Contractor to restructure away from design-and-build work, and aims to reach 拢500m in three years

Allan McDougall, chief executive of Shepherd Construction, plans to cut turnover 40% to create a more profitable company focused on partnership schemes rather than design-and-build contracting.

The decision follows a drop in turnover at the firm from 拢329m to 拢326m in the year to 30 June 2009, which it revealed this week. McDougall said his planned restructuring would further reduce turnover towards 拢200m in 2009/10.

The company, which has reduced its staff levels by 180 to 750, made a loss of 拢10.5m in 2009; this included restructuring costs and a 拢12.4m writedown after the collapse of the 拢200m Trinity Walk scheme in Wakefield.

McDougall said the business had been reorganised around winning work on frameworks and long-term partnering agreements, but admitted the planned reduction in turnover was partly a reflection of the state of the market. The firm is aiming to return to 拢500m by 2012/13.

He said: 鈥淲e felt we needed to change direction. We wanted more of our work to be on frameworks and partnerships.

鈥淲e want more repeat clients. But it鈥檚 also about trying to move away from a confrontational construction relationship.鈥�

The change will be a sharp turnaround from Shepherd鈥檚 traditional design-and-build business. In the past year it has won places on three frameworks, including Partnerships for Schools鈥� academies framework in the North and Midlands, the NOMS Alliance prisons framework and York鈥檚 primary capital programme for primary schools.

McDougall said the firm would be able to announce 拢180m of business in the next few weeks, on top of the restart of the Trinity Walk scheme, which Shepherd has invested in to help it get off the ground.

This week Shepherd Group, the family-owned parent company, announced a loss of 拢1.5m on turnover of 拢701m.

Downloads

Topics