The bigger picture

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Before you read about how well our shortlisted firms have been doing their jobs, consider what they’re up against …

One thing to say about the business of contracting is that life is never boring. Even at the peak of Britain’s longest post-war boom, firms are having to run hard to make their money, or stem their losses. The table to the right demonstrates just how uneven the performance has been across all sectors. The thing is, financial performance for a specialist is often as much the outcome of luck as judgment.

The leading sector in the specialist contracting market is M&E engineering. Of the top eight companies, one is making an £11m loss, two are recovering from losses of £9m and £3.3m and three are experiencing decent profit growth. And the best performing firm, Yorkshire outfit NG Bailey, recently suffered the disaster that was the National Physical Laboratory in Teddington.

The central problem with contracting is, and has always been, that regardless of what is happening with the background economy, every job has the potential to go badly wrong. The good news is that luck is ruled by the laws of probability; to make money in the long term you have to get the odds in your favour.

Bailey’s improved performance demonstrates two ways of trying to improving performance over time: it has made a move to climb aboard the regeneration bandwagon, and it has formed partnering ventures with Waitrose, Asda and BAA. Partnering makes up 8% of the firm’s turnover, and Bailey has set itself the goal of doubling this by 2006. Of the two methods, only the second offers the prospect of decreasing risk, and so increasing the longer term profitability, of the business.

Partnering is attractive to specialists for a number of reasons. First, it trades lower profit on a given job for longer term income streams, which makes for easier planning and credit; it protects companies from the market; and it probably helps a bit with disputes. The risk is that a firm become overdependent on one client. The challenge is that its culture has to be able to cope with open-book accounting, the staff must have good social and verbal skills and the ability to join a project early to help value engineer the whole design. Only the best firms can do this, so over time, they are the ones that will prosper.

Going back to BAA, many of the firms on its framework, such as Laing O’Rourke, Severfield-Rowan, Schmidlin, Crown House Technologies, Bachy Soletanche and Van Dam, figure prominently in these awards and tables. Which isn’t down to luck …

Table notes

1 Wages and employees relate to Mitie group.
2 Turnover excludes plant hire. No UK breakdown of turnover but most from Asia.
3 No data for 2002 due to a company buy-out
4 No UK breakdown of turnover given

The academy

Martyn Wright, Wates
James Pickard, Cartwright Pickard Architects
Tony Cox, EC Harris
Zara Lamont, Carillion
David King, Interior Services Group
Steve Crompton, RMC Group
Keith Clarke, Atkins
Rick Mather, Rick Mather Architects
Brian May, formerly of HBG Construction
Vincent Clancy, Turner & Townsend
Laurie Chetwood, Chetwood Associates
PD Holliday, Ward Homes
Tony Giddings, Argent
Paul Gandy, Multiplex
Graham Field, Land Securities
Roger Fidgen, Waterman Group
Wayne Hemingway, Hemingwaydesign
Andrew Hemsley, Cyril Sweett
Benny Kelly, Sir Robert McAlpine
Gareth Hoskins, Gareth Hoskins Architects
Chris Houchin, Heery International
George Iacobescu, Canary Wharf Group
Francis Ives, Cyril Sweett
Peter Denness, AWG Construction Services
Alan Jones, Anthony Hunt Associates
John Shreeves, John Shreeves & Partners
Stef Stefanou, John Doyle Group
David Morley, David Morley Architects
Richard Saxon, BDP
Mark Whitby, Whitbybird
Andrew Broomfield, WT Partnership
Simon Tolson, Fenwick Elliott
Steve Trotter, Exterior International
David Tuffin, Tuffin Ferraby & Taylor
John Berry, Arup
David Thompson, AYH
Keith Perry, Lend Lease Europe
Paul Morrell, Davis Langdon
Tony Carey, St George
Geoffrey Adams, United House
Steve Moschini, Stanhope
David Mosey, Trowers & Hamlins
Carl Wright, Mace
Michael O’Sullivan, George Wimpey
John Pagano, Canary Wharf Contractors
Andrew Wolstenholme, BAA
Kate Priestley, Inventures
Paul Whitmore, Morgan Sindall
Struan Robertson, Wates
Ed Hinchcliffe, Taylor Woodrow
Steve Elliott, Overbury
John James, British Land
Graham Rice, Heery International
David McLean, David McLean Group
Geoff Wright, Hammerson
Geoff Irvine, Irvine-Whitlock
Rudi Klien, SEC
Tom Bloxham, Urban Splash
Paris Moayedi, IWI Holdings
John Morgan, Morgan Sindall
RH Campbell, Waterman
Tony W Pidgley, Cadenza Group
Ken Shuttleworth, Make
Christopher Strickland, Greycoat Estates
James Wates, Wates
Bob White, Mace
Douglas White, Wilson Bowden
Tim Wray, Turner & Townsend
Colin Wyatt, Gardiner & Theobald
Iain Rowe, Alan Baxter and Associates
Tom Jestico, Jestico & Whiles
Mark Gordon, Costain
Andrew Graves, School of Management
Colin Harding, George & Harding
Ron Davis, Jonathan Edwards Consulting
Michael May, Peabody Trust
Paul Larcey, Lafarge Roofing
Christopher Cole, WSP Group

Generic Notes

Joint ventures are included in the overall figures
Turnover from all geographic areas included for any company registered in UK
Exceptional items included in all figures
All employee figures and salaries are for overall company in listing
If more than one subsidiary is involved in specialist contracting, their results have been given separately if they qualify for the top 50
Total specialist contracting turnover provided, including that from discontinued operations wherever possible
All companies in the listing are UK registered companies in their own right. Contractors with specialist contracting divisions that are not separately registered have not been included
All data is in £m

Methodology

How the winners were chosen
We started by asking specialists to enter through the Specialists Showcase section of Building's website. This attracted 164 entries – well up on last year.

We then brought together a panel of leading procurement directors from some of the UK's top main contractors to help the team from Building (deputy editor Andy Pearson) and from Construction Manager (editor Rod Sweet) draw up the shortlists in each category. This resulted in the four, five or six finalists that were identified for each award.Details of these firms were then circulated to our academy. The academy members are all senior people from the industry – either clients, main contractors, big project construction managers or leading architects or engineers. Between them we have many people who "buy" literally hundreds of millions of pounds worth of work a year from specialist contractors.

The member of the academy were asked to rank the firms in each category they felt able to vote for – some were able to do this for virtually every category; others only voted for a handful of the categories.

The firms that got the best overall rankings are the winners.