Analyst Site Visit 10 th November 2004
Agenda Introduction (5 mins) Paul Smith 30 Fenchurch St briefing (10 mins) Lee Phillips Site tour (40 mins) Divisional MD updates (60 mins) Fit Out Bluestone Morgan Est Lovell Steve Elliott Graham Shennan Graham Grundon Stewart Davenport Q & A s (20 mins) Jamies Wine Bar
Steve Elliott Managing Director 10 th November 2004
Overview Made up of four brands Commercial interiors 4% 2% 19% Aim at number one spot in all markets UK coverage from six locations Projects up to 40m 75%
2000 Public Sector Other Clients Financial Services Work providers: SMEs, blue chip corporates, multi-nationals Steady frameworks approximately 20% Repeat business 80% Re-focused and balanced portfolio of clients Leisure Consumer Energy Consumer Energy Legal Legal Leisure IT Property Other 2004 Public Sector IT Financial Services Property
Perfect Delivery Launched in 1999 Central to all businesses Created using client feedback Four client cornerstones Drives business process and improvements Achieving 80+% Increases customer focus and satisfaction Increases profits (50% increase from PD) Increases market share
Achieving growth Extending the business into new areas of fit out e.g. healthcare and labs Market share growth new areas e.g. London doughnut and Docklands taking share from competitors Geographical expansion of current businesses Birmingham, Manchester, Scotland
Graham Shennan Managing Director 10 th November 2004
Selectivity strategy Health Education Industrial Property Services Framework Contracts & PPP
Health expenditure Spend profile 2004 2005 2006 DoH total NHS Investment 3.8bn 4.6bn 5.9bn Source data: DoH Annual Report 2004, Spending Review 2002 Further initiatives Procure 21 NHS Lift wave 4 begins Q1 2005 NHS Lift waves 1-3 secondary market Stockport PCT Framework Individual PFI opportunities e.g. Elderly Care Resource Centre, Islington BC ( 7m) Clients BUPA, Partnerships for Health, Apollo Medical, Sussex University Hospitals Trust
NHS LIFT achievements Secured 4 out of 42 i.e. 10% of market Financially Closed Barnsley Community Solutions Worsbrough ( 3.9m) handed over on time, defect free on 25 th October 2004 Thurnscoe ( 2.6m) handover 2 weeks and Goldthorpe ( 3.6m) in 4 weeks Camden & Islington Community Solutions Preferred bidder status Hanley Road ( 1.5m) and Bingfield Street ( 2.1m) Solent Community Solutions Doncaster Community Solutions Goldthorpe nearing completion Bingfield Street Hanley Road
Education expenditure Spend profile 2004 2005 2006 Source data: DfES Annual Report 2004, DTI 3.8bn 4.2bn 5.7bn A further 2.2bn will be funded from 2005 over a 10 year period through Building Schools for the Future Further initiatives Partnerships for Church of England Schools (PfCS) 1.5bn over 10yrs Individual PFI projects e.g Preferred Bidder on New North Community School in Islington ( 6.8m) Clients Norfolk Property Services, Warwickshire CC, Devon CC, Southampton Uni, Loughborough Uni, Cambridge Colleges, UCL, Surrey Uni, Nottingham etc.
