MDA chairman set to prove himself after 2002 buyout

“MDA seems to have found itself landed with the role of the cadaver in an anatomy class: an exemplum of the problems faced by QSs everywhere.”

That was how Building saw the firm’s situation back in November 2001. It had posted a £2.5m loss on turnover of £16.3m, its chief executive, Richard Houghton, had just been voted out, Stefan Allesch-Taylor, the hyperactive entrepreneur who owned 29% of the company, wanted to merge it with a rival, and a “branding expert” called Elaine Headlam had just taken over despite entrenched internal opposition among the firm’s 200 employees. Nine months later it was in administration.

In July 2005, all of that seems like a bad dream. MDA is a smaller outfit – 140 staff and a turnover of £10.2m – but its position is relatively secure. For one thing, it is owned by 46 of its own staff, and has stable leadership.

The man credited with rescuing MDA is Charles Johnston, a former construction director at J Sainsbury. He became chairman ahead of a confidence vote in Headlam – she won but resigned anyway – then led a management buyout in August 2002.

Johnston maintains that the firm is now poised to deal with what may be a difficult market. The company is half way through a three-year business plan, and this year expects to make a profit of about £500,000.

“The company is now entirely owned by directors and staff, so the younger generation can get involved in succession planning which motivates staff,” he says. But the market is not about to give the company an easy time, according to reports on construction output from the DTI and the Construction Products Association.

Johnston responds that MDA has defended itself by working on projects across all sectors. “The commercial market has been jittery,” he concedes, “but we have been strong in residential and hotels.”

Although it is difficult to imagine that anything might keep the affable Johnston awake at night, one of his major concerns is pressure on margins. “QS standards have been brought down by jobs being won purely on a cost basis,” he says. “Clients should spend more money up front and they will save in the long-term.”

He is also concerned by construction’s lack of a voice in government. He supports the idea of reforming Movement for Innovation, the DTI-backed body that was a stand-alone initiative but now falls under the Constructing Excellence umbrella. “There was a lot of government input so we already had a successful solution. It doesn’t need a lot to bring that back and we’re talking about starting that up again.”

Despite suffering its own blow when MDA failed to be named as a framework adviser for the governments £2.1bn Building Schools for the Future Project, the company has won a lot of PFI work through Carillion, is the cost manager on the roof project at Wimbledon’s Centre Court, and is part of the team that has just submitted a planning application for Center Parcs at Woburn.

It looks good on paper, but MDA Consulting – and Johnston’s business decisions – will be judged by the progress made when 18 months is up.