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Bouygues widens UK plans

Hampshire purchase signals move away from London and beyond mainly PFI work

Bouygues is promising further raids on regional firms as it looks to carry out more contracting work and expand from its London stronghold.

The French firm has been in the UK for a decade but this week’s deal to buy Hampshire contractor Warings marks its first real assault on the domestic contracting market.

Its previous three deals here, including street lighting firm David Webster, have been made with its FM arm in mind. But the company is now targeting southern England and the South-west to beef up its construction operations.

UK director Ian Gunter said it was also looking to expand into the West Midlands and northern England and that additional deals were on the way.

He said: “We are looking at geographical growth and it’s fair to say we have more -companies in mind.

“We have a team looking at growth in general and our parent has been looking at the UK market and saying ‘come on guys, you know your way around now, how about moving forward in a market that is the second biggest in Europe’.

“We want to spread geographically and look at different procurement methods.”

Bouygues is best known for carrying out PFI hospital and schools work in and around the capital. Mr Gunter signalled a change in strategy by saying it is now targeting ordinary design and build jobs.

He said: “If it’s just a job that’s already designed and we’re asked to put a price on it, we’re not interested. But if we can bring our technical expertise to design and build, then we are.”

The Warings deal has been 12 months in the making. Mr Gunter said some of Bouygues management would take a more hands-on role at the Ports-mouth firm, which is keeping its name. The current management, headed by chief executive Len Salter, will remain.

Bouygues, which has a worldwide turnover of £13.5 billion, has revenues of around £500 million in the UK. Construction accounts for just £100 million of this.

In its last set of accounts, Warings posted a turnover of £127 million in the year to April 2006. It employs 240 people and works across a number of sectors including residential, airports and defence.

Analysis

By David Rogers

Bouygues has been something of a contradiction in the UK. For a company whose construction turnover [it is also has a giant telecoms business that sponsors a cycling team in the Tour de France] is more than double that of Balfour Beatty’s, it has always seemed a peripheral player in the UK market.

Its Paris chiefs have now decided to do something about this, albeit after 10 years, and branch out of London and PFI.

It is unlikely to compete for big ticket, high profile jobs. But it is now clear the French paymasters see the UK as more than just a market that carries out a lot of PFI.