Morgan Sindall is expected to pursue “less risky” London projects, including schools and public sector work, following the departure of its construction MD in the capital.
Three directors have left, or are set to leave the company, following the departure of Tony Dixon last week.
Commercial director Martin Pitt, who worked across the construction and infrastructure businesses, has left the company while the roles of commercial director for the London region and construction director for London are now “under consultation”.
Those roles had been filled by Andy Fookes and David Diboll, both of whom will exit the business as a result of the reshuffle.
Sources told Construction News that group chief executive John Morgan wanted a renewed focus on public sector frameworks and schools contracts ahead of ‘riskier’ commercial sector jobs.
The business had suffered from problem jobs, particularly on fixed price work, sources said and would reduce its exposure to commercial sector work.
Despite that, Morgan Sindall will continue to pursue work in the capital, but will up its pursuit of new schools contracts, like its 2014 deal to create1,035 new pupil places with the London Borough of Newham.
Head of construction for London and the South-east Tony Dixon left Morgan Sindall after less than a year with the company last week.
He has been replaced by former Kier managing director Ian Cheung, who now has responsibility for the construction business in London and the South-east, and also the South-west and South Wales.
It has promoted commercial team leader for the north of England Sharon Chrippes to the new role of commercial director of its construction and design division.
Ms Chrippes has been with Morgan Sindall for 18 years. She will report to construction and design managing director Pat Boyle in her new role.
Morgan Sindall is also recruiting a new commercial director for its infrastructure division.
Mr Boyle said: “In ensuring we are both efficient and effective in our management teams, it makes sense for us to streamline the South and South West construction business units into one, which allows for clearer reporting and better use of our experience, resource and market intelligence.”
Cenkos analyst Kevin Cammack said: “[The group said it has] gone on to the back foot and wouldn’t be building on the revenues they had got to in London and certainly wouldn’t be overly competitive on what they are bidding for in London anymore.
“It is now a case of them finding work which is less immune to cost inflation, and from where they can actually deliver a profit.
“In that sense it’s easier to achieve that from the public sector because you’re working to the national cost indices so get some protection that you wouldn’t necessarily get in competitive tender.”
One analyst who asked not to be named, said Morgan Sindall had experience problematic contracts signed 18 months ago, and that the changes could be a direct result of this.
Morgan Sindall is still pursuing contracts with individual clients in London and is also chasing long term frameworks in the south, including the Southern Construction Framework, worth up to £4bn and expected to be awarded imminently.
It is understood that the firm is confident that identified problem contracts will be dealt with in weeks, rather than months, and are unlikely to affect operations longer-term.