Category: News

Building Magazine – SME Profile 28/11/2014

SME profile: Midlands-based O’Brien Contractors has surpassed its pre-recession revenue peak

Fast-growing small contractor O’Brien Contractors is forecasting it will boost revenue by 40% in this financial year.

The firm expects to turn over £24.5m in 2014/15.

“It may seem like an overnight success, but to us it’s not felt like that,” says Peter O’Brien, managing director of O’Brien Contractors.

The Midlands-based firm has grown revenue 68% over five years to post revenue of £17.5m in its last financial year.

After contracting by 40% in just one year in the throes of the recession, in 2008-09, the firm has since recovered quickly and raced past its pre-recession revenue peak last year. These positive financials helped the family-owned firm win the Contractor of the Year under £300m turnover at the 2014 Building Awards.

But O’Brien (pictured inset) prefers to characterise the firm’s success as “methodical” rather than “overnight”.

“It has been strategic, planned and the culmination of years of improvement through hard work,” he says.

Reinvention

As the recession took hold, O’Brien embarked on a strategy to reinvent the business, turning it from a groundworks specialist to a principal contractor offering everything needed for a civil engineering project. It also upped investment in training and skills “rather than cutting it”, retained its directly-employed labour force and made a big marketing push to reach new clients, O’Brien explains.

Leamington Spa-based O’Brien was founded in 1958 by Tom O’Brien and is now owned by the second generation of the O’Brien family, brothers Peter and Mick O’Brien, with Stuart Chamberlain and Phil Griffiths becoming shareholding directors in 2012.

It operates across the Midlands, taking on jobs valued between £250,000 and £10m, and offers pre-construction services, design and build, sport pitch construction, traditional contracting and plant hire.

The firm primarily works in education, leisure, commercial, manufacturing and infrastructure.

O’Brien’s work as a principal contractor now makes up 30-40% of the firm’s turnover, according to O’Brien. This work is typically design and build infrastructure and public realm improvement jobs.

“We viewed the recession as an opportunity and planned for the subsequent upturn,” O’Brien says. “In a downturn, clients are less active, they are more receptive to changes in their supply chain as they are more focused on value.

“We found out what organisations didn’t like about their supply chains and we attained new clients that we have developed strong and long-term relationships with. In many ways, the recession was good for us.”

The firm now deliberately targets “larger value contracts” and is also an advocate of “early contractor involvement”.

“Long-term relationships bring trust and collaboration which is essential if project objectives are to be achieved,” O’Brien says.

Despite its diversification into principal contracting in recent years, traditional subcontracting remains 50-60% of the business, and its largest contracts remain in this area. These include an £11msubcontract on John Sisk & Son’s £200m coffee manufacturing centre for Nestle in Derbyshire and a £6m subcontract for Morgan Sindall’s 150,000ft2 Marks & Spencer store at Longbridge. Meanwhile, the firm’s specialist sport pitch construction division generates 10% of turnover.

Local investment

O’Brien has invested more than £4m in training, plant, equipment and technology in the past four years, according to O’Brien.

He says the firm carries out most of its work using directly employed workers, rather than subcontracted labour. “For us, it’s all about continual improvement,” he says. “To be a leader in your field, we believe you should focus on your core competencies and you need the best workforce.”

He’s bullish about prospects for the Midlands market, and particularly its manufacturing sector. He says: “The Midlands market is looking buoyant. There seems to be more confidence, we are securing more high-value contracts and receiving far more live jobs than tenders to price.”

O’Brien is not tempted to join the stampede of regional contractors to London. “We don’t need to go into London where we don’t have the relationships,” he says. “You need those local relationships to get the best service, the best procurement deals and innovation through suppliers. We want to be the best SME in the Midlands.”

Seddon Construction has awarded O’Brien Contractors Limited, a leading Midlands-based Civil Engineering Contractor, an Earthworks and Groundworks package for the Westcliffe Extra Care Retirement Village in Stoke-on-Trent, Staffordshire.

The regeneration of the former hospital is part of a £100m investment to deliver three new retirement villages at sites across the city, namely: Blurton, Abbey Hulton and Westcliffe. The villages will provide 390 new care apartments for people over the age of 55.

The works to be undertaken by O’Brien, include: a Cut & Fill remodelling of 17000m3 of the existing ground profile, with 11000m3 of the earthworks arisings being disposed off-site; mass fill concrete foundations; reinforced concrete retaining walls and associated storm and foul drainage – including a large storm water attenuation tank.

The remodelling design works have all been carried out in-house with the control information being fed directly to the GPS guided Earthworks plant. This technique ensures accurate excavation of foundations to the required formation levels, without the operative having to leave the cab of the excavator.

