Cost, management and project management consultant Turner & Townsend has reported a drop in UK revenue for the past year, but an increase in overseas work.
In its results for the year ending 30 April 2010, published today, the company reported a drop in UK revenue of 12% from £127M to £112M. However, revenue increased in Australia (27%), the Americas (2%), Africa (17%) and Asia (7%).
Total revenue for the year was £217M, down 11% from £245M the year before, but profit before tax was up 16% at £17.75M (2009: £15.25M).
As a result, overseas business now accounts for 42% of revenue (2009: 40%), bringing the firm closer to its goal of taking the majority of its business outside the UK. Turner & Townsend chief executive officer Vincent Clancy said he expects to achieve this within five years.
“Australia and Asia in particular are areas where we can see a lot of growth going on at the moment,” he said. The Americas are another “big focus” for the company, which acquired Canadian construction consultant CM2R in April and recently opened Chilean and Brazilian operations.
However, the UK picture has not been as positive. “We did see a shrink in overall UK business, in line with expectations,” said Clancy. “In the UK public sector cuts are beginning to impact. But to counterbalance that we’re seeing that commercial clients are starting to spend again.
“In the UK it’s about reshaping our business to tackle those sectors where there is growth.
“Europe’s a bit of a patchwork quilt in terms of activity. Obviously Ireland’s been quite badly hit,” said Clancy. He also said Turner & Townsend has continued to see its order books “strengthened” by its good relationship with BAA, and by water sector AMP5 work with Yorkshire Water, Southern Water and Scottish Water.
Further opportunities come from the fact that many clients are seeking Turner & Townsend’s services as a front end consultancy to drive value for money and find efficiencies, he said. Cost management accounted for 34% of net revenue in the past year (2009: 35%).
Overseas growth has owed a great deal to major infrastructure projects, said Clancy. “Infrastructure has been a big part of that in terms of growing market share overseas … We are pleased with that against a tough market background.”
Notably Turner & Townsend is working on the £8bn Brisbane Cross River Rail line and airport expansions in a number of Australian cities. Energy projects will also provide opportunities “for a long time to come”, said Clancy. “The stimulus programme in Australia has been particularly successful in getting infrastructure projects going.”