CONTRACTORS doing more than 60 per cent of their workload through frameworks, partnering or negotiated jobs could be making a mistake, according to Adrian Dyball, the chief executive of Hampshire-based contractor Dean & Dyball.
The share of D&D's workload that came through nonadversarial procurement hit 40 per cent and helped the firm grow for a 10th consecutive year in a row.
Mr Dyball said: 'That level has been our target for a number of years and it's good to be between 40 per cent and 60 per cent with our mix of work. Below that would be a concern but if it went higher there's a danger that you don't know where the market is.' Mr Dyball's policy of steady organic growth has again paid off, with pre-tax profits up by £545,000 to £3.1 million in the year to September 2005 on turnover of £184.7 million ? up from £168.3 million.
With orders at a record level, D&D is targeting a workload of £220 million in this financial year. With operating prof its up £902,000 to £2.9 million, margins at the firm rose from 1.2 per cent in 2004 to 1.6 per cent last year.
Mr Dyball added: 'Between 1.5 per cent and 2 per cent is good.
'If we did more development or rail work, then I'd expect the margin to be above 2 per cent but if we did more building work, then it could drop under 1.5 per cent.' The firm, which employs around 1,000 people, has set up a specialist rail subsidiary for jobs with the likes of Network Rail and Tube Lines and expects turnover to hit £30 million this year from about £25 million in 2004.
Around half of D&D's workload is building-related and includes industrial and retail work, jobs for house builders such as Laing, Westbury and Pegasus and a framework deal with Hertfordshire County Council.
In addition to buying a 1,400 sq m office in Bristol, half of which is being leased out to other companies, D&D is building a similarly sized office in Ringwood.