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Building A Bad Reputation - But It's Better Elsewhere

Building A Bad Reputation - But It's Better Elsewhere
Oct 6
2017
👤 by Brian Shillibeer

Carillion is to refocus on its core strengths (if indeed it has any) – support services, infrastructure and building. It will deploy an new leadership team and a delayered which can only be taken as a euphamism for 'you're getting sacked in the morning' (or have already been given notice to quit).

 

Just for starters

There is an initial cost reduction target of £75 million by mid-2019.

 

Fire sale

Carillion expects proceeds from non-core business disposals to make £300 million. That's gone up from £125million, meaning more will be sold. The markets didn't take confidence from this - share prices dipped hugely.

Discussions are ongoing regarding sales of Carillion’s business in Canada and the UK Healthcare business.

Carillion wants to cut how much it owes its pension fund.

It has agreed borrowing of £140 million via a number of banks

 

Revised full-year outlook

Having declared a £1.15 billion loss in just the past six months and huge borrowing from its pension fund, Keith Cochrane, Interim Chief Executive, said: “This is a disappointing set of results which reflects the issues we flagged in July and the additional £200m provision for our Support Services business. We now expect results for the full year to be lower than current market expectations."

Full-year results are to be lower than current market expectations with total revenue expected to be between £4.6bn and £4.8bn (previously £4.8bn to £5.0bn)

The full-year average net debt is expected to be between £825m and £850m.

Cochrane continued: “The Strategic Review that we launched in July has enabled us to get a firm handle on the Group’s problems and we have implemented a clear plan to address them.  Our objective is to be a lower risk, lower cost, higher quality business generating sustainable cash-backed earnings.  In the immediate short term, our focus is to complete the disposal programme, accelerate our action to take cost out of the business and get our balance sheet back to a place where it can support Carillion going forward.

“No one is in any doubt of the challenge that lies ahead. We have made an encouraging start and the ambition is there to build on that progress. At the heart of this company, there is a strong core. Supported by an operating model that manages risk much more effectively and led by a fresh management team with a mandate to drive cultural change, I am confident that a strong business can emerge.”

 

Bouygues UK

Bouygues UK is the latest construction firm to declare big losses - £78 million this time. Like lots of the builders, they are blaming (not necessarily openly) that they are stuck in contracts that don't pay because they negotiated them before labour and supply chain costs rose as the UK and Europe came out of recession. (N.B. Bouygues FM operates as an entirley standalone enterprise and thus its figures are not affected by what happens within the construction firm.)

 

CBRE Group, Agrees to Buy Heery International

CBRE Group has announced a definitive agreement to acquire Heery International, the project management and design engineering business of the international infrastructure group, Balfour Beatty LLC.

Heery, based in Atlanta, is a leader in providing project management, design and commissioning services across the US with a wide range of corporate, government, healthcare, sports, aviation and education clients.

“This acquisition advances our strategy to grow our project management expertise and capabilities.  Heery has a strong track record of client service with many longstanding relationships spanning decades,“ said Mike Lafitte, CBRE’s Global Group President, Lines of Business.

“We are particularly excited about Heery’s ability to deepen our relationships in the public and educational sectors, grow our position in such new vertical segments as aviation and sports, and add capabilities and expertise in design engineering services,” he added.

Heery has approximately 535 employees in 19 US offices, providing services including project management, architecture, engineering, interior design, and commissioning.

 

GSH has taken a national integrated facilities management contract with (JLRNA) Jaguar Land Rover North America - rumour has it, the Jaguar UK could be next.

The multi-year contract, started on October 1 takes-in several locations including California, Oregon, Georgia, and New Jersey.

The GSH team will be dedicated to JLRNA and will provide employees with their everyday facility needs. Technical services will be delivered by GSH engineers and non-technical services will be integrated and managed by the GSH contract team to ensure comfortable, compliant workplaces.

