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CN Briefing: Sir Robert McAlpine; Tony Aikenhead; civils; HS2

It has been a difficult few years for Sir Robert McAlpine. 

Be it blacklisting, Bermudan hospitals or bad contracts, the company has had bad press and struggled, like many, to turn a profit.

But following its appointment of Tony Aikenhead as its chief executive, is it about to turn a corner?

While not quite relinquishing the family grip (McAlpines still dominate the supervisory board), Mr Aikenhead’s appointment was a sign that the dynasty recognised the need for change.

Construction News reported on Friday that the firm wants 20 per cent of its work to come from civils by 2019 (when it will mark its 150th year).

This was revealed at the same time as the company recorded another heavy loss, this time £51m in 2015.

The year before, it had made a pre-tax loss of more than £60m loss which was blamed primarily on a disastrous high-end resi job at Fitzroy Place for Exemplar.

Rewind another year and it was blaming a Bermudan hospital PPP for a £38m loss, while in 2011 the group’s profits hit a seven-year low.

Tough times for a firm which is one of the few top contractors to attract national interest, even if its blacklisting past and financial struggles have led to greater negative press in recent years.

The London resi market has also left the contractor licking its wounds and it will no longer enter into fixed-priced contracts in residential fit-out as a result.

But is this 20 per cent civils target the first step on a road to balancing its portfolio between civils and buildings?

Probably not. If you look at the man heading its organisation today, not only was Tony Aikenhead brought in to lead the successful construction of the Olympic Stadium, he spent the best part of the previous decade as intenational head of building at Swiss healthcare firm Hoffman La Roche. So buildings are in his blood.

More likely, this is in recognition of the increasing output to come from infrastructure and its worth in a balanced portfolio, as well as the volatility of the London/residential market.

On major projects like HS2, McAlpine is already pre-qualified as part of the Align JV for four civils lots worth a combined £5bn, as well as one enabling works lot.

That could represent the first significant boost in its 20 per cent aspiration as early as the first quarter of 2017, with roads spending also likely to be a target.

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