Company profile Work is picking up for groundworks firm, but profit is an ’ancient word’
The tide has turned, according to the Surrey-based groundworks firm Coinford: private residential work is picking up and developers are starting to build. Unfortunately, profit is a little way off yet, writes Andrew Hankinson.
We’re turning away 60% to 70% of tenders. if it’s not a preferred client we don’t do it
“The upturn has happened because private developers sold stock better than they thought they would,” says Nigel Chandler, commercial director at Coinford.
“Suddenly they haven’t got anything left to sell, so they’ve realised they have to get building.
“Now they’re taking advantage of the rock-bottom prices, so we’re down to the knuckle with regards to pricing, and we have to be in order to get the jobs, as there are so many scrambling for their lives. The word profit is an ancient thing.”
Coinford specialises in groundworks, infrastructure and concrete structures, mainly for developers such as Barratt, Berkeley, Bovis Homes and Persimmon.
Current jobs include £3m of groundworks on the Kidbrooke regeneration in Greenwich, south-east London; a Minerva redevelopment of a 19th-century residence overlooking Hyde Park in London; and a £6.5m groundworks deal for a Berkeley residential scheme in Cambridge.
The firm is owned by brothers Gerry and Mike Hickey - Gerry concentrates on site work, Mike on the administration. Chandler, 40, who has worked for Coinford for 12 years, allocates the tenders and manages the estimating side. A qualified engineer, he previously worked for John Laing on sites - “I felt like my left leg had been cut off when I first started working in the office.”
Now he is trying to ensure the firm makes the most of its resources. About half of the workforce has been laid off. Now, the number of workers on site is about 400, although only a portion of those are directly employed. Chandler says he is not sure of the exact figure, but emphasises that it is increasing. His priority, however, is turning bids into cash.
“We’ve had to draw up a list of preferred clients. At the moment we’re turning away 60% to 70% of tenders - we have to as we got rid of people in estimating. So we’re trying to work with people we’ve got a good relationship with, as there is no point in taking a shot in the dark. There are some lovely jobs [among] those we’re turning down, but if it’s not a preferred client, we don’t do it.
“Most of the clients on that list are private. Before the credit crunch we got around 85% of our work from private developers, with the rest government funded. But in June 2008 it stopped, just like that - our private work dropped to about 40%. Now it’s back up to around 75%.”
Coinford’s public sector work is in jeopardy, and the only jobs it is now doing were signed off before the general election. Chandler predicts that Coinford will “start to feel the cuts next month or the month after”. As he points out, groundworks firms are the first to notice the fluctuations in construction activity and the first to come out of any hard times. So what’s his assessment?
“I’m never going to say we’ve ridden the storm, and we’re still fighting for every job,” he says. “But I can see us making a profit on the work we’re doing towards the end of the year. And we’re keeping the lads ticking over - that’s the main thing.”
Before and after
80 - Office staff before the credit crunch
50 - Office staff after the credit crunch
£80m - Annual turnover to June 2008
£40m - Annual turnover to June 2009
£55m - Estimated turnover for 2010
Pictured: Coinford’s current jobs include the redevelopment of The Lancasters, a 19th-century residence overlooking Hyde Park