ISG opens five offices as it targets smaller jobs

ISG has opened five offices in the past nine months as part of its strategy to compete with regional businesses for smaller deals, writes Andrew Hankinson.

The £972m-turnover contractor has opened offices in Cardiff, Exeter, Liverpool and Newcastle as well as expanding and relocating its Birmingham team into a larger base.

Although David Lawther, the firm’s chief executive, has predicted that its regional workload will fall 10% to £304m over the next 12 months, the move is being led by its clients
in some areas.

Lawther said: “Project sizes are coming down, but we’ve built from over £100m down to £50,000 and we’ve always had that span of activity. The new offices will make it easier to do the smaller jobs, though, because they’re about relationships with the local communities and about being closer to local supply chains.” He added: “It gives us better geographical coverage, primarily for the general construction side, which by its nature is a more regional business, but sometimes linking in with the food [retail construction] side.”

The openings take the company’s total number of offices outside London to 14. It also has bases in Bristol, Huntingdon, Ipswich, Leeds and Manchester.

Howard Seymour, an analyst at Numis, said the openings were a logical extension of ISG’s regional operations.

“It’s rolling out what it does in other regions and increasing its footprint in regions it already works in,” he said. “It already works in Liverpool, it’s just that it does it from its Manchester office. We still expect its construction profit to drop by 36% over the next two years.”

The firm previously stuck to the London fit-out market, but decided to diversify by geography and sector four years ago, opening offices overseas and splitting its UK business between fit-out, food retail (fit-out and construction) and construction.

Lawther said: “The food retailers were particularly involved in the decision to open in Exeter and Cardiff, where there was clear demand for us to provide services. Newcastle, Liverpool and Birmingham are about embedding ourselves in the local communities and local authorities to better understand their priorities.”