COMMERCIAL REVIEW: Construction - Success and the city

One of the things that has been really helping to keep the company’s order book moving along nicely is Redpath’s reputation for refurbishing all kinds of properties, from colleges and retail stores to offices and public buildings.

“We have a tremendous contract right now working on refurbishing 22 serviced accommodation apartments for the Tannen Group. We’re working on Culzean House, in Renfield Street, on a Grade B fit-out for the first floor. We’ve actually fitted out and refurbished every floor since we first started on the site in 2015,” Clark says.

Redpath is also busy in George Square, Glasgow, forming a new Costa Coffee Shop and main building reception area within George House and has a 148 bedroom student dwelling refurbishment in Meadow Court, Edinburgh. This project includes a new building annex and common room. Other projects are an external façade refurbishment at Queen Margaret University, Edinburgh and also interior fit out
of commercial properties in the city’s Argyle House.

On the retail front, to add to its work on the Lidl store and the Costa coffee shop, Redpath has three projects at East Kilbride shopping centre, involving the cut and carve of retail units.

The company’s business model is to use a large supply chain to supplement the in house management teams. “We have 35 permanent staff but we do not have any trades in-house. “We find this approach gives us the flexibility to accommodate the constantly changing demands of the market place,” Clark explains.

The answer to these surges in demand has been for the company to build up very solid relationships with tried and tested sub-contractors and suppliers. “We have had absolutely no issues resourcing the staff we need for any of the contracts we are awarded and we don’t anticipate any going forward. We do recognise that labour shortages may well start to impact others in the sector. Certainly a decade down the road it looks as if there really will be a marked shortage of skilled workers,” Clark says.

Keeping a relatively small permanent team has allowed the company to maintain a very hands on approach. “We don’t outsource site management.We adopt a collaborative approach and our personnel are focused totally on the client’s requirements. One of the phrases we use is, “Nearly right is not good enough,” he notes. Some 70 per cent of the diverse range of contracts that the company wins come from repeat business, which is testimony to the quality of the relationship that it has built up with its clients over several years.

Clark says that so far, the Redpath team have seen little or no sign of any Brexit-related slowdown in the industry. “It may be coming down the track, but we do not see any impact right now apart from anecdotally from the larger construction companies. One hears that their pipeline of work is getting a bit thinner and that is not a great sign,” he says.

Clark points out that a fall-off in work for the bigger firms of architects and tier one contractors tends to be a relatively good predictor of a coming downturn. “When the architects find things going quiet it generally hits the building sector about two years further down the track. However, what we are seeing is going in the other direction entirely. As a business, we are looking to recruit more project managers and estimating staff. The opportunities just seem to be increasing, and as the business grows that in turn introduces us to even more opportunities,” he notes.  

Clark adds that while Redpath is not looking to become the biggest building contractor in Scotland, it absolutely wants to be seen as the best.

The firm’s reputation for delivering high quality retail unit refurbishment and fit-out has provided a very steady source of work. “Retail has to move with the times, so shops, coffee houses and restaurants have to refresh themselves from time to time, which keeps the interiors division
very busy.”

“We’re seeing two different streams of business here. We work with a number of shopping centres and there is a continual cutting and carving out of retail units to be done, also the large retail parks, have been looking to upgrade their facilities and facades.

“The owners all have great plans to rejuvenate their parks to make them more attractive to the public,” Clark notes.

Student accommodation continues to be good business. “We consider that this sector will continue to grow over the next few years.

“We converted a building in Paisley for My Pad and recently handed over the first phase of the refurbishment Meadow Court, which was a great order for us. We have set ourselves the target of taking our business to an annual turnover of between £25 and £30 million. So far we are on course to achieve this,” he comments.

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Youth, the vital foundation

No matter what may be happening in the wider political world, Ashleigh’s ambitious strategy of training and investment has ensured healthy growth and a dedicated, skilled workforce

The construction sector is notoriously cyclical, with a long history of running into labour shortages in boom times, while laying off thousands of skilled craftsmen when recession hits.

