Keir Group splits top jobs as profits rise

Keir Group announced yesterday that it would separate the roles of chairman and chief executive in a move that complies with the combined code on corporate governance.

However, the construction company's decision to make Colin Busby its new chairman fails to adopt the recommendations of the Higgs review as Mr Busby has held the joint role for 11 years. The changes mean Mr Busby will remain as executive chairman, with John Dodds taking over as chief executive from May.

The review by Derek Higgs recommends that, in order to meet the test of independence, a chief executive should not become chairman of the same company.

Deena Mattar, finance director of Kier Group, said: "We've had a succession in place for several years now. The timing with the Higgs report was coincidental."

Stuart Bell, from the corporate governance advisory body PIRC, said: "If you have a senior executive remaining as executive chairman there is always a suspicion that the chairman will be calling the shots."

The announcement came as the company posted first-half results that saw its turnover rise 4.5 per cent to £723.6m. Pre-tax profits rose to £11.8m, from £9.4m in the same period last year.

Kier said turnover at its homes division was up 40 per cent with almost a third more orders in place at the end of February than for the same time last year, citing low interest rates, under supply and high demand as reasons.

However, operating profits for the group's construction and service sector was marginally down from £5.7m to £5.5m. Negotiations to finalise a £640m buildings maintenance contract between Kier's support services business and Sheffield City Council are due to conclude in April. Kier shares closed up 4.5p at 420p.