First Engineering is broadening its range of services.
First Engineering managing director Tony Smith is sure that the firm's future success means moving beyond the core business inherited from the Scottish Infrastructure Maintenance company. As the publicly owned British Rail maintenance arm, SIMC looked after all Scotland's rail network. Following the management led buyout at privatisation in 1995, it was left with contracts of up to seven years to continue this work; of the firm's £95M turnover, £85M came from infrastructure maintenance
Two and a half years later, things have changed, says Smith. 'We realised that while we had to enhance the business, we could not just stay in Scotland. And our emphasis would have to change from simply infrastructure maintenance.' Today around £80M of the firm's £120M turnover comes from the business First began with.
Smith wants to get the best from the company's maintenance work- in the knowledge that for each year of First's guaranteed contracts, the returns get tighter and tighter. The industry, he says, is changing - no longer budget driven, but focused on the need to get the best solution for the problem. Best does not mean the most expensive or even the cheapest - it means meeting the client's business requirements, he says.
First has changed the way it works to meet this need and, says Smith, since privatisation it is spending much more time planning work properly with a workforce which is better motivated towards the needs of the client. 'There is more ownership and more pride in the work we are doing now,' he says. 'We are more focused and you can see the results in the improvements in reliability on the network.'
However, it is project services that Smith sees as the source of growth and a way to protect the business through diversification. Project services cover signalling work, depot construction and associated civils work, its consultancy business and track renewals. While First remains wholly devoted to the rail industry, it now also has the capability to design and carry out more run of the mill civils tasks.
Moving into these areas also demands venturing outside of Scotland. 'We need to be based locally as it makes working much easier and provides a much better interface with local clients,' says Smith. First has now handled work throughout the UK, from Cornwall, through Wales to Newcastle.
The firm has expanded to open its first regional office in Manchester which has quickly increased its staff from five to nearly 30.
Nationwide, First has nearly 2,000 people on its books. Expanding further is certainly Smith's goal, and while he does not rule out acquisitions entirely he thinks it is more likely growth will happen organically as 'consolidation of the industry is now virtually complete'. So concentrating on developing and getting the best from the existing business and staff is vital.
'In the past, the industry suffered from British Rail not investing in its people,' says Smith. 'We are now training and investing in these skills and so far we are not finding any shortage of good staff.'