The GSH Global Services Director, Clare Perry, commented: “I couldn’t be happier to secure the Jaguar Land Rover North America IFM contract. It is credit to the GSH Global team, who collaborated to produce an effective and customised solution which directly complements not only the client’s needs but improves the day-to-day workplace experience for their employees.”

Jaguar Land Rover continues their growth and expansion, including the current construction of the new Jaguar Land Rover North America headquarters in Mahwah, New Jersey. To support this, the GSH on-site team will be managing the transition of all building services and move management requirements as employees relocate to their new Jaguar Land Rover complex.

 

Poole Ospital NHS Foundation Trust

Poole Hospital NHS Foundation Trust has awarded a five year contract worth £13 million to Interserve to deliver facilities management services. The company, which is working with the Trust for the first time, will provide domestic cleaning, window cleaning and grounds and gardens services to the main 623-bed Poole hospital site, which also includes the St Mary’s Maternity Unit and the Forest Holme Hospice.

Paul Miller, Director of Strategy, Poole Hospital NHS Foundation Trust said: “Interserve has demonstrated that it understands our requirements and can consistently deliver to a high standard. We are confident that our partnership with Interserve will help the Trust continue our development of a responsive, high quality service using the latest cleaning technology.”

 

Consortium selected for £85 million Durham University project

An Interserve-led consortium has been selected for an £85 million project by Durham University to finance, design, build and operate two new colleges in Durham City.

The consortium, made up of Interserve, fund and asset management firm Equitix and on-campus student accommodation developer and operator, Campus Living Villages UK (CLV), will finance, build and operate the two new facilities for up to 50 years.

Interserve’s construction division will design and build the two new residential facilities, which will have up to 1,000 student bed spaces, plus associated academic and social college spaces on a University-owned area of land just to the south of the city. Interserve will also design and build a University hub building on the same site, comprising student facilities and administrative space.

Jane Robinson, Chief Operating Officer, Durham University, said:“Our ambitious University Strategy, 2017-2027 aims to ensure we continue to deliver world-class research, education and wider student experience. The development of two new colleges at Mount Oswald is a key project in delivering a wider student experience as good as anywhere in the world. We are very pleased to be working with the consortium to deliver this project.”

Facilities management services will be provided by CLV, while tenancy management, academic and pastoral activities will remain the responsibility of the University.

Space will be provided for John Snow College, which is relocating from the University’s Queen’s Campus in Stockton-on-Tees, and a new 17th college.

 

New contract with Capita

Compass Group UK & Ireland’s integrated facilities management business, 14forty, has secured a new contract with Capita.

Over the seven year contract, 14forty will deliver a range of soft FM services including catering, cleaning, security and reception and will see a team of 1,000 working across 230 locations throughout the UK.

Steven Malarkey, Facilities Commercial Manager for Capita said: “This contract will enable us to make significant savings while providing our staff with a wide-range of soft FM services.”

 

Bristol Old Vic

Bristol Old Vic has joined with local catering company Fosters to create a new catering and events space in the centre of Bristol. The centrepiece of this offer will be the historic Coopers’ Hall, which until last year, served as the theatre’s entrance. It has been everything from a Craft Guild building and a Quaker Meeting House, to an auction room and a fruit warehouse - but spent the last 45 years as a very grand staircase as part of Bristol Old Vic’s Front of House space.

Bristol Old Vic’s Chief Executive Emma Stenning said: “We searched for the right catering partner who would work with the kind of creative flair that a theatre demands. This is a big step towards the future success of Bristol Old Vic and having worked with Fosters on events of our own over recent years, I couldn’t be more pleased than to be making this move in partnership with a local company and a brilliant group of people.”

Picture caption: Tom Green (Executive Head Chef at Fosters) Neil Lodge (Fosters CEO) Emma Stenning (Chief Executive Bristol Old Vic) Erick Muzard (Commercial Director Bristol Old Vic) - Photo by Jon Craig

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