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Top players boosted by acquisitions

CONTRACTS LEAGUE Purchase of McNicholas Plc lifts Skanska n Consolidation at the top brings growing regional firms into the picture

THE UK operation of Swedish titan Skanska has boosted the firm's late bid to top the 2006 Contracts League title with the acquisition of McNicholas Plc for £50 million.

According to Emap Glenigan, McNicholas Plc won seven contracts worth £100,000 or more during the 12 months to November 2006, wor th a total of £92.4 million.

All of these are civils jobs, a sector top 10 that did not feature Skanska, since it had not won the three or more contracts required for entry. Skanska meets this criterion with the inclusion of the McNicholas Plc order book and promptly shot into fourth spot.

Skanska has also edged closer to second-placed Carillion in the annual table, which, as a guide to the health of the industry, shows that order books are booming. Eight of the top 10 ranked contractors all have 12-month rolling totals of £1 billion or more.

With a month to go, Balfour Beatty's place at the top looks unassailable unless major contracts drop out of the firm's rolling total.

Like Skanska, Balfour's and Carillion's totals for the past year have been boosted by acquisitions, of Birse and Mowlem respectively. Galliford Try also owes a slot in the top 10 partly to the takeover of Mor rison.

This consolidation has led to a number of well-established names that were fixtures in the top 50, such as all the above targets and other smaller outfits that occasionally featured in the lower reaches of the table, all disappearing and being replaced by growing regional firms.

The likes of Apollo, Ardmore, Higgins, Dean & Dyball, Midas and Leadbitter are all likely to end 2006 in the top 50. Not so long ago a place in the top f light was usually brief for such firms.

Three more well-known regional firms - Haymills, Pearce and Geoffrey Osborne - are also well set in the top 50 and other emerging firms are starting to feature in the lower reaches on a more regular basis, such as Essexbased McLaren.

Amey has not won Birmingham City Council's £2.2 billion roads Private Finance Initiative concession, as last month's contracts league had it, but is at best and final offer stage, along with another bidder, the Birmingham Street Services consortium.