黑洞社区

Fast-growing small contractor O鈥橞rien Contractors is forecasting it will nearly double pre-tax profit and boost revenue by 40% in this financial year.

The firm expects to turn over 拢24.5m in 2014/15 and rack up a pre-tax profit of 拢2.6m.

鈥淚t may seem like an overnight success, but to us it鈥檚 not felt like that,鈥� says Peter O鈥橞rien, managing director of O鈥橞rien Contractors.

The Midlands-based firm has grown revenue 68% over five years to post revenue of 拢17.5m in its last financial year, with pre-tax profit leaping 20-fold to 拢1.5m over the same period.

After contracting by 40% in just one year in the throes of the recession, in 2008-09, the firm has since recovered quickly and raced past its pre-recession revenue peak last year. These positive financials helped the family-owned firm win the Contractor of the Year under 拢300m turnover at the 2014 黑洞社区 Awards.

But O鈥橞rien (pictured inset) prefers to characterise the firm鈥檚 success as 鈥渕ethodical鈥� rather than 鈥渙vernight鈥�.

鈥淚t has been strategic, planned and the culmination of years of improvement through hard work,鈥� he says.

Reinvention

As the recession took hold, O鈥橞rien embarked on a strategy to reinvent the business, turning it from a groundworks specialist to a principal contractor offering everything needed for a civil engineering project. It also upped investment in training and skills 鈥渞ather than cutting it鈥�, retained its directly-employed labour force and made a big marketing push to reach new clients, O鈥橞rien explains.

Leamington Spa-based O鈥橞rien was founded in 1958 by Tom O鈥橞rien and is now owned by the second generation of the O鈥橞rien family, brothers Peter and Mick O鈥橞rien, with Stuart Chamberlain and Phil Griffiths becoming shareholding directors in 2012.

It operates across the Midlands, taking on jobs valued between 拢250,000 and 拢10m, and offers pre-construction services, design and build, sport pitch construction, traditional contracting and plant hire.

The firm primarily works in education, leisure, commercial, manufacturing and infrastructure.

O鈥橞rien鈥檚 work as a principal contractor now makes up 30-40% of the firm鈥檚 turnover, according to O鈥橞rien. This work is typically design and build infrastructure and public realm improvement jobs.

鈥淲e viewed the recession as an opportunity and planned for the subsequent upturn,鈥� O鈥橞rien says. 鈥淚n a downturn, clients are less active, they are more receptive to changes in their supply chain as they are more focused on value.

鈥淲e found out what organisations didn鈥檛 like about their supply chains and we attained new clients that we have developed strong and long-term relationships with. In many ways, the recession was good for us.鈥�

The firm now deliberately targets 鈥渓arger value contracts鈥� and is also an advocate of 鈥渆arly contractor involvement鈥�.

鈥淟ong-term relationships bring trust and collaboration which is essential if project objectives are to be achieved,鈥� O鈥橞rien says.

Despite its diversification into principal contracting in recent years, traditional subcontracting remains 50-60% of the business, and its largest contracts remain in this area. These include an 拢11msubcontract on John Sisk & Son鈥檚 拢200m coffee manufacturing centre for Nestle in Derbyshire and a 拢6m subcontract for Morgan Sindall鈥檚 150,000ft2 Marks & Spencer store at Longbridge. Meanwhile, the firm鈥檚 specialist sport pitch construction division generates 10% of turnover.

Local investment

O鈥橞rien has invested more than 拢4m in training, plant, equipment and technology in the past four years, according to O鈥橞rien.

He says the firm carries out most of its work using directly employed workers, rather than subcontracted labour. 鈥淔or us, it鈥檚 all about continual improvement,鈥� he says. 鈥淭o be a leader in your field, we believe you should focus on your core competencies and you need the best workforce.鈥�

He鈥檚 bullish about prospects for the Midlands market, and particularly its manufacturing sector. He says: 鈥淭he Midlands market is looking buoyant. There seems to be more confidence, we are securing more high-value contracts and receiving far more live jobs than tenders to price.鈥�

O鈥橞rien is not tempted to join the stampede of regional contractors to London. 鈥淲e don鈥檛 need to go into London where we don鈥檛 have the relationships,鈥� he says. 鈥淵ou need those local relationships to get the best service, the best procurement deals and innovation through suppliers. We want to be the best SME in the Midlands.鈥