Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Weeks' man of the world

PROFILE

For Phillip Hill, working under Gadaffi in Libya has proved less frustrating than insurance costs and staff shortages in the UK, writes Steve Menary

PHILLIP HILL is confused: not about his role as chief executive of Weeks, the quoted consulting engineer, but why his company is being hammered so hard for insurance premiums.

He sets off at pace to explain the predicament that Weeks and so many other firms face as insurance companies pass on the mammoth costs of the terrorist attacks in New York and Washington DC on September 11, 2001.

'Our issue is that we've seen a 300 per cent increase in premiums and it is only 300 per cent because we've mitigated it by raising our excess. If we hadn't done that, we would have been facing a rise closer to 500 per cent, ' he explains with exasperation.

'We used to have an excess of £25,000. Now it's £155,000 so why do I need insurance when the worst claim that has ever been made against this business was only for £65,000? That's what I don't understand.'

Weeks turned over £19.5 million and made a pre-tax profit of £1.2 million in the year to March 2001, when insurance costs were £150,000.

The firm's insurance cover has since rocketed to £500,000, hammering profitability. Pre-tax profits have been reduced to £354,000 in the half year to October from £503,000 in 2001, despite turnover rising £1.5 million to £10.6 million.

Mr Hill is particularly frustrated as 40 per cent of Weeks' business comes from testing construction materials, which he does not see as needing such great cover for liability.

'The client bodies have to look again at the levels of premiums that they are asking for, ' he says, warming to his theme. 'Why do they need £10 million-worth of cover for a £300,000 contract?

I'm having to factor an extra 3.5 per cent into our costs to pay for it so in the end it's the clients that pay.'

A talkative, friendly man, his entire career has been in consulting since joining Maidstone-based building services engineer GH Buckle in 1960.

Mr Hill did a four-year sandwich course and stayed for a further 12 months as part of a gentleman's agreement to remain with Buckle for a year after his course.

But he soon left for a job with London rival, WA Troake, then moved again in 1966 to another consultant, Kenneth Stead, to take up a post in Libya.

'I was there when Gadaffi kicked out King Idris and the Egyptians. All the admin staff were Egyptians and they were packed off on gunboats, ' he recalls. 'Gadaffi only had something like six tanks and four planes and they used to travel back and forth across the country every day to Egypt on one side and Algeria on the other so they thought he had more firepower than he really did.'

Stead was working on a subcontract basis for Arup and eventually lost the work because the deal was another gentleman's agreement, not a contract.

In 1976, Mr Hill moved to surveyor Widnell Trollope and started a mechanical and electrical division - a move that was to prove useful many years later when he was running his own business.

He explains: 'I didn't quite understand contracts at the time. Around 40 per cent of a major hospital was M&E and no one knew how to control the costs.'

He was still working on international jobs in Brussels and Luxembourg and after four years was off again, this time to Oman, where he set up a company, Majan Engineering, with a local businessman.

He took his wife and boys, then aged seven and five, and stayed for 10 years, working on the Sultan's royal palace. He even ran a school in his spare time.

'I didn't want to send my two boys off to boarding school because we didn't come from that background, so we set up our own school, ' he adds.

'But when oil prices collapsed in 1987, the expat community disappeared. I was faced with a school with more teachers than schoolchildren so we had to close it down.'

After thrashing out yet another gentleman's agreement to set up a UK office of Majan, he was all set to come home when, with three days to go, his business partner abruptly changed his mind.

A determined man, Mr Hill left with nothing more to show for his time in Oman than two Range Rovers. He still owns a 49 per cent stake in Majan but acknowledges that it is worthless unless he returns, which he has no intention of doing.

Returning to the UK, he took a job with consultant Lawrence Hewitt which was one of Weeks' first major acquisitions.

Mr Hill says: 'When we were bought, I was offered the position of group commercial director. They thought I was good at the business and it got me on the plc board but I'd already told Dr Weeks [the firm's founder] and Richard Pugh [then chief executive] that I wanted the top job.'

This came when Mr Pugh resigned in April 2001, a move that Dr Weeks emulated in March 2002 after floating the firm on the Alternative Investment Market in 1996.

Mr Hill does not seem entirely convinced of the benefits of flotation, admitting that the initial price of 5p was too low and the company has relinquished ambitions to move onto the main market. He is even more frustrated with the scarcity of staff, particularly for its asbestos testing division, which has the potential to double turnover this year to £800,000.

'It's a five-year market before it hits its peak, then it's going to settle down. But we can't get the staff. To get a good quality surveyor, you need someone with experience and then nine months' training.'

Acquisitions are still on the horizon and Mr Hill was recently spent six months negotiating to buy an Irish consultant, but the owners pulled out at the last minute.

But difficulties integrating Weeks and Lawrence Hewitt have convinced Mr Hill that major deals need to be done properly.

'The issue is management, ' he says.

'Acquisitions are great fun but if you don't manage them properly, it can be horrendous. I've certainly learnt some lessons.'