DICE2

Risk junkies

鈥淲hy do contractors bother? The risks are high and the returns are small. Many major players in the market are diversifying into the services sector in a bid to chase larger rewards and spread risks. For those that haven鈥檛, profit margins have remained stubbornly low 鈥 and sometimes disappear altogether.鈥

好色先生TV wrote this evaluation of contracting in 2005. It would be great to say that risk has lessened, but the Top 150 Contractors tables this week still paint a 鈥渨orrying picture鈥, with the ghost of Carillion oppressively haunting the figures.

In 2005, Multiplex had just announced 拢45m losses on Wembley stadium. Industry watchers blamed poor risk management on the job. Simon Vivian, chief executive of Mowlem, said: 鈥淚f a client can get a contractor to take on all the risk, they will pass it over.鈥

Bob Rendell, chief executive of regional contractor Leadbitter, felt that clients were becoming more educated and there was potential for improvement. But with one disclaimer: 鈥淭his is if the economy allows it to happen. If the economy goes into significant decline, it鈥檒l go back to a dog-eat-dog world.鈥 It鈥檚 almost as if he could see into the future 鈥

To read the full article from 17 July 2005, click here 

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