Engineering contractor Barhale will show a return to profit when it reports its 2010 results in April, its chief executive has predicted.
Mark Cutler, who joined Barhale as chief executive last August from Morgan Est, said the company had a target of getting back to 2008 levels of £150 million turnover this year.
He said the four to five-year strategy was to double turnover to £300m and increase the operating margin to above 4 per cent. “That’s quite realistic, even in the current market conditions. I’d like to do it quicker and the opportunities are there, but it’s also very competitive,” he told CN.
The water industry accounts for 70 per cent of Barhale revenue. Mr Cutler said he wanted this to fall to about half, as its work in energy, waste and general civil engineering increased. “We want to make sure we have sufficient spread across sectors. Energy and waste are the big areas.”
He said he had set a target of £50m revenue from waste. “We’ve made really good progress, better than I have made in previous organisations. In the next 12 months, I want to be working on two or three waste projects,” he said.
“I don’t see rail as an area where we see aggressive growth - we have made good progress and want to consolidate that improve our performance,” he added.
“We have a very integrated business and it was clear that customers did not want to see change. However, we want to develop our integration further, strengthen project management and set up more joint ventures.
“Utilities and M&E are two areas I want to develop: I want Barhale to be as well known in these areas as it is in civil engineering and tunnelling. We have a track record in M&E and I think we can rebuild it organically - [chairman] Dennis [Curran] and I are very passionate about it.”
“We would look at acquiring niche bolt-ons if the right opportunity comes along, but we are not looking for acquisitions to fill gaps in our strategy.”
He said that turnover had been affected in 2009 by a slow start to AMP programmes in the water sector, and though it had dropped further in 2010, the company had returned to profit. “It was a difficult year, particularly in the first half, but we have set a good platform for 2011 and onwards.”
The company is still in the process of restructuring, taking out a layer of management between the board and business units with the centralisation of support services. “Anyone who has worked with me knows I don’t believe in central control, but I do believe in consistency across empowered businesses.”
Last week, the firm announced that two former Morgan Est managers had joined: Ian Bailey as southern director and Mark Millington in the newly created role of engineering director.