Selectivity strategy Bluestone plc health, education, industrial and property services sectors as a % of turnover per annum 55% 2006 75% Target Hylands house, Cambridge 39% 2004 Forecast 2000 Actual CAT building, Cambridge
Framework contracts 0% 26% 39% 100% 2000 Actual 74% 2003 Actual 61% 2004 Forecast 45% 40% 55% 60% 2005 Target 2006 Target Secured Under bid Norfolk County Council ( 15m pa) Devon County Council ( 5m pa) Warwickshire County Council ( 5m pa) Lancashire Fire Stations ( 5.9m) Barnsley LIFT ( 10m pa) Solent LIFT (preferred bidder) Camden & Islington LIFT ( 10m pa) Doncaster LIFT (preferred bidder) SW PRIME ( 400m over 7 years) Suffolk Fire Stations ( 20m) Dorset Emergency Services Partnerships Initiative Project (DESPI) ( 26m) Stockport PCT ( 50-60m)
Early Solutions Together Infrastructure Services Graham Grundon Managing Director 10 th November 2004
Early Solutions Together civil engineering division utilities division water division tunnelling division
Early Solutions Together RECENT SUCCESSFUL CONTRACTS CTRL 350 CTRL 310 UU framework A92 Dundee to Arbroath Newport Bridge Terminal 5, Heathrow Airport HMB Alliance
WATER DIVISION = Significant AMP player and currently working with 9 out of the major 11 water and wastewater companies = AMP4 success with = Severn Trent framework = AMP4 major work select lists for a further 6 key water and waste water companies ( 750m) = Currently tendering for United Utilities AMP 4 programme = Repositioning away from smaller AMP4 and will concentrate on work with United Utilities, Severn Trent Water and Scottish Water Solutions Early Solutions Together
TUNNELLING DIVISION = Market leader with all round design and manufacturing capacity = Current contracts at = BAA - Heathrow T5 = London Underground - remobilisation for King Cross = United Utilities - Preston = Aggregate Industries - Moorcroft Quarry Extension = Major opportunities = Glendoe Hydro Electric Scheme Scottish & Southern Energy = Croydon Cable Tunnel - National Grid = Belfast Sewers Project - Northern Ireland Water (Belfast) = Edinburgh Airport Rail Link (EARL) TIE = Crossrail long term opportunity Early Solutions Together
Early Solutions Together CIVIL ENGINEERING DIVISION = Major player on selective contracts within road and rail market ( 3.5bn per year) = Increased rail scope with recruitment of specialist rail staff achieving permanent way capability = Current contracts = Newport Southern Distributor Road (PFI 66m) = A92 Road Improvement (PFI 55m) = Lincolnshire Road Programme (10 years 300m) = Channel Tunnel Rail Link Contract 310 ( 260m) = Current Opportunities = Docklands Light Railway Barking Reach Extension (PFI 200m) = M1 Belfast Upgrade (PFI 300m) = Carlisle Northern Relief Road (PFI 70m) = Glendoe Hydro Electric ( 100m) = M74 Glasgow D&B (3 @ 100m)
UTILITIES DIVISION = One of the leading utilities brands now providing all three key services in gas, water and electricity. = Major success in breaking in to the gas market with one of NGT s four national alliance contracts = In bid process on 3 major AMP4 frameworks for Anglian Water & United Utilities, Northumbrian Water = Repositioning the business away from smaller AMP4 water & wastewater providers, concentrating on selective markets with Scottish Water Solutions, United Utilities, Anglian Water, coupled with increased gas and electricity sector penetration. Early Solutions Together
LOOKING FORWARD TO 2005 AND ONWARDS = Unsettled and drawn out market = Lack of the major contracts = Water company re-bidding = Committed to growth = Order book boosted by STW and NGT successes = Major AMP 4 frameworks with current employers being bid = Civil Engineering Division s current forward tender throughput expected to exceed 1bn = Continued growth in the new market entered in 2004 with gas and rail Early Solutions Together
LOOKING FORWARD TO 2005 AND ONWARDS = Workload for 2005 currently uncertain due to timing of major projects = Division well positioned for longer term growth Early Solutions Together
Stewart Davenport, Managing Director 10 November 2004
Market Position National coverage One stop shop Key worker Lovell Choice Regeneration Decent Homes
Market Growth Refurbishment Decent Homes programme extended until 2014 CSR: 180m for ALMOs/LSVTs with negative equity Affordable Housing ODPM plans housing on government land Lovell Choice Social Rented Communities Plan - 22bn 2005/6 CSR extra 16bn up to 2007/8 Mixed Tenure Large scale redevelopment Market Renewal Pathfinders
The Future Large scale regeneration Life after Decent Homes Developer grant Joint ventures
Lovell Growth Scotland Milton Keynes Cambridge North East South London & South East
Analyst Site Visit 10 th November 2004