On top of this, by their very nature, building projects are relatively short term in nature, with a usual lifespan of anything from six to 24 months. This means that for the vast majority of construction companies, taking a long-term view is often an act of considerable faith in their ability to generate future business.

Given this, the success of the modern apprenticeship programme in the construction sector across Scotland is a remarkable testimony to the courage of significant numbers of building firms. According to the Construction Industry Training Board (CITB), the number of young people joining a Scottish construction modern apprenticeship (MA) has gone up every year since 2011.

In 2016, for example, some 1,925 new MAs started in the sector, as against 1,422 in 2015, an increase of 35 per cent. While committing to a four-year MA programme is a tough ask for many construction companies, bringing on the next generation of skilled trades and professional managers is hugely important, both for the individual firm and for the sector as a whole.

David Smith, Managing Director of Ashleigh, Scotland, points out that any firm that is serious about achieving steady growth needs to invest very substantially in its future. Ashleigh, he says, has done this in spades, both in terms of the attention it pays to developing career paths for its staff and by its bold decision to invest in building two new offices for its staff.

“Building a 2,000-square foot office in Dumfries and a new, 6,000 square foot head office in Prestwick is a massive investment for a firm of our size. It is a very positive signal to our staff, supplier base and clients that we are in this business for the long term,” he emphasises.

In addition to being a strong, positive signal, the new, purpose-built offices give the company room to grow, which in turn helps to attract new talent. “We put a lot of management attention into looking at succession planning, staff career development and our future as a business,” he notes.

As part of its focus on making the company a great place to work, the new office in Prestwick has its own gym and showers and the offices have been designed to give everyone plenty of room,
Smith says. 

“We have what I am sure is one of the best staff and workforce retention rates in the sector – in excess of 97 per cent. In a high staff turnover industry like construction, that is a remarkable feat in itself,” he comments.

This has been achieved both because of management’s continued focus on staff career progression and by paying attention to staff aspirations for a good work/life balance.

The company’s turnover by its March 31 year-end was £42 million and it is on target to do £45 to £48 million by its 2018 year end. “Our philosophy has always been to concentrate on organic growth and on achieving a growth rate of around ten to 15 per cent a year,” Smith says.

And he adds: “We have a sufficient pipeline of work to achieve our target. Our organic growth model requires this rate of growth to keep attracting new talent to the business, and to provide more challenging roles for our younger staff as they develop and mature in the business.
“It is a very comfortable level of growth for us and we are seeing a good, strong level of repeat work from our existing customer base and our framework agreements, as well as from winning new projects.”

So far, all the negative concerns over Brexit have had no discernible impact on the volume of business the firm is seeing.

“Our own supply chain is very local, with very few overseas workers and tradesmen. Plus, we are seeing very strong, positive economic signs both from registered social landlords (RSLs), who have committed to spend significant sums, and from the Scottish government with its house building commitments,” he says. Capital projects from councils for education, in terms of schools and colleges, has not slowed either.
Smith notes that when the shock Brexit vote happened, the company was already committed to its two new office builds. However, it already had a strong order book at the time and is seeing more opportunities developing all the time.

“The reality is that things are going very well and have been going well for a good while now. This is reflected in the fact that we have recently promoted three directors to supplement our current board of three directors. Again, this is a very positive sign of our growth and shows our staff that our policy of promoting from within the company extends right to the boardroom,” he comments.

“All three of the newly promoted directors have had lengthy careers with Ashleigh. Between them they have some 45 years of experience in a variety of roles within the company,” he notes.

Even in good times the building sector is always challenging. The skills shortages, for example across the sector, exacerbated by an ageing workforce, have been commented on extensively in recent years.
However, Smith points out that thanks to its intensive MA programme and the way it actively seeks to recruit young talent, over a third of the company’s 140 staff are under the age of 25.

“We have a very strong apprenticeship programme that rolls on from one year to the next, with new intakes coming on board each year. This is all part of our policy of organic growth,” he notes.

