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Stent spreads its wings

PILING - Stent's acquisition of vibropiling contractor Pennine this summer marks a resurgence in the company's international ambitions.Steve Menary reports

ON MEETING Graham Wren, he offers his left hand.

Is it a secret sign; one that signifies his membership of a clandestine society for piling contractors?

The Stent managing director is also the chairman of the National Specialist Contractors Council but an explanation is soon evident on glimpsing his right hand, where two fingers are bound and pinned.

The result of a recent motorbike accident at Brands Hatch, Mr Wren is more embar rassed than looking for sympathy; partly because he was riding a friend's motorbike at the time.

Over two decades into his career at Stent and nine years after he took over as MD (see below), Mr Wren has just engineered a gear change that he hopes will leave the firm's rivals trailing in his exhaust smoke.

'Our volumes have grown steadily since I got here, ' he says. 'When I first joined, we were looking to turn over £1 million and an £850,000 job scared the life out of us.

'Our volumes are up since then and we will probably tu rn over £60 m illion this year but I've realised that there's not many places that we can go now.' Piling orders stand at about £350 million a year according to the Federat ion of Piling Specialists and, by Mr Wren's reckoning, Stent has a share of between 15 and 20 per cent of that total.

The firm is also one of only three manufacturers of piles in the UK.

Having tried but failed to merge factories with Aarsleff ? one of the two others, the remaining manufacturer is Simplex ? Stent has little room for manoeuvre in UK piling.

Mr Wren identified three options to grow the business. The acquisition of vibropile outfit Pennine £8 million in August fits all three.

'Organically, there's nowhere to grow here and the only way to do that is to develop other types of piling, which we are doing, ' he says.

'Another way is to grow geographically, and there's always a price to pay for that when you try and muscle into someone else's market. The only other way is to acquire a company.' The firm has made other acquisitions, notably the £5 m illion takeover of Hercules f rom Swedish owners NCC, that took Stent into pre-cast piling in 1992.

Th is is the f irst deal clinched by Mr Wren and he sees opportunities for all three of his key criteria.

Between 15 to 20 per cent of Pennine's £16 milliona-year turnover comes from the manufacture and sale of vibro f loats to places such as the United States.

The USA has been an expansion target for Stent's parent company Balfour Beatty for some time and Mr Wren wants to exploit Pennine's presence there.

He says: 'I see the USA as a strategic area for Pennine. If one company is developing a link in a country, we see that as an opportunity for another company.' Stent beat a hasty retreat from the Middle and Far East in the late 1980s after a torrid period but has returned to Dubai via a joint venture between parent company Balfour Beatty and local outfit Dutco.

Stent will introduce Pennine to Dubai and will use the Lancashire-based firm's ground stabilisation work in Spain with Geocisa ? a joint venture with Spanish contracting giant Dragados ? to look at Iberia.

With Balfour established in Hong Kong after buying Skanska's half-share in local contracting outfit Gammon, Mr Wren will also look at a move to the Far East.

Venturing to the Far East will not be under taken lightly as Mr Wren's brother had a bad experience working in the region.

Cliff Wren was working for Westpile when the firm's biggest client cancelled a host of contracts due to problems elsewhere and he had to retu rn to the UK.

He returned to work at Stent and has a desk just two doors down from his 49-year-old brother at the firm's Basingstoke offices.

This new building is next door to a site occupied by Balfour's road maintenance operation and also serves as Stent's southern operat ions.

Stent's contracting arm works out of Balmore, north of Glasgow, where the firm manufactures 150,000 linear m of piles a year.

Stent's main plant at Bottesford near Grantham manufactures 650,000 linear m of piles a year and was only opened after an attempt to merge with rival Aarsleff failed.

Stent had outgrown its then factory at Somercotes in Derbyshire and wanted to merge its operations with Aarsleff's factory near Sleaford. Despite the shortage of piling producers, the deal passed through the Monopolies Comm ission, only for Aarsleff to back out.

'We got a long way down the road and at the 11th hour, they decided not to go ahead, ' Mr Wren says.

He is uncertain of what happened. 'I'm not sure either company suffered, ' he says.

With such a large market share and 80 per cent of the tu rnover com ing f rom just 10 key clients, including Bovis Lend Lease, Sir Robert McAlpine, Balfour Beatty and Stanhope, Stent is on a secure footing.

And stability is the key to the Pennine deal.

The firm's two biggest shareholders, Andy Russell and Dave Mitchell, are staying with the business in a consultancy role only but managing director Arwel Williams, who also had a minor stake, is staying in his post and the company's name will also remain.

Mr Wren wants to use this stability to expand the new subsidiary's ambitions. 'Pennine wanted to grow to about £20 million turnover a year over the next three years, ' he says.

'Ou r view is that being par t of Balfou r Beat ty we would look to exceed that and be up to £25 million or even £30 million in that time.' By then , Mr Wren's st int as chairman of the NSCC will have run its course.

He hopes to have made an impact by improving payment times and tightening up membership rules ? his two main priorities before returning full throttle to Stent.