Launched two years ago, the business was trumpeted as a lucrative venture that would see Mowlem benefiting from the poorer reputations and slower response times of many smaller builders. But analysts revealed this week that figures supplied by the company show that the division will find it tough to balance the books in the year to 31 December 2000. Its operating loss of £3m last year was on turnover of £38m. It is expected to turn over £45m this year.
Analysts say a combination of factors, including high overheads, fast expansion and a volatile seasonal workload, have hit Skillbase’s bottom line. The firm has also lost a number of housing association contracts.
Skillbase’s teething problems may have implications for other contractors, such as Carillion, Morrison and Taylor Woodrow, which have smaller operations doing home repair work for insurance companies.
The business carries out insurance work for firms such as CGU and Abbey National and repair and maintenance work for housing associations and local authorities. It does most of its work through 500 directly employed operatives based in 17 offices around the country.
Analysts say the high cost of providing transport and IT infrastructure for its staff has caused major problems for the business. “In short, they will never be able to beat Joe the Joiner and his Ford Mondeo,” said one.
In short, they will never be able to beat Joe the Joiner and his Ford Mondeo
Skillbase operations director John Boyd admitted that the firm had begun life with high overheads but said that this and the loss last year were unsurprising for a business in its first year of trading.
“It’s all about where you are trying to position yourself in the market,” he said. “Some housing associations tell us they would rather get a man in van for £9 an hour. But we argue that he doesn’t have the advantages of a national call centre, information technology, our health and safety standards and so on.”
Late last year, Skillbase’s loss-making Bristol operation was closed. And this March, the business closed its call centres in Leeds, Sheffield and Livingston and moved 60 staff into a purpose-built 24-hour centre in Rotherham.
Skillbase was originally headed by Brian May, Mowlem’s managing director of building, who left for Laing Construction in March.