Ferrovial has revealed a new strategy to target work in its own right and start to look at smaller projects as part of its aim to double revenues from construction work in the UK within five years.
Ferrovial managing director for UK and Ireland Karl Goose told NCE that the strategy was not just about growing the turnover but creating opportunities for its employees to grow within the business and develop their skills.
The firm recorded revenues of £345.4M in 2019 and Goose said that the 2020 figures set to be released soon will continue to show a positive trend, as well as a return to profit. Under the new strategy, Goose hopes to grow that to £750M by 2026 with staff numbers increasing from 560 today to 800 to 900 in the same time frame.
In the past the firm has worked solely with joint ventures on contracts valued at £1bn or more but now Ferrovial intends to target work in its own right with a focus on projects valued up to £300M.
After 18 years working in the UK market, Goose described the UK arm of Ferrovial as a local business now but “with the backing of a parent company with a lot of liquidity”.
“Ferrovial is really well positioned in the UK and we feel we offer something unique,” he said.
“We are a major contractor and we have to pick our jobs where we believe we can add value to the client. We are not into a race to the bottom on fees. Nowadays, our clients are a lot more nuanced in how they procure their work so I think the risk/reward strategy is more sensible now than it was a few years ago. That is certainly opening up the opportunities to deliver for the clients.”
According to Goose, the business is also renowned for cost control and innovation and will bring that focus to the smaller end of the market.
Goose has said that the business will also target new sectors such as rail under the new strategy and here it will look at smaller projects but generally it will target schemes in the £40M to £50M up to £300M bracket.
The new strategy to grow the business was developed last year, according to Goose. He explained that there were three elements to the growth strategy. “The first was to get the business back to profitability, the next was around communications and thirdly, and mostly importantly, was the people,” he said.
The people part is a key aspect of Goose’s growth ambitions. “If you’re an engineer on a £50M or £100M project, your experience level is great – you get to see a lot more aspects of the job and you can get more involved in the financial side,” explained Goose. “It is a great opportunity for people to develop. Our staff love the big projects – and that is a our bread and butter – but smaller schemes will give them more rounded experience.”
In terms of the challenges facing Ferrovial in meeting is financial ambitions, Goose said that he is confident “given a fair wind behind them” and “subject to the right opportunities” the aims are feasible. “The UK is looking healthy for infrastructure growth,” he said. “There is a great opportunity for the industry and a great opportunity for people out there.
“The opportunities are there in the UK market but I think staff are a risk,” he said. “Not just for us but for the industry as a whole and that is why this new strategy is important for us. As an industry we need to more collectively to promote construction – we are doing a lot of things but we still need to go further.”
Department of Civil EngineeringDepartment of Civil Engineering – International Burch University (ibu.edu.ba)