Worley names new CEO, as Andrew Wood steps down

Worley’s chairman shrugs off 8pc fall in the share price after Andrew Wood’s unexpected decision to step down as CEO.

Worley’s Andrew Wood is stepping down.

Resources contractor Worley caught investors off guard after making the surprise decision to replace its long-serving chief executive just weeks before it hands down its interim earnings.

Chief executive Andrew Wood will step down on February 24 when its results are delivered, with the company’s current chief operating officer, Chris Ashton, taking over the top job.

Worley chairman John Grill said a process had been under way for several years to replace Mr Wood as part of extensive succession planning, which included canvassing external candidates.

However, one fund manager said the timing of Mr Wood’s exit rattled shareholders, with no prior signals that a management change was being considered.

“These unexpected CEO changes are rarely good news so it is significant in that regard,” Allan Gray managing director Simon Mawhinney told The Australian.

“As far as earnings go, they would have been compelled to flag any issues to the market so there is likely nothing untoward there. The big thing will be if their outlook is not as expected.”

Worley tumbled on the management change amid a volatile market, with its shares falling 8.5 per cent to $13.95.

$13.95 Worley closed down $1.29 q

Mr Grill, Worley’s third-largest shareholder, shrugged off the fall and said market jitters had probably contributed to the sell-off.

“There are a lot of factors out there in the market today and trying to separate the change in CEO from all the factors in the market is too hard for us to be doing at this stage,” Mr Grill said after the management announcement.

“It’s a very mobile time in markets around the world.”

Mr Mawhinney conceded that the company may have taken an extra whack due to broader nerves over the growing economic impact of the coronavirus.

“It’s one of those unfortunate things. On a day of dislocation and volatility, a little bit of bad news is dealt with quite savagely,” he said.

Mr Ashton, a 20-year veteran of the firm, has been responsible for integrating last year’s blockbuster $4.6bn takeover of Jacobs Engineering. He is only the company’s third chief executive after Mr Wood took on the top role in 2012 from Mr Grill, the company founder and now chairman.

The Jacobs deal has roughly doubled Worley’s market value, but critically it also handed the company a much broader revenue sweep less prone to the booms, busts and spending pullbacks that made the energy industry a difficult market to navigate.

Energy and chemicals now account for roughly even portions of Worley’s global earnings, with oil and gas at 47 per cent and chemicals at 43 per cent. Mr Ashton said the huge energy transition to lower carbon sources was among his immediate priorities.

The bushfire crisis this summer and the intensifying spotlight on more urgent climate change action had captured the world’s ­attention, according to the incoming Worley boss. “The rate at which we’re observing customers having to take action was picking up pace before the fires. What’s happened in Australia has got the attention of governments and customers across the world and they recognise the time to take action is now,” Mr Ashton said.

Improving relations with the company’s largest shareholder, Dar Group, would be a matter for the board. Dar was left smarting after Worley fended off plans last year for a co-operative pact between the companies.

“Dar is really a governance responsibility for the board so the interface to date between Worley and Dar is at the board level and not at the CEO level,” Mr Ashton said. “I’m going to focus on running the business.”