F&G sees profits surge after moving up food chain

Faithful & Gould has seen a major uplift in profits due to a switch away from basic quantity surveying in favour of higher level consultancy work.

Richard Hall, managing director of F&G, said: “We have stopped doing business with people wanting agency type rates and who are just buying in people rather than a service.”

He said the change of tack was behind improved financial results for the six months to September 2005.

The firm’s figures were reported as part of parent company Atkins’ Management and Project Services division, which is made up of F&G and Atkins’ management consultancy business.

The division achieved an operating profit of £6.1m for the six months to 30 September. For the same period in 2004 it made £2.9m. The rough doubling of profit was managed on only a 17% increase in turnover from £71.2m to £83.5m.

Hall said: “We have stopped doing work that doesn’t pay.” The firm is concentrating on so-called value added services such as consultancy work, dispute resolution, due diligence and whole life costing.

Hall said F&G was no longer working for clients “who just want a couple of QSs”. Such clients were typically found in the industrial sector and particularly the oil and gas refinery business, he said.

We don’t want our surveyors working in unpleasant environments

Richard Hall, managing director, F&G

Instead F&G has been working more with firms “who want our intellectual knowledge”. These include some in the energy sector, said Hall, such as existing clients British Energy and National Grid.

For both clients the firm is carrying out strategic projects investigating how to meet extra requirements for power in the country. The focus is on how to extend the lives of existing power stations and the feasibility of new power stations, including nuclear plants.

Hall said: “A firm like ours, with all it has to offer, doesn’t need to work with people who don’t appreciate the value of the work we are doing.” He said the policy should help F&G retain staff. “We don’t want our surveyors working in unpleasant environments.”

F&G has also been picking up business in the rail and banking sectors, while performing better in the US. Hall said this was because US clients were starting to hire cost consultants directly, which was bringing them further up the food chain. Until now architects and engineers have typically handled procurement in the US.

Hall added that the Shanghai office was doing well. It has won the cost consulting role on a $1.5bn plant construction project for chemicals producer Huntsman BASF.

The Atkins group overall reported an operating profit of £25.9m for the six-month period on a turnover of £516m. This compares to £23.5m for the six months to 30 September 2004 on a turnover of £463.4m.