O’Brien’s experience of working on active developments will come to the fore in this project as connection to an existing surface water manhole within the adjacent highway, as well as extensive services installation works, are contained in the package.

This win comes on the back of a successful year in which the contractor picked up a number of high-profile projects, including: a £6.5m Marks and Spencer civil engineering and groundworks package with Morgan Sindall at Longbridge in Birmingham; a £5.5m roads and sewers contract for new service personnel housing at MOD Stafford with Lovell Partnership; and £2.5m groundworks for Kier Construction at the New Cross Hospital Emergency Department, Wolverhampton.

O’Brien Contractors Director, Stuart Chamberlain, said: “We are delighted to have the opportunity to partner, once again, with Seddon Construction on such a prestigious development for Stoke City Council.”

“As with all our projects, we will ensure that the scheme receives the highest attention to detail and utilises the latest in construction technology and skills, saving both time and money for our client,” added Stuart.

Work on the retirement village started in September 2014 and is expected to be completed during 2016.

O’Brien Contractors, winner of Construction News Awards 2014: Tomorrow’s Company, is on the verge of completing two flood alleviation projects, both for specialist sports turf construction and drainage firm, Turfdry. O’Brien’s sports division has carried out a £60k project at The Rayleigh Club’s championship golf course, which has seen the excavation of a number of new ponds and the formation of bunds with the arising’s.

The contractor is also set to complete a £75k river restoration scheme at Firs Farm Playing Fields for Enfield Council. The works involved the excavation of a watercourse stretching between the north-west and north-east corners of the park.

O’Brien Contractors, the first and only large civil engineering firm able to offer turnkey solutions for a range of sports pitch installations, secured the contracts with Turfdry through its investment in cutting edge surveying equipment and state-of-the-art excavators and bulldozers; equipped with GPS control systems which are linked to the design software. This technical capability was pivotal to carrying out the works and assisting in the concept, in terms of creating cut and fill balance on complex earthworks. It also ensured our expert operators delivered the design to the exact client specifications in the most efficient method possible and with minimal disruption.

Our team of experts have a proven track record of delivering design and build sports projects to a diverse range of exacting client specifications. Recent projects have seen us construct a synthetic grass hockey pitch for Oswestry School, 11 natural turf pitches at Kewford Eagles FC in Kingswinford, a synthetic grass sports pitch for Parklands School in Chorley, as well as a synthetic “Mondo” 6 lane 400m IAAF and UK Athletics track with an infield, full size FIFA compliant football pitch at Eastwood School in Essex.

It is an unavoidable fact that we are currently facing something of a skills shortfall in the construction industry, driven by a combination of the estimated 400,000 jobs lost during the recession coupled with a further 400,000 due to be lost to retirement in the next five years.

It has therefore never been more important to promote the construction industry as a viable and rewarding career and it is more important than ever that we demonstrate the value of working in this sector.
The industry suffers from a perception that working in construction means that you’re poorly paid and spending your days out in the howling wind and rain, when in reality well trained professionals can earn in excess of £100,000 a year.

This is a message that we need to get out there: that the construction industry can offer substantial benefits and that careers in construction are for highly skilled, intelligent people, who can earn big money.
It is apparent that we have to do more to spread this message to younger people at the grassroots level, demonstrating that careers in construction have a clear path to progression. Our core target group has always been school leavers, but the approach here could do with being refreshed, changing the image of construction from the ground-up.

Primarily, we need to utilise the existing young talent that we already have in the industry to prove first-hand that there are significant benefits and opportunities available throughout the sector. We need to understand what’s going to drive 17 and 18-year-olds and this can be more successfully achieved if we have a successful 22 year-old ex-apprentice standing in front of them who has already been through the process. They’re far more likely to take notice of someone like this than if we roll out a 60-year old managing director.

Secondly, we need to demonstrate that, once apprentices have been taken on, they’re being professionally developed rather than left to make the tea.

Every company has its own idiosyncrasies, however from our own experience if you take a young person and put them on-site with a surveyor for four days and on a college course for one day a week, in a few years’ time, they have vastly increased their knowledge and hands-on experience of the role and will also be earning around £20,000 more than they were previously.

Rather than trying to provide every apprentice with experience in every sector of the industry, we identify an individual’s strengths and evaluate where in the company they would best fit, helping them to develop in a specific discipline while nurturing their individual skills.

This isn’t a quick fix and it requires a commitment of some three to four years to truly make the most out of it, but at the end of this process, you will benefit from having a knowledgeable and confident professional who has been developed through your organisation.

