Sweett Group’s new chief executive has said the decision to sell its Asia-Pacific business was taken to balance the books following a difficult period for the consultant.
Douglas McCormick insisted the decision was “not a fire sale and not a sale at any price” and that the group was engaging with a “number of interested parties” and hoped to be finalising a sale by the end of September.
“It needs to be at the right price,” he said. “That allows us to redress our balance sheet, reduce our debt and focus on the European business.”
The sale of the business is likely to result in a £3m writedown and comes after Sweett revealed a 90 per cent slump in half-year profit for 2014/15.
Mr McCormick took on the top job at the 1,500-strong consultancy in March following the early retirement of Dean Webster last October.
Speaking to Construction News, he admitted facing “a number of issues” upon taking up the role, including an ongoing Serious Fraud Office investigation into alleged bribery in its Middle East operations, dating from 2013.
Mr McCormick was candid about the impact the investigation has had on the company, adding that the recommendations of an internal KPMG review of its governance were already being put in place.
“There’s a great deal of work we have done already in terms of governance and compliance. There’s a new look to the board and a new feel to it.”
In recent months, along with the appointment of Mr McCormick, Sweett has set up a separate governance function and brought in John Dodds as non-executive chairman and Alan Lovell as senior independent director in a shake-up of its board.
Mr McCormick has already identified a number of areas in which he would like to see Sweett’s business grow.
Having previously been managing director for Atkins’ rail business, he is already eyeing the growing pipeline in a sector he knows well.
Citing Network Rail’s commitment to £38bn of investment in the UK network to 2019, Mr McCormick said: “Clearly there is a large pipeline and we currently have a share of that; I’d like a bigger share of that.
“That investment plays to our strengths and sits very comfortably with where I come from.”
New nuclear projects was another area of possible expansion, with the chief executive admitting that Hinckley Point C was a project “we would expect to be involved in”.
However, he warned that the general election must not derail government commitments to infrastructure spending.
“The one thing I hope is we won’t have a stagnant period where it takes months to form a government and we have a hiatus [in investment].
“Uncertainty often means investment goes on hold.
“Our order book for today is fine but if investment is on hold because the government is on hold, at some point in time it will grind to a halt and I don’t want to be in that position.”
The situation would be helped, Mr McCormick said, by having a dedicated infrastructure minister “who sets a policy that looks at funding beyond a single term of any government and allows the industry to invest”.
“We’ve had a stop-start approach to investment from government over the years.”
He also criticised those proposing that the UK exit the EU.
“Any notion that we should leave the EU is bizarre,” he said.
“I can’t see how we can be a player in the global market and absent ourselves from our neighbours.”
As a member of the UK Commission for Employment and Skills, Mr McCormick was critical of what he called “a game with politicians trying to outdo each other” on apprenticeship numbers.
“We need to get a real apprenticeship programme where the focus is on quality, not numbers,” he said.
“I’d like to see encouragement for Level 3 and 4 apprenticeships.
“I want to see proper training and not see apprenticeships being dumbed down.”
He praised Labour’s plans to introduce rules requiring firms to employ apprentices when they win government contracts, but added that this had to be contractor-led.
“I think governments should leverage their procurement power to drive their skills policy.
“But we should have a demand-led approach to skills, not supply-led.”