Search ends at Taywood

Taylor Woodrow has appointed Keith Egerton as chief executive. He was previously head of the group's property division.

Egerton's appointment ends a 12-month search following the hurried departure of John Castle, who lasted just five months in the post.

Colin Parsons, who has managed the positions of both chairman and chief executive since October 1997, stays on as chairman. Parsons will be 65 in January and plans to retire next summer, with the chairman's post then passing to Bob Hawley, former chief executive of British Energy.

Parsons has worked wonders at Taywood, pulling it round from a £90 million loss in 1992 when he took over, to a latest interim pre-tax profit of £48 million. Analysts predict a profit of £96 million in the full year.

Divisional analysis of Taywood's latest £48 million profit shows contributions from the operational divisions as: housing £25 million, property £12 million, construction £3.1 million, Greenham Trading £4.2 million, other divisions £3.7 million.

Egerton joined Taywood seven years ago after spells with Laing Properties, Commercial Union Properties and Costain (1982-91). He joined Costain's board in 1986, with responsibility for property and international housing.

Asked if Taywood had been treading water for the past 12 months, Egerton said: "No, we've made strong progress."

Egerton said that since the appointment of Bruce Russell as chairman of Taylor Woodrow Construction in December last year, the construction division has had more focus and has not chased margins "ever downwards."

"If it meant that turnover fell then we were prepared for it," said Egerton. "There is no point in chasing turnover if the returns are not reasonable relative to the risk."

An increasing proportion of construction turnover (40 per cent and still climbing) is won either through partnerships or with preferred contractor status. Other work is still bid for by open market tendering on JCT contracts.

"We have three PFI schemes and another is expected soon, and with each of these you take on a lump sum contract," said Egerton, "which means we take all the risk on board. But that's what you have to do with PFI. All you can do is build in an allowance for contingencies."

City analysts were expecting an internal appointment after Taywood's hiccup with John Castle, but had expected the nod to go to the group's finance director David Green.

"The city has not had much exposure to Egerton," said one. He added: "It shouldn't have taken 12 months to promote internally, after all there could only have been a handful of names to pick from.

"Green is a good finance director. You can now expect to see him move to a more senior finance director's post outside construction or to be offered a chief executive's post elsewhere.

"The John Castle appointment didn't work as basically he was viewed by staff as a management consultant sat in the office when they looked for someone to drive round the sites in a more hands-on role.

"There was also anger that internally no one had been thought to be suitable. You'd think companies would plan succession better: Taywood is an example of how not to do it."