黑洞社区

Sir Robert McAlpine is planning to more than double its civil engineering and infrastructure business in the coming years to take advantage of the government鈥檚 focus on construction and its levelling-up agenda.

The firm is best known as a building contractor and has been behind some of the most high-profile building schemes in the past 15 years including Arsenal鈥檚 Emirates stadium, the main stadium for the 2012 Olympic Games and the redevelopment of the Broadgate complex in the City of London.

But it is now looking to target much more civils and infrastructure work in the next five years and its chief executive Paul Hamer told 黑洞社区: 鈥淭here鈥檚 some very big established players [in civils] but the market is big enough to accommodate McAlpine with some of the skills we鈥檝e got.鈥�

Hamer, who was speaking as the firm said the costs of the pandemic sent it tumbling to a 拢26.8m pre-tax loss on turnover down 19% to 拢819.5m in the year to October 2020, added the government鈥檚 focus on construction to lead the country鈥檚 economic recovery from the covid-19 pandemic had helped the firm make up its mind to look at more jobs away from its traditional building core.

鈥淚鈥檓 really pleased the way government has prioritised construction,鈥� he said. 鈥淚n the last recession, construction was the first in and the last out. The focus on construction was long overdue.鈥�

The firm鈥檚 current turnover from civils and infrastructure work is between 拢120m and 拢150m, around 18% of its business, but Hamer said he wants this to eventually be between 拢300m and 拢400m moving it up to more than 30% of turnover.

鈥淚t鈥檚 pretty clear we would see [government] investment in this [civils and infrastructure] sector and [for us] being mostly building and mostly private clients is not a sustainable place to be for a 152-year-old firm. Infrastructure is public sector, it鈥檚 long-term and it鈥檚 more benign in terms of contracting terms.鈥�

McAlpine鈥檚 core clients in the sector are HS2, where it is part of the Align joint venture carrying out a 拢1.6bn tunnels and crossing contract for the railway in the Chilterns, and Highways England, with its jobs including work at junction 19 of the M6 as well as upgrading parts of the M56.

The firm is looking to target more work from both with Hamer confirming it was likely to bid the scheme to build the HS2 Interchange station at Solihull which is worth around 拢200m.

Hamer said he expected between a quarter and one third of the firm鈥檚 profit coming from the civils and infrastructure market with the firm also looking at new clients including Network Rail and more nuclear work.

Hamer spent five years at the British Nuclear Group, where he was responsible for decommissioning work at the estate鈥檚 fleet of nuclear reactors, and he said the firm鈥檚 return to nuclear, which it specialised in several decades ago, would focus on the civils side of schemes.

But Hamer said McAlpine was still focussing on its core building and commercial work, adding that it was talking to British Land about its schemes at 1 Broadgate and 2-3 Finsbury Avenue in the City, worth around a combined 拢600m, while it remains one of two bidders for Derwent鈥檚 office-led, mixed-use scheme at Baker Street which is worth around 拢120m.

鈥淲e鈥檝e got a very strong pipeline of commercial opportunities. The UK is still seen as a top investment destination as well,鈥� he added.

He said the office market remained strong and added: 鈥淲hen the pandemic hit, there was a thought that people wouldn鈥檛 return to work. We disagreed with that and it鈥檚 not what we鈥檙e seeing.

鈥淒evelopers want adaptable, flexible floorspace and they want it to be net zero. They want to future-proof buildings and a huge element of the market is refurbishment [to do that].鈥�

Hamer said the firm, which has 65 sites in the UK, racked up a 拢23m bill dealing with covid last year, including the money it spent on adapting to new Site Operating Procedures as well as the extra costs of reduced productivity and the knock-on impact of jobs taking longer than planned with it having to pick up the tab for the delays.

The firm claimed 拢7.3m from the government鈥檚 Coronavirus Job Retention Scheme initiative, having furloughed over 1,000 people, the equivalent of 52% of its staff numbers, at the height of the first lockdown. Hamer said less than 1% of staff remain on the initiative, mainly those who have been forced to shield for health reasons.

It said its year-end cash position was 拢96.7m, up from 拢94m, with the firm adding that it expected to return to profit this year with turnover back up to pre-pandemic levels.