Record results see Turner & Townsend double in size since the crash

GCR talks with global head Vince Clancy on how T&T weathered a rough year, why it’s reverting to a partnership and its plans for a high-tech year ahead

Independent consultant Turner & Townsend (T&T) has announced strong results for the year to 30 April, with turnover up 9% to $600m and operating profit 11% higher at $58m.

The company, which offers project and programme management services in infrastructure, property and natural resources, has now recorded five successive years of growth, and has more than doubled in size since the 2008 crash.

These latest results come despite a difficult year in the natural resources market amid the collapse in the prices of oil and other commodities.

Vince Clancy (pictured), the global head of T&T, said the company had succeeded in redeploying staff from the stricken oil sector to infrastructure, where revenue rose by 20%.

Project wins there included high-profile schemes such as Medupi Power Station in South Africa and the expansions of international airports in Dubai and Hong Kong.

"It’s still quite a volatile market out there so we were very pleased with the progress," he told GCR. "We actually recorded 4% growth in resources which is good considering just how difficult conditions were in a third of our markets – and they’re only going to get worse.  

"One of the good points about our business model is that we’re able to redeploy resources. There’s a certain amount of pain, but the skills we use in oil and gas are sought after, so we’ve been able to use them in our infrastructure business."

The firm’s revenue in the property sector, its third main area of business, rose 12%.

Globe at a glance

The company recorded growth in all its main markets around the world. The lowest level was in the UK, where T&T still does most of its business.

There, revenue rose 9% to $250m based on strong demand for property services in the capital in the second half of the year.

Clancy said the London effect was beginning to ripple out to regional centres such as residential markets in Manchester, Newcastle, Birmingham and Bristol, as well as regeneration schemes in Sheffield.

T&T’s main overseas market is North America, where revenue increased 11% to $100m. It also did well in the Middle East, where turnover jumped 45% on the back of a strong performance in the UAE and Qatar, and the firm’s first project wins in Saudi Arabia.

Business grew 22% in Asia, thanks in part to project wins in the north-east as well as the company’s traditional bases in India and Hong Kong.

The biggest growth was recorded in Latin America, where turnover jumped 66%.

Clancy said: "We’ve seen our global clients become more active down there and we’ve carved out a market servicing inward investors. Also, Latin America is one part of world where natural resources investment is still going on, particularly in the mining side, and we had big project wins in Chile and Peru."

The firm’s other main area of activity is Australia, where it grew 50%, partly as a result of its purchase of project management company Thinc, which made it the largest independent project manager in Australia.

Altogether, the firm now employs 4,100 staff across 90 offices.

Howdy, partners

The company also announced that it would change its status from unlisted plc back to a limited liability partnership (LLP).

Clancy said: "We used to be a partnership but in 2007 we changed to a plc with the intention of listing the company, but the markets didn’t permit that. Now for two main reasons we’ve decided to go back to the partnership model. The first is that in terms of access to capital we have enough to grow the business at the rate we want to and so the need to raise money through an IPO just isn’t there.

Our view is that in the past BIM has been led by designers and contractors but we believe that it should be led by clients– Vince Clancy

"The second is that our real driver in terms of future success is being able to attract and reward the right people."

At present T&T’s executives own its shares, but over time managers join who do not have a holding, so ownership and management diverge.

"It’s a global partnership and that reinforces our one-business model, which has been at the heart of our success," Clancy said.

"If you’re an Australian, you’re interested in how America is doing and if you’re in America you’re interested in how the UK is doing. It incentivises everyone to cooperate around our clients for the good of the company."

He said global cohesion helps in a particular growth area – contracts to handle global property estates for big clients like banks and oil companies.

The year ahead

In the next year T&T will look for more bolt-on acquisitions.

"You should expect us to do at least one or two in the coming year, and we continue to be interested in north-east Asia and we are also interested in growing our presence in the technology space," Clancy said.

It will also look to use technology to boost its programme management performance.

"We’re keen to develop our capability in that space in two ways," Clancy said. "Firstly, for global programmes we’re using global management tools that allow us to manage hundreds and hundreds of processes and the key to that is the way we use analytics and manage data and how we get real-time reporting.

"The second is BIM and analytics and how clients benefit from BIMs. We believe we’re market leaders in how clients should adapt to information models and we’re keen to invest in that space.  

"Our view is that in the past BIM has been led by designers and contractors but we believe that it should be led by clients and we want to help clients to come up with strategies to get benefits from BIM for 50 years rather than just the construction period."

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