Bovis Lend Lease’s UK business was this week hoping that a turbulent two year period has come to an end..
Bob Johnston, Bovis’ leader, says that the £48m hit it announced this week resulted from overexpansion between 2003 and 2004. He said: “It was a period of high growth for the business and the industry, and we ‘re having to address some of the shortcomings in our approach to taking on additional risk without having the depth of skills and capabilities to service it.”
That was before Johnston’s time, when Adrian Chamberlain was at the helm. When Johnston arrived, he restructured the business, and its senior management.
Jason Millett left in June 2006 after 18 months as UK chief executive. Before that he was managing director of the northern business. When Johnston arrived in November 2005 he clashed with Millett. Johnston was not happy that the firm’s UK chief executive was based in Manchester, and Millett was not happy with Johnston’s decision to split the UK business into a construction and a PFI arm. A string of high-profile departures followed, including Andrew Silverbeck, the chief financial officer.
Johnston swiftly brought in his old friend, and fellow Australian, Murray Coleman, as UK chief executive. He had been running the Asia Pacific region and, like Johnston, was known for his firm, no-nonsense approach to his work.
The problems at the Manchester Joint Hospitals scheme largely centred on the heart and renal unit, which was handed over behind schedule in December last year.
The project is extraordinarily complex. It involves 13 new buildings and the renovation others, some of which are over 100 years old. The client comprises 44 groups and has involved over 2,500 design submissions. Johnston said this “added to the inefficiency”.
Unsurprisingly, he has vowed to take a more cautious view on such high-risk projects in future.