黑洞社区

Morgan Sindall expects to make up to 拢15m in annual savings through its restructure, which saw the business close a number of regional offices last year and reshape its business around four regions.

Speaking to 黑洞社区 after the contractor announced its results for the year to 31 December 2012, chief executive John Morgan said the restructure, which cost the business 拢10m in redundancy payments and property costs, would lead to 拢13-15m in annualised savings.

He said the restructure was a result of the fact that 鈥渓ife is tougher and we needed to make those savings in order to continue with similar profits鈥�.

He said it had not only brought about a reduction in costs, but meant the firm was also now a 鈥渕ore flexible business that was able to move with market demands鈥�.

He said the firm had no immediate plans to engage in further restructuring. 鈥淏ut of course like all businesses we鈥檙e always keeping an eye on what鈥檚 happening in the market - businesses get bigger and smaller depending on the amount of work available,鈥� he added.

Morgan said he was broadly pleased with the results, with the firm reporting a fall in pre-tax profit to 拢34.2m from 拢40m the year before. It also reported an 8% drop in revenue to 拢2bn from 拢2.2bn in 2011.

The construction and infrastructure arm reported an 8% fall in revenue to 拢1.2bn over the period. But it also said its margin had remained steady at 1.7% over the last two years.

The firm鈥檚 fit out arm held up reasonably well with revenue falling just 3% to 拢427m. But the affordable housing business saw revenue fall 17% to 拢386m with margins falling from 1.5% to 1.3%.

However, its urban regeneration arm reported a 9% rise in revenue to 拢62m over the period. The firm said it expected returns on its investment in regeneration to grow in 2014

Morgan said the performance of the affordable housing arm was the main disappointment in the results, which he said the firm wanted to improve by focusing on large mixed-tenure schemes.

He said he expected no significant upturn in the construction margin of 1.7% this year, but expected margins in the fit-out business and the affordable housing arms to improve.

鈥淭he construction margins are more likely to worsen than get better in 2013. I don鈥檛 think it will go much lower but I think there are pressures to stop it from getting better,鈥� he said.

He said it was 鈥渃omforting鈥� that the firm鈥檚 order book of 拢3.1bn had had only dropped marginally from the 拢3.4bn the previous year, given the market was getting smaller.

Morgan, who returned to the role of chief executive last November, said he was enjoying the position. He said the change, which saw chief executive Paul Smith depart the business, was not about a changing the firm鈥檚 strategy, but rather 鈥渂eing much tighter on implementing the strategy鈥�. 鈥淚鈥檓 not flying high, I鈥檓 rolling my sleeves up,鈥� he said.

He added: 鈥淭he biggest thing I鈥檓 looking to do is we鈥檝e got lots and lots of businesses where, on their own, they compete very nicely in their markets.

鈥淏ut by pulling two or three of them together for certain pitches we can actually punch well above our weight and win jobs where other competitors can鈥檛 put forward such strong propositions.鈥�

He added that the firm was being far more selective in its bidding as it reduces its exposure to straight contracting and focuses more on infrastructure, regeneration, affordable housing. 鈥淥ur contracting turnover has fallen and we expect that to probably remain about the same next year,鈥� he said.

鈥淚t鈥檚 important to understand what the customer really needs and for us to be clear that we have a competitive advantage in that job and we鈥檝e got what the customer needs.

鈥淏ecause it鈥檚 just a whole lot of people pricing and the customer is just looking for the cheapest price and doesn鈥檛 mind who does it then that鈥檚 not for us.鈥