星空传媒

Bob Hall has a lot to be cheerful about. The Southern Electric Contracting chief executive proudly shows me the display cabinet containing the trophy he picked up for top major m&e contractor at our recent 星空传媒 Services Awards. Better still, the latest figures show his company to be once again the most profitable electrical contracting business in the country, turning in a tidy 拢14 million of profit on sales of 拢186 million.

He鈥檚 keen to let me in on the secrets of SEC鈥檚 success. 鈥淎lthough we are a large electrical contractor, we operate as though we are a lot of small contractors,鈥� explains Hall. 鈥淲ithin SEC, there are 60 operational cost centres, each responsible for something between 拢2-10 million. So we are competing more with the medium-sized contractors.鈥�

Individual managers are given the freedom to go for what contracts they see fit, but have the back-up of SEC鈥檚 central systems and buying power. 鈥淲e have an overall framework, with common accountancy principles, safety procedures and purchasing procedures, but each manger is responsible for what he delivers: if it鈥檚 good, it鈥檚 his; if it鈥檚 bad, it鈥檚 his. I鈥檓 a great believer in ownership and it鈥檚 that ownership that tends to drive out the performance,鈥� says Hall.

This business model also means that although SEC is among the top six electrical contractors in the UK, it is not in the arena of adversarial, high risk construction contracts that frequently catch out some of its rivals. 鈥淲e try to deal with local end-user clients and builders that we know and trust, avoiding the high value, high risk, highly confrontational construction projects,鈥� he says.

The figures weren鈥檛 always so rosy. Back in 1992, the business was loss-making and a recently privatised Southern Electric took the decision to set up SEC as a stand-alone business. Hall, who joined the group as a student apprentice 38 years ago, was drafted in as contracting director. 鈥淲e had a 拢50 million turnover, 1200 employees and we were losing money. It was very much a rescue mission,鈥� recalls Hall.

Tough decisions had to be made, including a fresh look at some of the hangovers from the old nationalised industry days. 鈥淥ur terms and conditions were out of line with the marketplace. We were paying supply industry rates, while the industry was paying lower JIB rates. All of our staff were on final salary pension schemes. Our cost base was not competitive, so we set about turning it round to make it profitable.鈥�

One thing that has always remained constant at SEC is the belief that apprentices are key to the future success of the business. 鈥淲e wouldn鈥檛 have got anywhere near where we are today if we hadn鈥檛 continued to take on apprentices. Even when times were hard and we were losing money, we continued taking them on,鈥� explains Hall. 鈥淣ow, if we look at the managers we have in place around the company, a considerable majority were apprentice electricians back then. Without apprentices we would be unable to resource our engineering and managerial needs. I鈥檓 absolutely sold on it; it鈥檚 not philanthropic, it鈥檚 pure business sense.鈥�

SEC has a development structure in place and apprentices can see a clear route to electrician, technician and beyond to engineers and managers. 鈥淲e try and create a culture where people feel they can develop themselves to their full potential. That鈥檚 the way we grow our business; we grow the people and the people bring in the business.鈥�

Without apprentices we would be unable to resource our managerial needs. It鈥檚 not philanthropic, it鈥檚 pure business sense

Hall is also developing the business by offering mechanical services to clients. 鈥淭hat鈥檚 what the marketplace requires now. Most of our competitors are now m&e,鈥� says Hall. He plans to do this by a mixture of acquisitions of small, local mechanical contractors coupled with organic growth. 鈥淭he right acquisitions haven鈥檛 come up, so we are building it on the back of our existing centres at the moment,鈥� explains Hall.

That鈥檚 not to say that the group is new to mechanical contracting. Southern Electric bought mechanical specialist Thermal Transfer back in the 1990s and for many years SEC and Thermal Transfer were run as separate businesses. 鈥淎round five years ago we started to bring the companies together more. We wanted to retain the individual strengths and attributes but take advantage of uniform central services. We now have all the same systems and processes across the group. Do it once, do it well.鈥�

That time also saw the merger of Southern Electric and Scottish Hydro Electric to form Scottish and Southern Energy (SSE). Hall is head of the SSE Contracting Group which, in addition to SEC and Thermal Transfer, also includes Hydro Contracting in Scotland and the recently acquired Swalec Contracting in Wales.

The Swalec business is 鈥渂uilding up quite nicely鈥�. 鈥淲hen we are starting in a new region, we focus on specialist activities such as our hv expertise to try and differentiate ourselves from others.鈥�

Another new venture is Novus Solutions, where SEC is an equal shareholder with Bucknall Austin and Thomas vale, two of its partners on the MoD鈥檚 Andover North project for Defence Estates (EMC, June 2002). Hall is evangelical about the lessons learnt from Defence Estates鈥� prime contracting formula, its version of partnering, and Novus intends to roll these out to the wider marketplace. 鈥淥ur hope is that we can convince some more clients that this is the right way to do things,鈥� says Hall.

Novus could offer SEC the vehicle it needs to enter the big bad world of commercial construction with confidence. 鈥淚t wasn鈥檛 the size of the projects that was the problem, it was the confrontation that was a problem. You can be a busy fool in that arena,鈥� argues Hall.

Clearly, this promises to a be a busy time for Hall and SSE Contracting. The five-year business plan predicts growth to a turnover approaching 拢400 million across the Group. Past performance points that they will be more profitable than most as they get there.