Contractor in talks with German target as firm prepares to expand on Continent.

Bovis lend lease chief executive Ross Taylor has revealed that the contractor’s expansion into Europe will involve one or two major deals on the Continent in the next six months.

Taylor said the firm was in talks to buy a German contractor, and he was generally bullish about Europe. “We are winning some good projects in most of the countries and the economies are coming back over there,” he said.

“We have to grow it country by country like we did in Asia. You cannot just spread one big hand over Europe – you have to focus on the countries.”

Taylor said he expected Bovis Lend Lease to do the same mix of work in Europe as it does in Asia, where it combines global work for multinational clients with more regional projects.

He said: “I am quite confident we will see the same thing happening here.”

Taylor, who was made chief executive in July after a boardroom reshuffle, said the firm was not actively looking for acquisitions in the UK as part of its European strategy.

However, he added: “If we move for acquisitions here it would be getting us strategic skills such as in the pharmaceutical sector. We will win more work with better profits if we have better expertise and better value-added services.”

Taylor added that globalisation was now taking effect, with bigger clients demanding worldwide suppliers. He said: “It starts to show us the real importance of global franchises. It’s been talked about for some years and now we are seeing it in real terms.”

The talks with the German firm come after Bovis Lend Lease’s parent, Lend Lease, announced its year-end results, the first it has produced since it acquired the contractor last year.

Taylor said Bovis Lend Lease’s results, which saw after-tax profit rise 54% to £21.7m for the year to 30 June 2000, were 10% higher than expected.

He said: “The risk was that as we spent six months to integrate the business we would lose momentum and not win work. It’s a very nice position to be in.

“The dream looks quite positive. We have pretty well finished with integrating the businesses. You don’t want to spend the rest of your life doing that.”

The profit rise was attributed to higher construction activity in Australia and the completion of a number of large projects. The group’s Asian operation made a loss, with Taylor describing market conditions as patchy.

New Bovis Lend Lease work for the year to June 2000 stood at £2.2bn, compared with £817m in 1999.

The July boardroom reshuffle also saw former chief executive Luther Cochrane made group chairman and Sir Frank Lampl taking over Taylor’s previous role as president.