Selling infrastructure was right thing to do, says Osborne chief as firm nosedives into red

Osborne put its infrastructure business up for sale to concentrate on its development, property maintenance and offsite construction work instead, its chief executive Andy Steele has told Building.

The business, which was put on the market last Christmas, was sold to London private equity firm Sullivan Street Partners for an undisclosed sum in August.

The departed infrastructure division will be chaired by David Fison, Steele’s predecessor as Osborne chief executive, and, according to its latest accounts, had a turnover of £270m in the 18 months to September. It employed just over 300 people during the period.

Steele said the business attracted early interest from the trade but admitted it quickly became clear that it would be picked up by private equity.

Explaining the decision to sell infrastructure, he said: “We want to become a specialist rather than a generalist. We’re taking some of the volatility out that you get with pure contracting.”

He said Osborne’s developments business was the one it “would drive the hardest” with the division carrying out BTR, student accommodation and affordable family housing work.

Steele added the firm is also ploughing money into its offsite manufacturing business called Innovaré, which employs around 80 people at a site in Coventry and specialises in work for the education and housing sectors.

“We’ll be very focussed on housing and education. There’s so much demand for that, that it finds its way ultimately to the factory.”

The firm, which made 65 people redundant last year, claimed £1.6m from the government’s Coronavirus Job Retention Scheme after furloughing 30% of its 900 staff last April during the first lockdown with everyone eventually returning by the autumn.

Steele, who last week formally took over as chair of industry group Build UK, was speaking as Osborne nosedived into the red during the 18 month period to September last year, turning in a £13.8m pre-tax loss from a £4.5m profit in the year March 2019. Its cash balance fell £10m to £13m.

Turnover during the 18-month period was £551m compared to £380m in the year to March 2019.

Meanwhile, former Wates chief operating officer Dave Smith this week took up a role as a non-executive director at Osborne.

Smith, who was previously Balfour Beatty’s managing director for its construction business in the south of England, is also non-executive chairman of Kent contractor Claritas.