Chief executive’s departure is followed by heavy loss on delayed £47m Nottingham development
Shepherd Construction is set to lose up to £15m on a delayed £47m scheme in Nottingham, it has emerged in the same week as chief executive Vaughan Burnand made a sudden departure from the firm.
Shepherd announced on Monday that it was replacing Burnand, who joined the firm in 1992 and has been chief executive since 2000. His role will be taken by Allan McDougall, the chief executive of Shepherd’s Engineering Services division.
The Trinity Square project, which was to provide accommodation for students at Nottingham Trent university, was built for developer Helical Bar. The final phase was handed over this summer; it was originally scheduled for completion in October 2007. Shepherd will take a hit of £10-15m on the job when it announces its results later this year.
The scheme included 700 accommodation units and 235,000 ft2 of retail and leisure space.
A source close to the project said: “It was a bad job for Shepherd. It’s handed over now, but it was late and there will be a hit.”
In its last published results, to 30 June 2007, Shepherd’s parent company, Shepherd Group, reported a slight dip in profit to £42.2m from £42.7m in 2006. Profit at the construction division rose from £1.9m to £6.1m, off the back of the sale of a PFI equity stake, although turnover dropped from £367m to £340m.
It was a bad job for Shepherd. It’s handed over now, but there will be a hit source close to the project.
Burnand, a popular figure in the industry, is also well known for his work at the Major Contractors Group, where he chaired the committee on safety.
A source close to Burnand said that he was taking a holiday before focusing on his next move.
He is the latest in a number of top-level departures from the family-owned Yorkshire firm.
In 2002 chairman Paul Shepherd was asked to resign after the construction division made a £2m loss and racked up £19m of exceptional charges. He issued a High Court writ and began an employment tribunal claim against the company, but the writ was dropped in 2004.
A spokesperson for Shepherd Construction said: “Vaughan Burnand leaves with our best wishes for his future.”
More on Burnand and Shepherd at www.building.co.uk/archive