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Bouygues UK recovers £50m in revenue

Bouygues UK is set to recover the £50m revenue it lost in 2011 after a surge in housing activity, according to executive chairman Madani Sow.

Mr Sow also revealed to Construction News that he is expecting another 20 per cent hike in housing completions in 2014 and the same again in 2015.

Bouygues UK saw a drop in revenue from £200m in 2010 to £145m in 2011 after handing over two PFI assets and the loss of projects after the government scrapped the £55bn Building Schools for the Future programme.

But Mr Sow said the firm was now heading back up to the £200m turnover mark and insisted that there was no rush to grow the Bouygues UK business, with profit and cash the priorities.

“We’re here for years and years – we have enough time,” he said. “We will be back to 2010 turnover in 2013 thanks to housing.”

The central housing unit, which covers Portsmouth to Oxford, also has ambitions to grow along the M1 and M11 corridors towards Cambridge.

Bouygues UK announced a restructure on Thursday, aimed at raising the group profile. It sees the creation of four divisions; construction, housing, development and Thomas Vale.

It means the other companies Bouygues has acquired, including Leadbitter, Warings and Denne, will fall under the construction and housing divisions.

Mr Sow stressed that the change had not meant any job cuts or office changes and did not compromise the brands.

“We bought the companies for the brand, therefore there’s a brand equity there,” he said.

“We bought the companies for the brand, therefore there’s a brand equity there”

Madani Sow, Bougues

“What we are doing is being clearer to the market and to have a stronger Bouygues UK brand.”

It means the subsidiaries will still bid for work as their own brands.

He said the Bouygues ownership enabled the subsidiary firms to bid for larger projects, with Bouygues working on schemes from £1m to £400m.

Construction News revealed last month that Thomas Vale had shaken up its management structure.

Mr Sow stressed the value of Thomas Vale in the Midlands and the North, saying it had added just two people to 450 staff there and continued to integrate the company, while giving it access to more complex projects.

He said the changes reinforced the Bouygues’ local presence and provided “more possibilities” to staff, along with opportunities to work closer to home.

Bouygues UK structure

Bouygues Development – Headed up by Nicolas Guérin as MD and is focused on mixed-use developments, urban regeneration schemes, residential and student accommodation.

Construction – Led by Lionel Christolomme as MD with a focus on the private sector – commercial, leisure and luxury residential – and the public sector (including PPPs), predominantly in healthcare and education.

Housing – Paul Abson, previously deputy chief executive of Leadbitter, is managing director. The business operates across three UK regions: Central, London, and the South-east, with a focus on residential and mixed-tenure developments, care and extra care facilities, and student accommodation.

Thomas Vale – Headed up by Tony Hyde, the business operates as a specific division within Bouygues UK and is focused on the Midlands.


Mr Sow said there had been some overlaps in back-office positions at the time of the takeover but “not any more”.

There are no plans to expand into further regions or for more acquisitions, he said. He added that Bouygues UK had previously been operating within the M25, but has more of a regional spread now.

“We are exactly where we want to be,” he said. “The market is tough. There is a lot of competition but the UK market is still very important to us.

“Cash and profit are the two most important figures to us.”

Mr Sow said payment was a significant issue for the business and that Bouygues UK generally pays within six weeks.

“On the one side we try to be paid fairly by our clients, on the other side we are committed – and this is very important –  to pay all our suppliers on time, fairly and according to the contract,” he said.

“We are making sure when we choose [subcontractors] that we are choosing the right ones and are monitoring their health,” he added.

Despite missing out on the last academies framework, Mr Sow said education remained a core market. He said the firm was also developing alternative ways to fund schools, such as using local authorities’ land to build housing.

Bouygues is working on a number of regeneration projects, including in Barking and Canning Town.

Regeneration is a key market for Bouygues UK, but Mr Sow said LABV was an ‘onerous’ process that required political commitment.

The firm is also bidding for the Stanmore orthopaedic hospital and in the final two for the delayed Papworth hospital, which is set to use an element of private finance 2.

Mr Sow said the PFI market slowed for “political reasons” and that PF2 is basically a “design-and-build plus” model.

“Cash and profit are the two most important figures to us”

Madani Sow, Bougues

“We have no problem with that because our core business is D&B,” he said. “We have no problem with PF2. The problem with the PFI market today is ‘where is the pipeline’,” he said.

The largest infrastructure schemes, including Hinkley Point C, fall under Bouygues Travaux Publics.

Mr Sow said Bouygues UK was more focused on schemes such as train station refurbishments and projects supporting major infrastructure.

Other areas of construction include retail, working for the likes of Tesco, Marks and Spencer and Morrison.

Bouygues UK is also in commercial, with a project in London’s financial district, and is looking for other opportunities in big UK cities, Mr Sow added.

But he said: “The market we are most interested in is housing.”

He said the company was the fourth or fifth biggest provider of social housing in the country, but did not give a current completion figure.

Construction

London & South East – headed up by MD Arnaud Bekaert and based at Bouygues UK’s headquarters in Waterloo, the region also leads on major projects across the UK.

Western – Rob Bradley, MD, leads the region, including for housing projects, from offices in Bristol, Plymouth, Swansea and Cardiff.

Central South – Regional director Dave Cook covers Hampshire to South West London, based in Portsmouth, Hampshire.

Central North – Regional director Cliff Thomas covers Cambridgeshire, Oxfordshire, North and West London, based in Abingdon, Oxfordshire.

Housing

Central – Regional director Mikel Berrebi, based in Abingdon, covers Portsmouth to Oxford, is based in with ambitions to grow along the M1 and M11 corridors towards Cambridge.

London & South East – Led by MD Graham Brown and divided into two core teams. London, headed up by regional director, John Campion, based from the Bouygues UK Headquarters in Waterloo and South East, headed up by regional director, Nick Brown, based in Sittingbourne, Kent and focusing on an area covering the outer London Boroughs, Kent, Essex, Surrey and Sussex.

Bouygues buys

Bouygues UK has a HQ in London with a regional spread of offices, £750 million in turnover, around 130 sites and 1700 people.
Acquisitions began in 2007 with the acquisition of Warings, followed in 2011 with the purchase of a 51 per cent shareholding in the Leadbitter group which incorporates Denne. In 2012, Bouygues Bâtiment International acquired Thomas Vale as well as the remaining 49 percent of the Leadbitter Group.

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