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It was, says the down-to-earth chairman and chief executive of Kier, totally out of character. The advert for MAR15A caught his eye and there he was, in a grand romantic gesture, buying a number plate spelling out his wife Marisa's name for as much as other folk would pay for a new family car. "For most of my life, I've simply not been able to be so extravagant," says Colin Busby, eager to change the subject.

Few in the industry would feel so guilty or begrudge him such a treat. Busby is showered with admiration from his peers, his staff and even the City for leading the renaissance in UK contracting. It was only nine years ago that Busby's escape committee pulled off a management buyout from Hanson. Today, Kier's turnover tops £1bn and profit continues to nudge upwards – it was £16m after tax at the last count. Shares have leaped from £3 each to £5 in the past four months. His stake alone, accounting for 2% of Kier, is worth about £3m. And at this year's ºÃÉ«ÏÈÉúTV Awards, Busby mounted the podium to receive the major contractor of the year prize for the third time in four years.

For construction's new ambassador – he takes up the chairmanship of the Major Contractors Group this month – there is even more to celebrate. Busby has shed two stone in six months. The weight loss has been achieved without resorting to faddy diets or following the latest exercise gurus. "I've been eating sensibly and trying to go to the gym a couple of times a week before I come to the office in the morning," he confides over a cup of lemon tea at Kier HQ at Tempsford Hall in Bedfordshire.

In fact, Busby's attitude to health and fitness is typical of his common-sense attitude to life and, for that matter, running a business. Not for him the stampede into support services or other contracting flavours of the month. Of course, Kier comes with modern garnishes, such as PFI and facilities management, but the main course is still the traditional English roast variety – a £750m regional contracting business. Its strategy is to put low risk before high margins. And doing right by clients to win repeat business: half of Kier's workload comes from customers it has worked with before. "If you work on a regional basis, people have to work well within a patch. You can't burn off the locals, up sticks and try somewhere else."

Treating staff with similar consideration is another of the company's key ingredients. "Kier's odd in that I suppose it espouses what you'd call old-fashioned ideas," says Busby. "We have a lot of respect for people but we expect a lot from them. They don't get an easy ride but we've tried to create an environment that people find pleasant to work in." Seven years is the average time one of Kier's 6000 employees stays on the payroll. This low turnover is, says Busby, one of the main reasons for the business' consistent performance. At the time of the MBO, staff were encouraged to take a stake themselves to "make sure everyone was pulling on the same rope in the same direction". And they still do so – which analysts say owes a lot to the fact that past and current employees own 40% of the firm. "Kier is a lovely story," says one, not usually known for his enthusiasm for the sector.

Busby prides himself on his ability to spot talent and surround himself with good people. "My aim is to reduce my workload to nothing," he says. For their part, the staff speak of a supportive, though certainly not overly demonstrative, boss. "He weighs people up very well; he's very trusting and lets us get on with the job," says one employee. Other modern managers may talk of empowerment, but Busby's vocabulary is refreshingly free of such jargon. Not surprisingly, "plain speaking" is how everyone describes him. One analyst even goes as far as to call him "disarmingly honest", applauding his self-effacing manner and tendency to downplay the company's performance. "But I'll tell you his secret," says the same Square Mile dweller, shocked by something he only recently discovered about Busby. "He pretends he doesn't understand numbers but, do you know, he's actually an accountant."

It was a small chartered accountancy firm in his native Essex that launched the 18-year-old A level student into his chosen profession, nearly 39 years ago. It was on the finance side that Busby came into construction, joining contractor W&C French in 1969. When this merged with Kier in 1973, Busby took on a general managerial role overseeing Kier International. His rise up the ladder continued when Kier was taken over by Beazer in 1986, and he became managing director of the renamed Beazer Construction. More turbulence followed when an MBO was thwarted by a Hanson bid in 1991. A year later, Busby finally got his hands on the firm, which was rechristened Kier. It floated in 1996.

There is no doubt that his accountant's instincts have influenced his strongly conservative view of cash management and risk aversion. But Busby points out that when Kier started out, its equity was worth only £2.5m, so that strategy was born out of necessity. Kier has only recently started taking on jobs worth up to £60m without a joint-venture partner. "I'd gladly trade price for risk," he says. "That's why we've got a 1% margin."

After a long slog, Busby has convinced the City that there's merit in investing in firms such as Kier that can sustain year-on-year profit growth. But he knows that bolstering profit margins has to be a priority. "Thin margins have held the rating back significantly," says Mike Foster, an analyst at Granville Baird. The City also thinks that Kier's housing arm needs to shine a little brighter, and Busby himself sees the international division as the firm's Achilles heel: it has been scaled back after after it lost money on a range of jobs in South-east Asia.

Instead of 25 Major Contractor Group members chatting, we might get five members and 20 MPs together

Analysts say Busby should use cash from the business to raise margins by snapping up firms in high-profit sectors such as housing. Busby says he might look at a few housebuilders, but his main strategy is more of the same.

Low share prices have scuppered deals in the past so a higher price certainly gives the firm a few more chips to play with. Buying a regional contractor, he says, would not be out of the question but a rumour linking the firm with Costain is laughed off. "It's not on my agenda," he says.

Laing was never on his radar screen either. "We never even took the papers," he says, although he thinks the deal makes sense for O'Rourke. Like many in the business, Laing Construction's decline induces a certain slushiness: "Ten years ago, we looked to Laing as a model for our business; the quality of its work and people, its procedures were all outstanding. But that's gone in the past few years. It's sad."

With plenty of government cash pledged for roads and rail, Kier's civils side is set to grow. But like others in the sector (pages 20-23), he's sceptical that the government will be able to spend it. In fact, he would rather it did not. "I'm relying on the fact they won't be able to. The government can best help the industry by keeping construction spend within the normal narrow range you'd expect with a shallow economic cycle. We're already struggling on the skills front. The last thing we need is 10% growth."

No doubt Busby will make his views known to government in his capacity as chairman of the MCG. "Boring meetings" and a wider membership of 25 have left some yearning for the elitist days of the Dorchester Club. Busby acknowledges that the MCG might need a bit of a shake-up but defends its purpose staunchly. "It's got 25 members whose combined turnover represents a large chunk of the entire industry. On occasions, they need their voice to be heard. The MCG has taken the initiative on changes that should and could be brought in to improve safety. If the MCG had not been around, the initiative would have been much more diluted." He cites the campaign to get the PFI going as another victory for the group.

Busby says safety will dominate the MCG's agenda for the next six months – and that that will mean continuing to reject the idea of roving union safety reps. "Our view is that we don't understand the rationale for it. There should be one focal point and that should be the Health and Safety Executive. Its resources should be increased." But he also has his mind set on getting government and clients to understand the industry better. "Instead of 25 members sitting around and chatting, we might get five MCG members and 20 MPs together," he says.

We've obviously hit a hobby horse here, as Busby launches into a series of complaints: how long the government spends talking about construction compared with farming, the general lack of knowledge about how the industry works, its lousy PR and down-at-heel image. At an MCG meeting he lightheartedly mooted enlisting Terry Wogan to speak up for builders, because of his continual moaning about the state of the roads.

Although he wants clients to understand the industry better, Busby is certainly not pleading for more government. Naturally of Thatcherite persuasion, he has been impressed with Labour, but is worried about the European Union's employment legislation.