Shift comes as Australian parent confirms Bovis name will be dropped
Daniel Labbad, Lend Lease鈥檚 European chief executive, is positioning its UK construction business to tackle smaller projects in the absence of a market recovery.
The move comes as Lend Lease confirmed it is to drop the Bovis brand from its UK construction arm, as revealed in 黑洞社区 last month.
The move, which was due to be announced in Sydney yesterday alongside the company鈥檚 annual results, is part of a strategy that will spell the end for all individual branding across the Australian company鈥檚 global operations.
Labbad, head of Europe, the Middle East and Africa, is in the final stages of carrying out a strategic review of operations in the region, including the UK construction arm.
He said that following the review, the business would continue to target its 鈥渃ore areas鈥� of commercial, education, residential and waste, but would need to go for smaller projects.
He said: 鈥淭he size of contracts is going to be relatively smaller for some time, and so therefore we need to ensure the organisation, the overhead structure and our systems and processes are geared to smaller sized contracts.
鈥淪o moving from 拢200-拢300m contracts to 拢70m-拢110m and even lower than that.鈥�
He conceded that he had 鈥渘ot been happy with Bovis鈥� win rate rate over the last 18 months鈥�, and wanted it to improve.
Despite some significant wins, including the Scottish Arena and 拢150m North East Quadrant for British Land, the company has failed to make the cut on projects including the 拢370m Cheesegrater.
Labbad said: 鈥淲e know our partners hold us in a high regard and what I鈥檓 going to be focusing on is showing those partners that we can be trusted, we can deliver quality and when you work with us you get the best of the organisation.
鈥淭hat鈥檚 a key thing for us, because in the past we have lost parts of that.鈥�
However, although he said the business was 鈥渘ot perfect鈥�, he stressed: 鈥淚 like what I see, and the business is ready to move on.
鈥淭he market in the UK is big enough, even with the financial crisis, and when you look at our turnover relative to that there鈥檚 still a lot more we can be doing in the sector.鈥�
He confirmed that the company was still in consultation over potential redundancies with 150 employees on the Athletes鈥� Village project, and would not rule out further consultations.
He said: 鈥淚t鈥檚 very difficult to replace a 拢1bn project.
鈥淲e made some big cuts last year, and as to whether we need more - we鈥檒l be looking at that over the coming months. It depends how much work we win during that time.鈥�
Labbad said that the UK market was looking worse than he had hoped three months ago.
He said: 鈥淲e鈥檙e seeing some signs of life in the core commercial markets, but the banks still aren鈥檛 lending, and I think it鈥檚 going to be another 12-18 months before things improve.鈥�
Labbad on rebranding
We want to recapture a business that draws on its history but looks to the future. The renaming doesn鈥檛 take away from the history of the business, but it takes the opportunity to underline what we can offer.
The decision follows extensive research which showed that the market found our multiple branding confusing. What people want is a contractor that can deliver and a partner they can trust, with demonstrable balance sheet strength.
I understand that some developers may have issues with the Lend Lease name, but we are also having a lot of discussions about working together with developers, and are doing this already at Greenwich and Stratford.
I addressed Bovis鈥� governors club - which is fundamentally about friendship and camaraderie - a few weeks ago.
In that speech, I said those values won鈥檛 be lost on my watch. But it鈥檚 about getting the balance between that foundation and the need to adapt.
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