It鈥檚 been a month since Morgan Sindall鈥檚 building and civils arms became one, and MD Graham Shennan is still explaining that it鈥檚 all part of a planned bid for market share. Is Joey Gardiner persuaded?
When I arrive at Morgan Sindall鈥檚 surprisingly funky head office off Oxford Street - more like an architect鈥檚 than a contractor and civil engineer鈥檚 - I am, to be frank, a little bit nervous. The last time I spoke to Graham Shennan was on the day two Morgan Sindall businesses merged. The headline of my article that followed focused on the likelihood of back-office redundancies at the new company, an angle I knew the firm was keen to play down. Given the man鈥檚 tough reputation, I am more than half expecting him to call security.
The incident doesn鈥檛 go unmentioned, but it鈥檚 okay - I can relax. 鈥淵our article was really good,鈥 he says, before adding: 鈥淚 thought the headline was a bit harsh.鈥
It鈥檚 not surprising the coverage is a sensitive issue, though. The merger, of contracting subsidiary Morgan Ashurst and civils firm Morgan Est, was announced in April and was accompanied by a flurry of rumours and speculation. It was said that the move was a response to trouble in the businesses, a defensive measure, it was whispered, to cut costs in a tough market.
Since then the Kier veteran has had to work flat out persuading people otherwise - that the restructure was about enabling the firms to grow more quickly, dropping unnecessary brands to offer customers a less confusing picture. In particular, he says, the new firm can meet the needs of large customers with both civil engineering and building requirements. Stories about redundancies just don鈥檛 help.
So can he persuade me that, following one of the deepest recessions for 80 years, the company line is the truth and merger was intended to position the company for big projects and not simply a reaction to market contraction? Shennan says: 鈥淥ur objective is to grow. I鈥檓 not saying it鈥檚 going to be exponential growth because we鈥檙e in a difficult world, the UK construction market has definitely got a year or two of tough times in it. With infrastructure you pick up one or two of the big jobs and it can have quite a big impact on your business - we could have two or three bumper years out of Crossrail.鈥
Shennan is actually quite persuasive. Certainly the merged firm, Morgan Sindall, at a stroke became one of the top tier of construction firms in the country with a current turnover of 拢1.5bn and a vast sectoral reach. Shennan talks about conversations he had before the merger with big clients, such as Network Rail and BAA, that need contractors capable of both building and civils work. 鈥淎t Network Rail at a very senior level they鈥檙e happy. The likes of BAA, they were quite critical of us as a group [in the past], in that [they said] we were making life complicated for them. So our move has been welcomed there with open arms. Steve [Morgan, BAA procurement director] has been very pleased, and he knows that it has in part been in relation to things he has said.鈥
Rail is, in fact, one of Morgan Sindall鈥檚 top targets - but it鈥檚 hardly alone in this. Shennan insists his firm has one of the biggest capabilities for rail work in the UK, including electrification, but simply isn鈥檛 well known enough. 鈥淲e鈥檝e been under-punching our weight in a couple of sectors, and I would include rail there,鈥 he admits. Morgan Est was on several Network Rail frameworks, but seemed to lose out on the big contracts, most recently the high-profile rebuilding of Victoria (拢695m) and Tottenham Court Road stations. 鈥淲ell, you can鈥檛 win them all,鈥 he says. 鈥淥ur share is still small. Even if markets dip off you can still grow by growing market share. I think we weren鈥檛 giving the customer a clear enough message about our capabilities.鈥
Quick-fire Shennan
Previous: Started a career in 1977 as a graduate engineer, then spent 10 years at Kier from 1989. Defected to Morgan Sindall in 2002, spent last two years in charge of Morgan Ashurst.
Management style: 鈥淢y alarm鈥檚 set for before five and my better half is surprised if I鈥檓 home before eight. I believe in being there.鈥
Rethinking construction: 鈥淲e don鈥檛 get credit for what a phenomenally efficient industry this is. We get knocked and we don鈥檛 get credit. It really aggrieves me.鈥
Ambitions: 鈥淭his is close to an ideal job. I鈥檓 having a bloody great time.鈥
Most embarrassing secret: 鈥淚 was an extra on The Prisoner as a kid growing up in Port Meirion.鈥
The biggest prize, as probably the largest tunnelling contractor in the country, is clearly Crossrail. The major contracts, worth in the region of 拢2bn each, are due to be e-tendered in the next two or three weeks. But what are bidding contractors being told about the scheme鈥檚 future? 鈥淲e鈥檙e hearing absolutely nothing,鈥 says Shennan. 鈥淲e鈥檙e still being told it鈥檚 full speed ahead get on with it. But they [the coalition] have done a great job of softening us up, so anything that comes through will not be a shock.鈥
The new firm has other targets in its sights as well. Energy - in particular, nuclear power - and a host of other regulated infrastructure markets such as water, gas and energy transmission are all on the list. Focus will also be maintained on Morgan Ashurst鈥檚 traditional strengths - airports, hospitals, schools and supermarkets - notwithstanding the inevitable fall-off in government work.
Shennan is straight-talking, but doesn鈥檛 come across as hard-boiled despite his reputation. But there is clearly some steel in a man who, despite claiming to have ceased being personally ambitious in his thirties, finds himself in charge of a 拢1.5bn-turnover business. So why does he do it? 鈥淚t鈥檚 just what I do, really. I鈥檓 really excited by the potential of what we can achieve together. It鈥檚 the guys on the ground who know so much. I know nothing about, say, utility servicing, I know nothing about a lot of things, but if we can get the people that know to really engage, and add their ideas it鈥檚 those guys who鈥檒l give us growth.鈥
His vision doesn鈥檛 rule out acquisitions in the future, though there is nothing immediately in the offing. However, he is wary expansion overseas. 鈥淲e believe there is still growth to be had in the UK. We鈥檝e seen a lot of high-profile people charge into the middle east, and quite a few have come out with their tails between their legs, with big debts. You do it for the wrong reasons, and it can be quite painful.鈥
The reasons behind this bode well for the future of the business. Shennan is an optimist who thinks more can be gained in exploiting a stable market his firm knows rather than jumping on the bandwagon of a growing economy somewhere he doesn鈥檛 understand. And, for the record, that still means structuring the company for growth.
Photography by Victoria Nightingale
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