黑洞社区

ISG chief executive Paul Cossell has admitted it could be 10 years before the firm gets close to hitting margins of 5%.

Cossell has already said contractors should be pushing to hit that figure but he told 黑洞社区 the firm was some way off the mark after posting margins of 1.7% in 2018.

The firm expects the number to be over 2% for this year but Cossell added: 鈥淲e need to be aiming for 5%. I like to think we could do 5% in a decade but it needs a real shift in our sector [to achieve that].

鈥淲e鈥檙e focussed on growing margins through being more efficient and [more] negotiated work.鈥�

Cossell said the firm spent 拢15m on R&D last year which would have pushed margins above the 2% mark in 2018 but he admitted: 鈥淲e鈥檙e not where we want to be [on margins].鈥�

Last month marked the third anniversary ISG delisted from the London Stock Exchange after a takeover battle which saw US private equity firm Cathexis snap up the firm for 拢85m.

Listed firms Kier and Galliford Try both had to launch rights issues last year while Interserve delisted from the stock exchange last month after a refinancing plan was voted down by shareholders.

Cossell, who took over from David Lawther in May 2016, said the difference between a plc and private ownership was marked.

鈥淵ou get owners that take a long-term view and invest in the business. I鈥檓 dealing with a handful of people but with a plc you have multiple stakeholders with short-term wants.鈥�

ISG carried out more fit-out work than construction jobs in the UK last year with schemes such as fitting out Goldman Sachs鈥� new office in the City of London helping push revenue at fit-out up by close to half to 拢710m. 鈥淭he market was very hot last year, particularly in London,鈥� Cossell said.

The firm, which last year completed work to revamp the grade I listed Temperate House at London鈥檚 Kew Gardens, is also looking at work for the new Apple office at Battersea power station as well the Google headquarters building Lendlease is working on at King鈥檚 Cross.

But the firm is now carrying out around 拢100m of work on schemes between 10,000 and 50,000 sq ft through a business called Agility. 鈥淲e鈥檝e massively grown the small to medium end of fit-out,鈥� Cossell added.

Revenue from its construction business edged up 3% to 拢506m.

Cossell said the firm has written Brexit clauses into its contracts but admitted the issue was beginning to drain. 鈥淭he obsession with Brexit is paralysing the UK,鈥� he said. 鈥淚t鈥檚 dominating everything.鈥�

Turnover at ISG in the year to December 2018 was up one third to 拢2.2bn while pre-tax profit tripled to 拢27.4m.