Scott Wilson chief executive Hugh Blackwood on trading in a challenging environment, international opportunities and Crossrail
10: You said in your preliminary results last week that you were still in “a challenging trading environment”. So how are you seeing the market?
I think we have seen the worst of the impact [of the economic downturn]. We have had to deal with the demise of the UK commercial property market and similar symptoms around the world. We have taken the pain, have got a new management structure, and have unfortunately had to make around 550 redundancies worldwide.
20: You also said that your geographic diversity, specifically in growth regions such as China and India, would see you through the recession.
There is no question about it, India and China are growing and there is little effect of the recession there. In China there is a resurgence of work in Hong Kong on top of the work on the mainland and there is an enormous spend in India - there is simply so much to go at.
25: There is a lot of work in China, but don’t British firms find it hard to win it? And when they do, is it not hard to get your money?
The diff erence is we’ve been in mainland China for 15 years. What you can’t do is run away from the UK recession to China. And when it comes to getting paid, China is one of the easiest markets for revenue collection. Certainly compared to Dubai!
30: Is the Middle East bad then?
We have written off our investment in the World Islands which have been postponed indefi nitely. But its pretty good in Abu Dhabi and Kuwait. Saudi Arabia is growing, but getting people to work there is not easy. The Saudis need to improve their contractual approach.
35: Back in the UK, what is exciting you?
One thing that is going to come out of this recession for sure is a clearer focus on sustainable development. So the whole area of environment and natural resources is big for us. Also, we are trying to use our position in nuclear decommissioning to get into nuclear new build, and renewable energy is a growing market. Rail will also continue and we have done very well so far on Crossrail.
40: You’ve said your heavily involved in Crossrail. Will the project remain on track?
Crossrail will be a wonderful barometer of the next government’s appetite for investment in infrastructure. I can’t see them cancelling the planning work. But we are currently anticipating a cut in public spending on infrastructure.
50: What are you going to do about that?
Things we can do are to start looking to those sectors that will be safer clients where you can build long term relationships and the regulated sectors such as water and waste. The government is also obliged to get projects on the shelf. In the United States, President Obama’s fiscal stimulus is stalling because the projects are not ready. It’s the same here, where the A46 widening is one of very few schemes ready.
60: Are you expecting growth this year?
Our growth plans are outside the UK in the short term. Overall, we’re not expecting too much growth; international growth will continue but that will probably be compensated by the flattening of the UK market.