Broad horizons

“We’ll certainly be in the £500 million court.”

Mark Andrews doesn’t hesitate when prompted for a forecast on this year’s financial results – a marked increase on last year’s £467 million. But then, Mark Andrews is hardly the hesitant type.

Reclining back in his chair, he is poised, imperturbable, secure in his own rhetoric. Something tells me he’s done this before.

When headhunters saw what Andrews had achieved during his three-year stint as chief executive of Pirelli Cables and Systems North America, and previous roles with Balfour Beatty, they knew they’d found the man to revamp old-school m&e firm NG Bailey.

It was back in 1990 when Noel Bailey began to search for fresh, trailblazing new chief execs outside the family. “When it comes to management it’s about getting the right person for the job, whatever their name,” says Andrews, with easy confidence.

He implies, however, that his non-kin predecessors simply weren’t up to the challenge. “During that period, from the early 1990s through to the early 2000s, there wasn’t a lot going on strategically within the NG Bailey business.”

Andrews took over the firm at the beginning of 2004. He and his wife had always intended to wave goodbye to their life with Pirelli in South Carolina once their son reached tertiary education, so the timing was ideal. But it was more than sheer convenience that attracted him. Bailey’s profit growth was slowing and the business lacked direction. It was the drive to turn things around that fuelled Andrews.

“The board determined that the firm needed a bit of a shake-up. Some of the divisions weren’t performing well. Bailey Telecom had lost more than £3 million a year for the three years before I got there. It had got diverted into markets that it shouldn’t have been in and needed a complete rethink.

“For me, that's what the brief was about. I wouldn’t have been interested in taking the job if it had just been a case of ‘crank the handle and sign the expense reports’.”

Six months after Andrews took the helm, the firm acquired ICT systems infrastructure company Teswaine. “We merged it with Telecom to form Bailey Teswaine and we now have what is proving to be a real powerhouse business. We’ve become the largest installer of structured cabling in the country in terms of market share. And we used that as a platform from which to develop a series of other services in the telecommunications ICT arena.”

Information technology infrastructure security business S2S is the latest addition to Teswaine. The company’s expertise in security, unified communications and identity management will provide a welcome boost to NG Bailey’s managed services portfolio.

“At the moment, Teswaine can put in structured cabling, phones and computer systems. But what S2S does is to manage computer networks for other people. For us, that’s the extension to a lifetime, end-to-end service arrangement with customers.”

Andrews wants to make one thing clear from the offset. The acquisition programme he has engineered has not been entirely focused on moving beyond core construction, though contracting as a proportion of turnover is set to drop from more than 80% to less than 70%.

“We also bought ceiling contractor Johnson, which is very much about the contracting part of the business. The strategy has been about strengthening the construction capability, as well as developing more of a capability for facilities management businesses.

“We are probably the single largest m&e company and we intend to stay there. But we’re trying to build around that platform.”

Andrews believes that this holistic approach is a trend that can be witnessed across the industry. The managed services market, however, requires a very different skills set to the upfront contracting one.

“It’s a whole other-value chain. For a lot of small m&e contractors, it’s a tough step and they’re probably better off sticking to the knitting. There is a level of investment in any kind of diversification, and buying businesses like S2S is far more expensive per pound of turnover than buying a contractor, believe me.”

Buying businesses like S2S is far more expensive per pound of turnover than buying a contractor, believe me

NG Bailey also acquired building control business ICS 18 months ago, to broaden the capabilities of its intelligent building systems (IBS) arm. It has also invested heavily in organic expansion within this arena.

Andrews is a strong believer in testing any major developments within NG Bailey’s own buildings. “We opened an office in Reading about 18 months ago, and we’ve installed our own IBS. We didn’t get it all right first time, that’s for sure. But we were able to optimise and fine-tune how that system works. You’ve got to practise what you preach or you’ll go nowhere.”

The firm is set to open its latest regional headquarters in Strathclyde, Scotland, within the next few months. The newly constructed £5.5 million building will showcase the company’s advancements in intelligent buildings and incorporate the latest green technology, including a ground-source heat pump, solar thermal collectors and integrated control systems. The goal is to achieve a BREEAM ‘excellent’ rating.

“Sustainability’s a big issue for us. We have 30-odd buildings around the country and we’ve made considerable investments in monitoring their energy usage. The energy consumption of buildings is getting higher and higher on everyone’s agenda.”

Andrews believes that m&e contractors are simply not up to date when it comes to technologies such as renewables.

“Most require modelling capabilities that you just didn’t need to bother with in the past, and generally speaking they also require m&e solutions to be designed in conjunction with outside solutions.

So is NG Bailey trying to be up there with the best? “Absolutely!” he exclaims.

“If you’re a go-ahead company in a technologically complex industry, you have to keep your training up to date with modern legislation as well as technology, and we work very hard to do that.”

NG Bailey spends about £4 million a year training people from apprentice level up to those doing PhDs. The company takes on 100 apprentices a year.

“We’ve always spent more money on training than most of this industry. It gives us levels of quality and safety on site that are second to none. That doesn’t mean that we don’t use agency labour – we do – but it’s very important for us to have the ability to deliver it ourselves.

“Also, if you’re not bringing in apprentices, you’re cutting yourself off from a potential source of managers for the future. Why wouldn’t you train people?”

So where else does Andrews think the future lies for NG Bailey? The company has made some exciting investments in its offsite capability. A £5.5 million state-of-the-art factory in Bradford preassembles pipe and electrical modules, some of which are “bigger than this interview room”.

“It can all be pre-tested so you get higher standards of quality. You also cut down on waste and transport, so it’s up there on the sustainability front. When you see a project that has really embraced it, the differences are absolutely staggering. It has to be the way of the future.”

The new Private Finance Initiative (PFI) project for St Helens and Knowsley Hospitals NHS Trust which NG Bailey is working on is a good example of what can be done with modular systems. The £120 million m&e contract is the largest the firm has ever won. The scheme has just received the Build Offsite award.

Andrews becomes animated as he describes the project. “The Whiston Hospital section of the project is a 75 000 m2 facility, and we’ve put 1700 modules into that. Main contractor Taylor Woodrow has also taken offsite manufacturing very seriously, with bathroom pods and modular theatres. When you see it, there’s an awful lot less people on site than you would expect. And the standards of safety, quality and cleanliness – they just blow your mind.

“For me, part of the trick we need to learn is how to achieve that on a job where we don’t have a three-year lead-in. But when you see what can be done, it really opens your eyes.”