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Ambition drives Thomas Vale on


There is no hiding Tony Hyde's goals.The group director wants to grow Thomas Vale Group by 20 per cent a year for the next five years.He tells Steve Menary how he plans to achieve this, and why he hates standing still

RICHARD Sapcote, owner of Midlands-based William Sapcote, suggested Thomas Vale's group director and head of its construction arm Tony Hyde was trying to do things differently.

Founded in 1869 by civil engineer Thomas Vale, the firm wants to embrace change but stay a regional business.

'In the last 10 years, the construction industry has probably changed more than in the previous 100 years, ' says Mr Hyde.

Mr Hyde must balance change with satisfying venture capitalist 3i, which has a 45 per cent stake in the firm.

This holding came after Mr Hyde and four other directors led a £2.2 million buy-out of Thomas Vale with 3i's support that was sealed in 1992.

The group turned over just £16 million a year then but in the year to March 2003, turnover grew £12.5 million to £71.9 million with pre-tax profits up £375,716 to £1.6 million.

'The beauty of having a venture capitalist backer like 3i is that you cannot sit on your laurels. If your ambition is to stand still, you can't attract good people. I'm ambitious, ' says Mr Hyde.

Two years after the MBO, Thomas Vale bought £2 million turnover civil contractor Fitzgerald for £600,000 and followed this in 2002 with the acquisition of lighting contractor Paul Adams, which contributed a £94,914 operating profit on £1.4 million turnover last year.These deals were followed by the purchase in April of contractor Collier & Catley.

The Reading-based firm only turned over £8 million in the year to May 2003 and pre-tax profits fell from £245,063 in 2002 to £174,399 but workload is expected to hit £15 million this year.

For a company that wants to keep its core business in the Midlands, moving into Berkshire appears strange but Mr Hyde and the board want to grow the business.

Mr Hyde says: 'We've got a lot of clients in Oxfordshire and Buckinghamshire asking us to work for them.

Reading will give us a chance to cover those areas but Collier & Catley also has an established client list.'

Thomas Vale has an operating margin of 2.1 per cent, but Mr Hyde is aiming higher.And he wants to get to £200 million turnover in five years - a growth of 20 per cent a year that will be a mix of organic growth and acquisitions.

He says: 'Clients won't let you make excessive profits unless you put something into the pot for them.That's why we're looking to differentiate ourselves from our competitors and that goes back to 1992 when we had our houses on the line.'

To differentiate the company, project teams are kept together on jobs, which allow the workforce to build up specialisms, such as schools or housing repair work.

He is proud of his workforce for winning a cupboardfull of trophies since the MBO, including a hat-trick at the Construction News Quality in Construction awards in 2000.

Having spent time working with the US Army Corps, Mr Hyde decided to look to the US for inspiration and visited Detroit in 2002, taking in £1 billion turnover US construction giant Walbridge Aldinger, as well as other companies, such as Kodak.

'The training over there was miles ahead of the UK. It was done for construction firms by construction firms, ' he explains.

'In the UK, the bloke at the top makes all the decisions. In the US, they've been doing partnering for 10 years and have fully integrated supply chains and flat management structures.

'Out there, if you're getting a fair bit of money you're expected to make decisions.'

Thomas Vale spends £500,000 a year on training and has established a school that focuses on site staff and managers.

His entry into construction saw him leave the catering industry, which all his family had previously been involved with, for a £3 a week apprenticeship with Thomas Vale in 1971.

After four years of training, he started as a project planner before a combination of the added responsibilities of marriage and lack of a decent pay rise saw him leave in 1977 for Wimpey, then a civil engineering giant, where he worked in Saudi Arabia, Iran and Yemen on US Army Corps jobs.

Following a spell at Bryant and a brief period at Westbury, he rejoined Thomas Vale in 1981.

Thomas Vale himself died in 1902 but his family ran the firm until 1958, when a succession of owners that Mr Hyde bluntly describes as 'asset strippers' took over until steel-frame manufacturer Metsec bought the business in 1985.

Everything went well until the recession at the end of that decade, when Metsec's core office-building market collapsed and the firm started to struggle.This gave Mr Hyde and the management a chance to buy the business and, as part of the deal, all the directors agreed only to sell their shares in the business to existing employees.

Only Mr Hyde and group commercial director John Insall remain active within the business from the MBO team, although Mike Kitchen has retained his holding since retiring in the late 1990s.

Two of the original team, Tony Ingram and Mick Plimmer, have retired.Their stakes have been split between new group finance director Colin Briley and two directors, Peter Wardman and Bob Atkinson, who have worked their way on to the board since joining the firm in 1989.

'We allowed the other directors to buy the shares to incentivise them and allow them to share the growth, ' says Mr Hyde, who is certainly not looking to retire yet.

He is far too down-to-earth to see himself as a replacement for the 'boring men in grey suits' but reflects wistfully: 'I just wish I was 10 years younger.'

At 49, he still has time to realise his ambitions before settling back to look for a different sort of performance from his beloved Wolverhampton Wanderers.