‘It’s as tough as I’ve seen it,’ adds Vince Clancy
The covid-19 crisis is as bad as the scale of disruption caused by the global financial crash more than a decade ago, the boss of Turner & Townsend has said.
Chairman and chief executive Vince Clancy, who has been with the business since 1989, said the current problems were being exacerbated by the pandemic’s unpredictability making it hard for firms to plan a route out of the problem.
He added: “It’s very similar [to the financial crash] in terms of the economic disruption. But it has felt different this time around. Covid-19 is a unique event, understanding the rules of the game are more challenging. It’s as tough as I’ve seen it. It’s on par with the financial crash of 2008. We do expect this to be a long road out of the crisis, rather than a short one.”
He was speaking as firms head into the autumn facing unprecedented uncertainty with firms voicing fears over the impact of second lockdown and a growing unease about what sort of deal the UK might get when the transition period after leaving the EU ends in three months’ time.
Clancy said the pandemic had not left any part of the firm, which employs around 6,800 people across 111 offices working in 45 countries, untouched.
“Every single market is impacted to varying degrees,” he said. He added the two most affected sectors it had seen were aviation and the oil and gas market. “Aviation clients rapidly descaled their programmes and with oil and gas that sector is under a lot of stress.”
But the firm has not followed others and taken the axe to large numbers of jobs with Clancy saying it had managed to keep the scale of global redundancies to less than 200 people as the firm looks to keep staff ahead of markets recovering.
“We had to make a certain amount [of cuts] but we want to retain excess capacity for when revenues return. The crisis has not been caused by an economic crisis, it’s been caused by a pandemic rather than a structural shift in demand for construction.”
He added that Australia and Germany were among the countries coping well with the crisis “and learning to live with it”, adding: “With the UK and North America, the challenges are larger.”
The UK is the firm’s biggest single market with around 3,000 staff and 40% of last year’s global turnover of £744m. It has 16 offices, four less than the 20 in the US which employs 1,150 staff.
Clancy said it was too early to tell how much impact the virus would have on UK numbers this year. In the year to April, revenue at the UK was up 9% to £283m with operating profit up 25% to £36m.
Oil and gas has been under pressure from governments around the world implementing carbon reduction programmes and Clancy said the zero carbon market was one of several which was growing along with infrastructure. Others to have held up include hi-tech, life sciences and health.
Global revenue at the business was up 16% to £744m in the year to April with operating profit up 29% to £88m.