strathclyde University in Glasgow, has a career that spans some 38 years as a contractor in engineering and construction, oil and gas and infrastructure industries, and he has held global and regional executive roles in Australia, Asia, the Middle East and Europe.
He joined Aveng in 2015 and was instrumental in leading McConnell Dowell through a major strategic and operational change, including turning the business around, closing out legacy matters and significantly growing the business from its contracted size.
Group finance director Adrian Macartney would continue in his role, but would relocate to Australia from Johannesburg from January 2024 in line with a long-term strategy to move the epicentre of the group to Australia.
“The board wishes to thank Sean for his contribution to Aveng, particularly over the last five years. Sean agreed to move to an executive role from 1 February 2019 for an initial two-year period. He has led Aveng with energy and passion to deliver the strategy during particularly challenging financial times and through the global Covid-19 pandemic,” the board said.
Aveng expects to release interim results on December 31.
At its last year to end-June 2023, Aveng said it was well positioned and equipped to restore itself to sustainable, profitable growth. The McConnell Dowell and Moolmans businesses were expected to return to profitability and generate positive operational cash flow.
“The group enters the 2024 financial year in a strong position, with combined work in hand amounting to R52.2 billion. This supports 100% of next year’s expected revenue of R32bn.”
In April, Aveng announced the sale of Trident Steel for R1.2bn, the last major non-core assets that needed to be disposed of in the restructuring.
BUSINESS REPORT