This is, of course, more easily said than done, with many companies still recovering from the recession, when austerity led to scaled-down operations that left businesses without the structure or function to allow for the development and stewardship of apprentices. It needs to be made easier for businesses to take on apprentices through financial incentives such as government grants, although whether this is just pie in the sky thinking is another question.

There isn’t a simple one-size-fits-all solution that we can slot into place to solve the skills problem in construction, but with a more committed and focussed approach we should be able to go some way towards meeting the demands of a market that is back on the upswing.

Leading midlands based civil engineering contractor, O’Brien, has invested a further £360,000 in its machinery, taking delivery of two Volvo A25G articulated haulers.

The acquisition takes O’Brien’s investment in state-of-the-art software, equipment and machinery, during the last 5 years, to an enviable £2.5m, allowing it to expand services, improve efficiency and reduce costs for its clients.

The overall venture is part of an ongoing diversification strategy which is transforming the business and seen the contractor win countless awards in recognition of its innovation, including ‘Tomorrow’s Company’ by Construction News and ‘Contractor of the Year up to £300 million by Building Magazine.

Director, Michael O’Brien said “This outlay comes at an exciting time for O’Brien Contractors, as we secure a number of high profile projects, including Marks and Spencer’s in Longbridge and New Cross Hospital in Wolverhampton.

To maintain this success, we are committed to offering our clients the most efficient and cost effective service available at all times. We believe to achieve this we must continue to invest in our people, software and machinery, a strategy that has paid dividends in recent times.”

The new haulers will go straight into action at O’Brien’s latest contract win with Morgan Sindall, enabling and groundworks for a new Marks and Spencer’s development in Longbridge, Birmingham.

O’Brien Contractors Ltd, winner of ‘Tomorrow’s Company’ at the Construction News Awards 2014, are delighted to announce they have secured a new contract with RG Group.

The project will see O’Brien undertake the enabling works, substructures, associated drainage, along with the external works for the service yard and car park. The section 278 road works are also included in the O’Brien Contractors package.

As part of the contract, O’Brien’s have recommended a number of value engineering alterations that result in a large saving from the original disposal service, including the re-use of excavated materials in drain and service trench backfills and a potential redesign of the attenuation tank to minimise excavation and off site disposal.

Director of O’Brien Contractors, Stuart Chamberlain, sees the contract as further evidence of their proven ability to reduce costs whilst providing the highest quality and level of service possible “We pride ourselves on our flexibility and our ability to work with our clients regardless of the size, diversity or complexity of the project.”

“Our on-going commitment to using innovative new technologies allows us to continually im-prove the quality of our work and the speed of installation, saving our clients both time and money.”

The new Sainsbury’s supermarket is part of the £84 million regeneration of the former Wellesbourne Industrial Estate, designed to deliver new employment and residential opportunities.

Construction commenced in September and O’Brien will be on site for 20 weeks.

Key aspects of the project include:

• The installation of a reinforced concrete slab floor and foundation work, including ground beams.
• Car Park approx. 6,500m2.
• Reinforced concrete service yard approx. 3500m2.
• Below car park attenuation system of 864 m3 approx.
• Drainage up to 4 metres deep below car park and service yard.
• Civils works including duct trenching and boxes for water, gas, telecoms and electric service installations.
• Provision and installation of street furniture including anti-ram raid bollards, bus, trolley and cycle shelter, lockers and trolley bays.
• Slab and block paving.
• Section 278 highways improvements including footpath, carriageway works, pedes-trian refuges, bollards, beacons, street lighting and bus shelter.

Construction News Magazine – SME Spotlight 26/09/2014

Empowering staff and putting them at the heart of business strategy has transformed the fortunes of Midlands groundworks firm, O’Brien Contractors.

• Progress recognised
• Having a say
• Diverse operations
• In-cab computers
• Nestlé Factory
• Jaguar Land Rover

“I believe in an open working culture. As managing director, it’s important for all employees to feel they can come and speak to me at any time.”

This is the refreshing philosophy of Peter O’Brien, managing director of award-winning firm O’Brien Contractors, a second-generation family-run business with almost 60 years of experience in the civil engineering and groundworks sectors.

“Our investment in attracting and maintaining the right staff is second only to our professional experience in terms of our greatest strengths,” said Mr O’Brien. “This enables us to work creatively, to find unique solutions and deliver projects faster, more economically and to a higher standard than some other companies.”

It is this approach – a part of the wider O’Brien strategy – that has undoubtedly had a role to play in the company pulling out of the recessionary era with increasing confidence.

