Company focus The dotcom disaster taught fit-out firm Modus Group to take nothing for granted
鈥淭he traditional consulting world takes a dim view of us,鈥 says Toby Benzecry, co-founder of fit-out contractor Modus Group. 鈥淏ecause we do design-and-build work, architects, QSs and M&E consultants perceive us to be stealing food from their mouths.鈥
Design and build has been the cornerstone of Modus鈥 rapid growth in the past 15 years. Its year鈥檚 accounts to 31 December 2006 show that turnover reached 拢64m, up from 拢44m in 2005 and 拢24m in 2004. Benzecry predicts that this will reach 拢76m in 2007 but insists those nervous consultants have nothing to fear.
鈥淲e鈥檙e not competing with architects 鈥 we鈥檙e competing with design-and-build companies,鈥 he says. He acknowledges that some of the criticism levelled at the design and builders is valid: 鈥淵ou don鈥檛 know what you鈥檙e getting in terms of quality of work and price, and clients don鈥檛 always get good value.鈥 But of course this does not apply to Modus.
In fact, he says, consultants working for the company will find it user-friendly. Benzecry is an and a management consultant by background; his co-founder Ashley Wilson is a QS.
And in any case, things may be about to change. Modus plans to change the balance of its work over the next year to limit its dependency on risky design and build. Benzecry and his directors hope to grow the projects division, which works in the traditionally procured office fit-out sphere.
Modus鈥 caution is born of experience. In the late 1990s, the firm was on accountant Deloitte鈥檚 list of the fastest-growing companies for five years running, but in 2001 it suffered a blow when the dotcom bubble popped: much of its success was based on data centres and office fit-outs in the technology sector.
Getting a contractor back to a fit-out site is notoriously difficult
Toby Benzecry
鈥淓veryone else caught a cold 鈥 we caught flu,鈥 says Benzecry wryly. 鈥淎fter the downturn we decided to rebuild in a different way. We didn鈥檛 want to be dependent on the private sector or on design and fit-out jobs where there鈥檚 greater risk.鈥
Modus realised that it could use its M&E expertise jobs to enter the universities sector, refitting laboratories. Imperial College London is now its biggest client, giving it 拢10m of work a year.
The three fit-out divisions within Modus Interiors contribute 拢56m to the group鈥檚 turnover. The rest comes from its newer facilities management division, Modus FM. In 2007, Benzecry hopes to see 10% growth in the Interiors business and 20% in facilities management, which he says is largely secured already.
Fit-out clients are offered support from the FM division for 12 months after completion. 鈥淕etting a contractor back to a fit-out site is notoriously difficult,鈥 says Benzecry. 鈥淲e want to convince clients that they should buy some level of service from FM, whether it鈥檚 changing lightbulbs or maintaining air-conditioning. Next time they want their offices done, they look no further as we鈥檙e already working for them.鈥
Modus is keen to secure more framework deals, and Benzecry is considering creating a division specifically for these. He has just landed two that will be announced later in the year.
Modus鈥 pre-tax margins are 3% but Benzecry says it will be 鈥減icky鈥 about taking on lower margin work in future to stave off the fate of collapsed fit-out specialists such as Curzon. Despite improving profits, after its dotcom disaster Modus takes nothing for granted.
Postscript
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