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Opco takes stock after rapid growth

PROFILE

Opco has grown rapidly in its five-year history, but managing director Nigel Coulter is now reining in his expansion plans. Steve Menary finds out why

ONE PROJECT can often make a contractor. Nigel Coulter, managing director of Cardiff-based Opco, is all too aware of this.

Opco was only founded five years ago, around the time that Brunswick Construction went down. Brunswick had been lined up as Westbury's cont ractor on the first phase of the house builder's £90 million Century Wharf scheme in the Welsh capital.

Opco's founder, Nigel Kelly, had tried and failed to lead a management buyout of Brunswick just before the f irm headed south, and a deal with his new contracting outfit was swiftly sealed.

'Westbury wanted the job finished and it has been built up from there, ' he says. 'The first phase was taken on as a management contract and then we negotiated the second phase. There was a bit of a hold-up after Persimmon acquired Westbury but now we've got a letter of intent for phase six.'

Opco had a couple more jobs when it was formed but Century Wharf, which with 1,076 units is one of the largest residential schemes in south Wales, was easily the biggest.

As a result, the firm bent over backwards to make it work and threw out the concept of the construction programme.

'Ideally, you want to work from the top f loor down but we've had to work the opposite way so we've really looked into the process of building apartments, ' says Mr Coulter. 'The build is quite repetitive and once you've got it watertight there are 1,000 kitchens and 2,000 baths to go in and so on. We developed a matrix and a sequence of 20 activities, one of which has to be finished each week.

'We wanted to break down the whole thing or else you lose focus. Luckily, everyone has bought into it and no one talks about the programme any more, everyone talks about the matrix.'

Mr Coulter's work on the project led to his promotion to first operations manager and then to managing director of Opco.

For the firm, the deal led to another contract to build Wimpey's Isis development, a 250-unit scheme, valued at £24 million, on a site adjoining Century Wharf.

From a standing star t, Opco tu rned over £41 million in the year to August 2006 - up from £27.8 million in the previous year, when turnover hit a hiccup due to the Persimmon-Westbury takeover.

Opco is also working for Bristol developer West Mark in Cardiff, again on a high-rise housing project.

Buoyed by the success of Centu ry Wharf, high-rise housing now provides about 70 per cent of turnover at Opco.

With a staff of around 90 people, Opco is the largest part of a holding company called Nevrus, whose shareholders include Mr Kelly and Mr Coulter.

Including Opco, Nevrus employs around 130 people and also comprises Ballantyne Homes, a housing business, which aims to build 100 homes a year within a couple of years, and a property operation, Propco. Ballantyne is run by ex-Kier man Peter Jones, who set up Opco and Nevrus with Mr Kelly.

A recent reorganisation saw Mr Coulter's promotion, with Mr Kelly taking over as chairman.

Both are shareholders in Nevrus, along with Mr Jones, James Coombs, the managing director of Propco, and the group's finance director, Stuart Epps.

The reorganisation will allow Mr Coulter to focus on running Opco, which undertakes mostly design and build work.

'We also do an element of refurbishment and some office work, ' adds Mr Coulter.

He is not looking to expand the business too far outside south Wales, although Opco has worked across the R iver Severn in places such as Exeter for key clients. But the business's successful relationship with the client at Century Wharf has been vital.

Westbury was the original client but the scheme has now been taken over by Persimmon's high-end housing arm, Charles Church.

Opco is looking at other Charles Chu rch projects at Rodney Parade in Newport and Swansea.

At one point, Opco's management had been anticipating that turnover would hit £60 million this year but Mr Coulter has reined in the expansion plans.

'We're settling for around £35 million a year for the next three years. We had targeted £60 million, but we knew that would be a tall order, ' says Mr Coulter.

The capping of the work load at this level will allow Mr Coulter and Opco to concentrate on growing other business and establishing a sustainable base.

This includes setting up a training scheme that will see six apprentices join the business.

'We seem to have a real problem in finding surveying staff in particular, ' says Mr Coulter. 'So many of them seem to be freelance now.'

Opco has also set up framework deals with key subbies, including Reusser for brickwork, CMB for plumbing, Whitehead for electrical, WK for plastering, GE for carpentry and Don Hayes for formwork.

All of these firms are local - that is why Mr Coulter prefers not to go too far across the Severn.

This is not parochialism, he insists, but common sense, and the work is there to support this.

The Century Wharf scheme is on Dumballs Road in the Welsh capital.

Apart from the Wimpey scheme, David Wilson Homes is looking at developing a housing scheme there and Mr Coulter already has his foot in the door.