Progress recognised

This confidence and strong business approach has also seen O’Brien being recognised with a host of construction industry awards, including being named Tomorrow’s Company at the 2014 Construction News Awards.

This accolade is an indication of the growth at a company that now employs 120 full-time staff and has recently declared record profits of £1.46 million against a turnover of £17.5 million for 2014, with a projection for turnover of £25 million in 2015. This is a significant increase against 2009, when turnover had dropped to £11 million and profit to just £73,000.

Mr O’Brien is delighted with the results. “For a company such as ours, which is at the lower end of the turnover spectrum for this award, to have come out on top when we were competing against far larger organisations is a real boost and confirms the approach we are taking is clearly the right one.”

O’Brien’s decision to place its people at the heart of its business plan came during the depths of the downturn.

“There was a far wider selection of people in the market because of the economic situation, and we thought it was the best possible time to source quality people to move the business forward,” Mr O’Brien says.

“It meant a significant investment at a time when cashflow was tight. But we took the view that the economy had to pick up at some point, and when it did, we would have the armoury in place to take advantage.”

The firm’s people-focused commitment is clear with both time and spending on training having grown from £29,000 and 1,410 hours in 2012, to £39,000 and 1,900 hours this year.

“We only want to employ the very best and have put considerable time and efforts into training our employees,” says Mr O’Brien. “However we also recognise that our competitors will be on the look-out for talented, young and well-trained individuals for their own teams, so it’s vital that we recognise commitment and hard work with the right package of rewards and incentives.

“This is based on the ability of an individual, and what we believe they can bring to our business,” he says. “I don’t believe in having a pay structure that limits people.”

Having a say

O’Brien keeps a close eye on team morale, with ongoing quarterly staff meetings creating an open dialogue with employees and the company opting to broaden its shareholding, giving staff the opportunity to have a stake in what historically was a 100 per cent family-owned business.

“We want all the people who work for us – both our staff and our suppliers – to be passionate about our success, to feel that they are being listened to and having their opinions recognised, and that they are an integral part of the company,” he added.

That certainly seems to be happening; staff turnover is zero for office staff and just 11 per cent for site staff, while productivity – based on turnover per staff member – increased by eight per cent last year.

Diverse operations

Responding to increasing market demand, O’Brien has continued to strengthen and diversify its offering and now provides design, plant hire, sewerage, road construction, and maintenance services and increasingly works as a principal contractor.  This has led to the company’s appointment to a number of high profile projects in sectors including education, retail, industrial and commercial.

“In the last 12 months alone, we have undertaken 29 projects across the Midlands, including works for Jaguar Land Rover, Aston University, Wates , Kier  and Galliford Try and we have just been appointed as subcontractor by Morgan Sindall to work on St Modwen’s regeneration of Longbridge which is an incredibly high profile appointment.”

Alongside recognition and development, Mr O’Brien thinks that a core element of the company’s success is to make staff feel they are part of an organisation that is going places – and is on top of the latest innovations in the industry. The firm’s approach to plant management illustrates that.

“Technologically, we have the most advanced machinery in the country,” he says.

“Our bulldozers and excavators have Trimble GPS technology. If, for example, a client changes the levels on a job it’s communicated to our engineering manager, who then emails the information directly to the operator’s in-cab computer. The operator will then change the scope of what is being worked on to reflect the new design.

“The Trimble software also allows us to calculate cut and fill levels, and even alter the design, to end up with nil balances so that we don’t take anything off site.”

In-cab computers

Besides individual jobs, the contractor uses the software to drive operating efficiency improvements over the medium to long-term. Information from the in-cab computers – including where the machine has been working and what it’s done during the day – is sent directly back to the office, says Mr O’Brien. “We review that data and analyse our performance so we can be more efficient. We are making savings on fuel, wear and tear, operator performance, everything.”

He says that the end result of this is that O’Brien’s clients benefit.

“It’s an important selling point for us in tender interviews. Ultimately, delivering for the client is the most important part of what’s needed to achieve success as a business. With this technology, we can advise clients on how to complete a job quickly, efficiently and cost effectively, ultimately saving them money.”

He is pleased at how staff have welcomed the new technology. “They relish the ability to move their careers forward with it,” he says. “Initially, excavator drivers were not that well-versed with computer technology.

“So as a trial, we approached a driver with 30 years’ experience we knew didn’t feel that comfortable using technology. We felt if we could get him ‘over the fence’, then it should be easier for the rest. The technology has proved very simple for him to use, and that has given others the confidence.”

With all of these strands coming together to put O’Brien on a sure footing, the contractor is starting to eye up new frontiers and is carving out a niche with a turnkey offering for sport pitch construction, a market which the firm initially moved into three years ago and which is likely to generate revenues of £2.5m to £3m this year.

