Bovis plans joint ventures with General Property Trust

Bovis Lend Lease is in talks over possible joint-venture work with General Property Trust, the developer that this month merged with Bovis’ Australian parent Lend Lease.

John Spanswick, chief executive of Bovis Lend Lease’s Europe, Middle East and African division, said the possible tie-ups on retail schemes in Europe was a sign that GPT had gained a greater understanding of the Bovis business.

Spanswick said: “I think the view they took of us was that we have a delivery machine that is pretty significant in the UK and Europe. GPT has funds and is likely to want to invest outside Australia in retail work. If you put that together you have great opportunities to benefit both companies.”

Spanswick said he thought the perception of Bovis among Australian analysts as a high-risk business had been overcome.

He said: “The perception was that we were a Multiplex or a Laing O’Rourke. We are not. We mainly work on two-stage tenders rather than single-tender jobs and work with regular clients in partnership. We do not have the same risk profile as some other contractors.”

The possible Bovis–GPT link-up came as Lend Lease posted an after-tax operating profit of £93m for the year to 30 June. Bovis itself reported a profit of £28m for the period – nearly half of Lend Lease’s earnings for its Europe, Middle East and African division.

Spanswick said the firm had won £1.1bn worth of commercial contracts in the period.

These included pre-construction work on the £800m redevelopment of Battersea Power Station, a £106m design-and-build contract from Land Securities for its Bankside 1 scheme near the Tate Modern

The perception was that we were a Multiplex ... We are not

John Spanswick, Bovis chief

and the £68m refurbishment of the BBC Scotland headquarters in Glasgow.

Bovis was hit by delays in two PFI hospital schemes in Manchester and Leeds, which will not reach financial close until early next year. Spanswick said that, despite this, the firm had already started on site in Manchester under an early works agreement.

Spanswick said Bovis was in talks with the Department of Health through the Major Contractors Group to iron out the delays affecting bigger PFI schemes. Spanswick said the problem was in the preparation work done by public clients in getting PFI deals on the market.

Spanswick said: “There needs to be a bigger emphasis on making sure that all parties demonstrate the affordability of schemes before they get to the bidding process. There is a greater concentration on that now and hopefully in the next batch it will work better.”

Spanswick, 61, said he had no intention of retiring imminently, as had been rumoured in the market. He said: “I am in no rush. This is a fantastic business and there are some great guys coming through.

I plan to be around for some time.”