Bam Nuttall chief executive Steve Fox has been in post for just over a year. Since then he has seen the company’s order book jump close to £1bn and found himself one of the champions supporting Infrastructure UK. Jackie Whitelaw went to meet him.
Bam Nuttall chief executive Steve Fox has a busy year ahead of him. First up he wants to see his order book rise significantly to sustain the business through what everyone recognises are going to be a tough couple of years.
And on a personal front, following publication of Treasury body Infrastructure UK’s plans on how to drive down infrastructure costs, Fox is one of the industry experts appointed to help push the reforms forward.
The day job has gone pretty well in the 12 months since he was appointed to the top job at Bam Nuttall last April.
The firm’s annual results published two weeks ago revealed turnover has increased 7.9% to £695M while forward orders have shot up 35% or £252M to £967M.
Big civils contracts
Over the last year the company has focused on winning big civils contracts to counterbalance declines in regional workloads. Bam Nuttall has won major work on the Crossrail station caverns and western running tunnels with Ferrovial and Kier (BFK), and Victoria Underground Station with Vinci. Other deals include the Luton Dunstable Guided Busway, Northumbria Water Framework and a Highways Agency managed motorways win with partner Morgan Sindall.
“For us this year is all about order book,” Fox says. “Five or six years ago as an infrastructure business you needed an 18 month order book - 1.5 times volume - and you were in a reasonable position. But what has changed is that jobs are taking time to come through and have longer construction durations - in some cases seven to eight years - so the order book needs to be bigger.
“Our current order figure looks good, but we are burning it up fast and I’d like it to be a lot more, ideally 2.5 times volume which is closer to £2bn.
“Mind you I’m conservative about our order book. On managed motorways for instance, we’ve taken no orders yet so that is not included.”
Nor is the Hinckley nuclear power station groundworks contract that Bam Nuttall and Kier were negotiating on the day of the Japanese tsunami. Or potential frameworks.
“Our current order figure looks good, but we are burning it up fast and I’d like it to be a lot more, ideally 2.5 times volume which is closer to £2bn”
“But the tender book is busy, particularly for the BFK joint venture for Crossrail. And what you don’t pick up in the next 12 months you’ll regret,” he says. “Bidding is going to be much quieter next year, though consultants are saying that life is coming back into the commercial sector in the south east, so that’s a positive.”
Pretax profit for the last year was down 34.9% to £15.7M, reflecting general economic conditions and tighter pricing. And also, undoubtedly, the reduced interest all contractors are earning on their cash in the bank thanks to current low interest rates.
“But it’s still an industry leading percentage result of 2.3%,” Fox says. Future strategy includes continuing with joint venture bids for large civils projects. “It’s about sharing risk and resource in bidding and execution and creating the strongest team to win the job,” Fox explains. “And bidding in joint venture improves your competitive position. If you team up with someone you might have been going head to head with, you increase the odds of getting something rather than nothing.”
Fox and his Bam Nuttall teams are also using the broader strengths of the Royal Bam group in bids for work on Borders Rail and Blackpool Tram. “On Borders Rail we are bidding as a group with the Bam companies in Holland and Ireland rather than teaming up with other contractors. “Elsewhere we are working with other group companies such as Bam Rail on Blackpool Tram and Wayss und Freytag on Glendoe hydroelectric power scheme.”
Rail is another area of positive news. Bam Nuttall picked up extra work on the Chiltern Evergreen upgrade after Jarvis collapsed. “When we took on Chiltern we didn’t go in to do trackwork and signalling, but we are doing it now. We are learning from Evergreen and there may be times when we bid for permanent way work in future,” Fox suggests.
Highlights for his first year as Bam Nuttall boss are the company’s ongoing work on the Olympic Park which will continue with landscaping through almost to the Games and the wins on Crossrail. “Those sorts of projects are great for our people, they give everyone a real lift.” The trickier aspects are the constant quest to win more work and a couple of challenging contracts - Cambridgeshire Guided Busway included. “But I’m not going to rise to any goading; everything will be resolved one day.”
Fox is just getting his head around his new role as part of the Infrastructure Stakeholder Steering Committee advising Infrastructure UK. He is leading the Industry Group which will work with government to improve industry efficiency and reduce costs. They will examine how supply chain integration, procurement approaches and contracting models can increase productivity and growth.
He does have some early views to share however. “This time we have to do something,” he says referring to the previous attempts at improving the efficiency of delivering infrastructure in the UK that have fallen by the wayside as economic booms took hold.
“The economy now is ripe for this so we mustn’t waste the opportunity. I think the IUK report (NCE 7 April) has done the hard bit in that it recognises that a lot of what needs doing needs some government leadership and that clients have to decide what they want to buy. Contractors are mobile assembly lines and it is difficult to influence change at the contracting point in the chain. However, the industry must support this.”
Innovation is a confusing word, he suggests. “Everyone has an obsession with making things bespoke, which makes them more expensive. It should be more about standardisation as well.”
Steve Fox’s career path
● 1983 Graduates in civil engineering from Leeds University and joins McNicholas. Jobs include an oil gathering station in Oman
● 1987 Joins Rees Hough, working on a water tower, shopping centre, pipelines, cofferdams
● 1989 Joins Nuttall and works on Skegness sea defence, Dovercourt bypass, East India Dock link including Prestons Road flyover - “helping satisfy my need to build bridges!” Then works as agent on Cardiff Penarth Haven landfill and back to London for the A406 upgrade through the Lee Valley including the Lee Valley viaduct. “That was enough bridges!”
● 1997 First joint venture - with Norwest Holst - on the Birmingham Mimworth sewage treatment as agent
● 2000 Moves into contracts/area management overseeing
projects including Cork tunnel
and running Ascon Contracting and the Nuttall central and west London divisions
● 2007 Joins Bam Nuttall board
● 2010 Becomes Bam Nuttall chief executive