Ashleigh’s MA programme goes beyond trades and includes apprenticeship roles for future project managers, surveyors, estimators and accounts staff.

“You need a proper balance of professional staff, project managers and skilled trades. Part of my remit is to see that we stay one step ahead of all the challenges we face. It is all about ensuring that you deliver a quality product and service, from inception through to completion and beyond, so that everything comes together and you ensure you have a very satisfied client base, and a happy team,” Smith concludes.

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WOOD IN THE FRAME FOR THE DREAM HOME MARKET

The popularity of timber homes in Scotland has become an increasingly visible feature of our landscape and is driven by several factors.

Perhaps the most important, in an age where sustainability is at the top of the agenda for both the Scottish and local  government, is the fact that wood is one of the most environmentally friendly building materials available: every square metre of timber absorbs one tonne of carbon dioxide and there is very little waste in manufacturing, as the by-products can be used for energy generation in biomass power plants, providing power for the site or the grid.

Scotframe, with sales and manufacturing bases in Inverurie and Cumbernauld, manufactures and supplies timber frame kit packages for housing and commercial buildings. The company says that the benefits of timber frame include the light weight of the components, making it particularly suitable for remote sites and ones where ground conditions would not permit a heavier form of construction.

“In ideal conditions, a timber frame home can be wind and watertight within two to three days and can be finished in as little as eight to ten weeks. Once it is wind and watertight other trades can carry on with their work regardless of the weather – which is a real bonus and avoids costly delays due to Scotland’s unpredictable climate.”

It also points out that timber frame homes are highly energy efficient, exceeding current Building Regulation demands. “This means that timber frame homes are economic to run, heating up quickly and retaining their heat for longer.”

Scotframe believes that it has an advantage in the marketplace by using Val-U-Therm Plus, an energy efficient system with high thermal performance which it says means that wall, roof and floor panels will last for the life of the building, durable for a minimum of 60 years.

“The benefits come from a smart integrated building envelope, manufactured in a factory quality controlled environment that minimises waste and provides a cost effective solution.”

Scotframe sells more timber frame packages to self-builders than any other manufacturer  in the marketplace. It is the only provider of Val-U-Therm system Plus in the UK and uses the system in 80 per cent of the self-build houses it supplies.

Bryan Woodley, managing director of Val-U-Therm says:  “This closed panel building system can be integrated into self-build projects, whether managed by the client, architect or builder. He believes the only way is up for Scotframe, adding: “There is a simple market demand for this. The UK is at the bottom of the self-build tables in Europe and people have realised that you can take a design and tweak and modify it – in essence, they have a blank sheet of paper, what I think of as the dream home market.”

Developed through 2011 and getting its first accreditation in 2012, Val-U-Therm’s core business is the one-off rural project. “In Orkney and Shetland there are a lot of infill plots (filling a small gap that is big enough for only one or two houses) but we also work with housing associations and larger businesses.”

Sustainability is key to the system: “The panels are constructed of a precisely engineered sandwich of sheathing boards, performance membranes and factory-injected, very high performance insulation which is derived from recycled renewable vegetable oil.”

“We have been assessed by the British Board of Agrément (BBA) and  the technology is approved by the independent building consultancy MHBC – so it’s been checked for structural performance, acoustic performance and thermal resistance.

“That makes it a relatively straightforward process when it comes to getting a mortgage, and to be frank, that’s the route to market for us – people have the confidence to come to us to spend their hard-earned cash on what will almost certainly be their biggest ever investment.”

Woodley says: “It’s lovely to be talking about a Scottish innovation. This product is home grown, it uses softwood timber from managed forests, environmentally it goes much further than just ticking the required boxes and it gives people what they want: which is an energy-efficient, warm, draught-free home”.

Shortlisted with Scotframe for the Build It Awards 2017 in the Best Timber Home category and with a range of new house designs Woodley is optimistic about future prospects and the partnership with Scotframe. “This is an area that really engages people – being able to visualise the home that they could live in.”