The internal life of NG Bailey, the UK's largest M&E firm, has always been a dark secret. Now chief executive Mark Andrews has given its first interview, and in it he talks (fairly) frankly about past troubles and future plans.
Mark Andrews wants to get one thing straight from the beginning. "There's nothing strange about this company," he says, with a firm stare. "No Masonic handshakes. No weird religious cults."
To some, this may seem a bizarrely defensive opening. But for anyone familiar with NG Bailey, the UK's largest M&E engineer, the assurance is welcome. This firm has always believed in the Yorkshire virtue of keeping itself to itself. None of its managers has ever given a full-scale press interview, and a visit to its headquarters involves an hour's drive into Ilkley Moor to a country estate. Behind baronial iron gates is a green lawn, strewn with pheasants.
Andrews is not a boss in the traditional Bailey mould; indeed, that's why he was appointed back in November 2004. At the time, the firm's performance was giving cause for concern. Profit growth was slowing, divisions were underperforming and the company as a whole seemed to lack direction. The Bailey family, Edward, Martin, Cal and Richard, looked around for a troubleshooter, and Andrews was a natural choice.
They'd been aware of his reputation since the mid-1990s, when he was at Balfour Beatty. Balfour Kilpatrick, its M&E arm, got into trouble on the Heathrow Express and Jubilee Line Extension, and Andrews was parachuted in from the major projects division to sort them out.
"There were some interesting commercial problems at Balfour at the time," he says, with just a hint of understatement - the collapse of a tunnel under construction at Heathrow had landed the firm with a £1.2m fine for endangering the lives of workers and public. "The wheels had come off Balfour Kilpatrick, and I was asked to put them back on again." Andrews duly obliged, and went on to set up the Balfour Beatty power networks business as a splinter group.
Andrews' next step after leaving Balfour in 2000 was to restructure the £80m US arm of Pirelli, the world's largest maker of power and telecoms cables. Four years later, he was approached by the Baileys.
One of his aims is to dispel any concerns that the company is mixed up with the Illuminati, or possibly the Priory of Sion. Hence the meeting with Building in the company's Bayswater offices in west London. Then again, he does have good news to publicise. In his first year at Bailey, pre-tax profit has increased 24% and turnover has hit the £400m mark. He has also masterminded an acquisition programme (see page 18).
Andrews attributes his success to the diversity of his previous experience, including his time in heavy industry. "Construction is too insular," he says. "We don't have the talent within the industry to cope with the current workload. There needs to be a broader base."
There’s nothing strange about this company. No Masonic handshakes. No weird religious cults …
This absence of a broader base is also a problem for Bailey, as Andrews admits. Few other managers at the firm have experience of working overseas, and taking the firm into international markets would be too risky. However, he has prioritised the company's future recruitment, and has launched an apprentice scheme. "We have more applicants per place than Cambridge," Andrews says, with an assertiveness that borders on arrogance. "We have the best apprentice scheme going."
He also wants to expand Bailey's UK operations. The firm is launching an ICT business in May. It is also interested in Building Schools for the Future and NHS work "once the health service procurement is sorted out".
But PFI is a touchy subject for the company, as will be apparent to anyone who remembers its agonies at the National Physical Laboratory project in west London. In 2001, NG Bailey agreed to pay Laing, the main contractor on the job, a £3m out-of-court settlement after technical faults were found. The firm's total loss on that project has been estimated at £10m.
Here, Andrews gives the a sign that he might be grateful for the occasional opportunity to revert to Bailey's code of omerta. "It was before my time," he says evenly. "It's complete. It's over." The one thing he is prepared to say is that the project's failure had nothing to do with the fact it was a PFI scheme.
Be that as it may, Andrews is still reluctant to involve the company too far in the PFI. For example, it has never taken an equity stake in a project. "We continue to review the situation," he says, "but on some contracts you can make more money by just being involved in the construction." His judgment is borne out by the firm's current experience on the St Helen's hospital PFI, where financial close has been overdue for about 18 months.
The flexibility to respond to market developments without having to satisfy shareholders is, he says, the main benefit of working for a private company. "We're not tied by quarterly numbers, and can react quickly to changes in the marketplace. Some of the investment opportunities I'm looking at now, previous employers would have rejected straightaway."
This advantage, to Andrews, outweighs any effort he has had to make to persuade the Bailey family to emerge from its moorside lair. "They like to keep their private lives private and I respect that," he says. "But they don't have a problem with the way I do things. It's just that as a privately owned company we can choose who we communicate with."
It's one thing to vouchsafe Building an interview, but having shareholders to satisfy, you can't help thinking, would be just a bit too open.
Not your usual CV …
University: Degree in civil engineering, Imperial College London
1980-89 Chicago Bridge Iron Company, progressing from site engineer to project director overseeing construction of an £85m oil terminal in Saudi Arabia. “That last one was in a real shit hole. There were 1000 men working in the middle of nowhere. But it was also great fun.”
1989-94 Global market director at industrial gas supplier BOC Gases “I joined them as a corporate planner. I realised fairly quickly I wasn’t cut out for the role.”
1995-2000 Balfour Beatty: “My father worked for Balfour before me. He was a project director and never wanted to leave. It ended up killing him, aged 55. It’s one of the reasons I moved from running projects to a business.”
2000-04 President and chief executive of Pirelli Cables and Systems North America “I got one of those calls from the big boss saying the business was falling apart. They wanted me to sort it out.”
2004- Chief executive of NG Bailey