This is alongside the land bank that the firm – which is now NHBC-registered – started building four years ago. Mr O’Brien says he would like to do “maybe 15-20 residential units” a year, which would mean carrying out the whole build and in turn means developing new skills. “We plan to bring in those skills shortly,” he says.

He doesn’t expect to make any acquisitions: “I don’t think they are necessary; we feel we have the right approach – that clients like working with us – and so with that strategy, we can grow our business organically.”

In the past few years O’Brien Contractors has completed a successful diversification programme that has transformed its business and seen it win multiple awards in recognition of its innovation, increased sustainability, customer service standards, profit growth and staff satisfaction. This has led to a 40% expansion of its offices.

O’Brien’s business achievements since implementing the diversification programme include:

• New job creation that has increased staffing levels by 20%.
• Over £2m invested in new plant, technology and training programmes.
• A 60% increase in turnover in the last two years.

The improvements and continued growth don’t stop there and the company plans to employ a further 25 local people by the end of 2014, potentially more. Supporting the local community is integral to the company’s commitment to CSR and it is also dedicated to remaining a family business so Victoria O’Brien will be overseeing the development of expansion plans.

Managing Director, Peter O’Brien said: “The expansion of our offices is testament to how hard everyone in the business has worked to make our diversification programme a success. We are all looking forward to continuing that success to provide more jobs for local people.”

The 40% expansion will see the addition of new offices, a new meeting area and new car parking area in order to accommodate the growth the business has seen.

Midlands-based O’Brien Contractors has been named ‘Tomorrow’s Company’ at the Construction News Awards 2014. The prestigious title is awarded for providing, “a great example for the industry to follow.” This must include, “growing financially and in the service they provide clients.” The judges singled out O’Brien management foresight in investing in people and diversification at the bottom of the recession.

The Awards judges said, “They clearly have a smart strategy and have had the foresight to implement a succession plan alongside an ambitious growth plan.”

The judges praised the bold, extremely long-term outlook, which put O’Brien in a prime position to take advantage of the recent upturn. They also cited the clear succession plan, focused on improving customer satisfaction and relationships. O’Brien has raised customer satisfaction to 92 per cent by acting directly on feedback and having all clients deal with directors.

Peter O’Brien, managing director, said, “We worked hard to implement a sound business model which has stood up to the challenges of the recession. We have also invested in our people and systems to ensure that we deliver the best possible customer service. This national Award recognises the hard work, commitment and dedication of the whole O’Brien team.”

In the latest of a long line of business award successes, O’Brien Contractors has won a prestigious Green Apple Environment Award alongside much larger companies, including Laing O’Rourke, Kier and Lovell.

The Bronze Award recognises the company’s achievement and long-term commitment to developing a sustainable business and sharing best practice within the industry to improve the construction sector’s overall sustainability and environmental performance.

Managing Director, Peter O’Brien said: “We are delighted that our commitment to sustainability and continual improvement of our environmental performance has been recognised by this internationally renowned environmental recognition programme.”

As well as recognising the financial stability that the company has created through its diversification programme, which saw it expand its service offering, develop new solutions, grow its client base and increase its workforce, the award recognises the commitment the company has demonstrated to being environmentally sustainable through a range of initiatives.

These include:

• Developing a comprehensive three page Environmental Policy
• Implementing a purchasing policy that ensures materials are sourced sustainably, for example:
  • Suppliers must be ISO14001 accredited
  • Timber must be FSC certified and a chain-of-custody certificate must be produced
  • Preference must be given to recycled stone/bricks where possible
  • Metal must have a minimum recycled content of 40%
  • Using Hanson EcoPlus concrete which incorporates waste blast furnace slag to reduce its CO2 content by 13.53 tonnes for every 100m3 of concrete

O’Brien’s has also introduced a comprehensive recycling system that segments waste recycling in the office and on site, with dedicated skips for timber, steel, rubble and cardboard. It is further developing this system in order to achieve zero waste to landfill.

Excavated earth is recycled whenever possible by incorporating it into the projects it delivers, for example at Hollyfast School, Coventry, it was used to construct a turfed mound in the playground. This not only reduced waste but also reduced disposal costs and the resulting cost to the client. If materials can’t be reused on-site they are transported to nearby projects for reuse if possible.

The move to a paperless office is now saving approximately 12,000 sheets of paper per year and the company’s entire fleet of vehicles has been updated to low-emission models.

Peter O’Brien said: “Implementing environmental best practices now and constantly striving to improve performance is vital for our business, and our industry, to remain successful.