After a miserable 2011, BDP intends to boost profit by growing its international revenue by 20%. In an exclusive interview, the company’s new chairman explains the plan
It would be fair to say that 2011 was not a good year for the UK’S biggest architect.
Building Design Partnership (BDP) suffered a series of major blows as pre-tax profit plummeted by 60% and turnover fell from £86m to £62m for the year ending June 2011. Four offices were closed and 100 redundancies were announced last October after public sector cuts saw one of the firm’s biggest UK-based contracts put on hold.
Six months into a new year though, and things seem to be looking brighter. There is a fresh strategy, an enhanced international drive and a new chairman. David Cash has stepped up to the role after 32 years at the company and, following four years as the firm’s head of international development, he is well placed to help BDP meet its objective to increase overseas work by at least 20% in the next three years. In his first interview since becoming chairman, the 59-year-old explains why he is confident that BDP will succeed in its foreign adventure, and why it all hinges on a decision made four years ago.
This week, Cash took on the role of chairman from Tony McGuirk, who will be focusing more on winning projects, after six years in the position. After such an annus horribilis for the firm, Cash is well aware that the pressure is on as he takes the helm alongside chief executive Peter Drummond: “I am excited but, of course, apprehensive too. I wouldn’t be human otherwise - these are challenging times.”
He qualifies BDP’s recent difficulties, stressing that it rode out much of the recession before being hit: “We were doing a lot of social infrastructure projects like schools and hospitals at the start of the recession so it didn’t hit us as hard as it could have done. It has been the last 18 months which have been quite a lot tougher because there haven’t been many of those types of projects available propelling us forward.”
Stepping up our international emphasis has not been a direct response to the European market but a fortuitous strategy that couldn’t have been timed better
He admits he doesn’t see a let-up in the UK and western Europe any time soon, so his expertise and background in international development will come to the fore as the firm looks elsewhere for business. The aim is to boost BDP’s profit over the next three years by increasing overseas work - which has been made far more feasible thanks to a strategic decision made four years ago, long before anyone knew just how crucial it would be for the future survival of the business. “Stepping up our international emphasis has not actually been a direct response to the European market but a fortuitous strategy that couldn’t have been better timed,” explains Cash. “The tough times here have coincided with international growth and increasing need for education and health projects in the Middle East and China - and this is exactly our area of expertise.”
This prescient strategy has meant that BDP is already well established in certain regions rather than having to carry off the risky manoeuvre of rushing in reactively: “It’s not as easy as saying, ‘We have won a job here, let’s sign the contract, put our name above the door and get on with it’,” says Cash. “You need to spend a lot of time researching, take professional advice, and get to understand the cultural and legal differences. It can put a lot of strain on your organisation.”
But in BDP’s case, it’s paying off. The firm has opened three offices in India, China and Abu Dhabi over the last three years as international work now makes up 30% of the group’s overall turnover compared with 10% in 2009. This is a figure that Cash sees rising to at least 50% over the next three years as the group becomes increasingly established in new regions, picking up bigger and better projects: “It’s difficult to name recent projects as overseas clients are strict on confidentiality,” says Cash. “But to get an idea of scale, we have just won two academy projects in Qatar with a combined construction value of £180m and we’re looking at a big university project just outside of Shanghai with a construction value of £90m.”
And the strategy won’t just boost the practice’s balance sheet. There are now about 20 people working for BDP in China, India and the Middle East but Cash predicts sharp growth in headcount: “I definitely see those numbers going up a lot as we continue to build a presence and win work in these regions. At the moment we are winning work in a country but are using UK-based international design expertise. Our intention is to have studios in these regions that become self-contained like our studios in the UK. So, in three or four years time when the economy here is hopefully back on an even keel, our international locations should be self-sustaining and free-standing.
“In the meantime, there are certainly overseas work opportunities, and I would say to the entire industry - especially young architects and engineers - that if you don’t have things tying you down, travelling to global hotspots is an excellent career move.”
Cash adds that there are other regions on his hit list, namely Australia and Canada, countries that still have comparatively strong economies and a need for the type of social infrastructure that BDP specialises in. “It’s the health and education stuff again,” he says. “These are the places we are looking at next to win work.”
As for the UK, Cash “very much hopes” there will be no further reductions in size or regional closures, after offices in Belfast, Liverpool, Winchester and Edinburgh were shut down last year. The practice recently won the lead architect role on the £237m Alder Hey hospital project in Liverpool and Cash sees green shoots in the commercial sector. But that’s where the good news on home turf stops: “There is no question about it - more of our teams here in UK studios are working on overseas projects and hopping onto planes to other parts of the world.”
There is no question about it – more of our teams here in the UK are working on overseas projects
But he is quick to stress that this will not be a lasting theme of the BDP story: “[The future] is definitely a story of growth. The last year has been very difficult; we have reduced in size and I am not saying figures will go through the roof over the next 12 months. Like many organisations we have faced challenges and will continue to do so and I am aware that this won’t be an easy ride in the current climate. But I am hopeful we’ll see some steady growth.
“If I can take BDP from being a UK-based company that does projects overseas to a world-based organisation - something I am well equipped to do - then I would feel like I had made my mark.”
Come fly with cash
Short or long haul? Long haul
Pretzels or peanuts? Peanuts
Teetotal or glass of wine? Glass of wine
Carry-on or luggage? Carry on
Day or night flight? Day flight