Skip to main content
Facilitate Magazine: Informing Workplace and Facilities Management Professionals - return to the homepage Facilitate magazine logo
  • Search
  • Visit Facilitate Magazine on Facebook
  • Visit Facilitate Magazine on LinkedIn
  • Visit @Facilitate_Mag on Twitter
Visit the website of the Institute of Workplace and Facilities Management Logo of the Institute of Workplace and Facilities Management

Main navigation

  • Home
  • News
    • Comment
    • People
    • Reports
    • Research
  • Features
    • Analysis
    • Features
    • Round Tables
    • Webinars
  • Outsourcing
    • Contract Finder
    • Contracts
    • FM Business Models
    • Interviews
    • Mergers & Acquisitions
    • Opinion
    • Procurement
    • Trends
  • Know-How
    • Explainers
    • Legal Updates
    • White Papers
  • Jobs
  • Topics
    • Workplace Services
      • Hospitality
      • Catering
      • Cleaning
      • Front of House
      • Grounds Maintenance
      • Helpdesk
      • Mailroom
      • Manned Guarding / Security
      • Pest Control
      • Washroom Services
      • Disaster Recovery
      • Specialist Services
    • Professional Performance
      • Behavioural Change
      • Continual Professional Development
      • Education
      • Management
      • Recruitment
      • Training
    • Workplace Performance
      • Benchmarking
      • Health & Wellbeing
      • Operational Readiness
      • Procurement
      • Security
      • Workplace User Experience
      • Workplace Culture
    • Compliance
      • Health & Safety
      • Risk & Business Continuity
      • Standards
      • Statutory Compliance
    • Building Services
      • Architecture & Construction
      • Asset Management
      • Building Controls
      • Building Fabric
      • Drinking Water
      • Fire Protection
      • HVAC
      • Landscaping
      • Mechanical & Electrical
      • Building Security
      • Water, Drainage & Plumbing
    • Technology
      • Building Information Modelling
      • CAFM
      • Data & Networks
      • Document Management
      • Information Management
      • Internet of Things (IoT)
      • Software & Systems
    • Energy management
      • Energy Management Systems
      • Electricity
      • Gas
      • Solar
      • Wind
    • Sustainability
      • Environmental Quality
      • Social Value
      • Waste Management
      • Recycling
    • Workspace Design
      • Agile Working
      • Fit-Out & Refurbishment
      • Inclusive Access
      • Lighting
      • Office Interiors
      • Signage
      • Space Planning
      • Storage
      • Vehicle Management / Parking
      • Washroom
    • Sectors
      • Corporate Office
      • Education
      • Healthcare
      • Manufacturing
      • International
      • Retail
      • Sports & Leisure
      • Regions
  • Buyers' Guide
Quick links:
  • Home
  • News
Market Analysis
Topics
Sectors
Public Sector

Outsourcing's outs offer new ways in

Open-access content Monday 5th August 2019
Graham davies

5 August 2019 | Graeme Davies


Graeme Davies gives his views on outsourcing this month.


The FM sector has pretty much existed in a state of permanent flux for the past five years as major players have stumbled upon harder times and smaller upstarts have surged up to take advantage before, in some cases, crashing and burning. Some would say ''twas ever thus' but the recent past has been littered with significant casualties than ever before. 


Now Kier Group has thrown in the towel, announcing its decision to pull out of the FM market in June after management decided to concentrate on construction. A strategic review by CEO Andrew Davies to steer the business away from a cash crisis such as that which engulfed Carillion and nearly drowned Interserve concluded that Kier would be best off selling its property, FM and environmental services businesses and concentrating on cash generation in its core business. The irony here is that many of the businesses being jettisoned now were brought into the fold through the acquisition of May Gurney in 2013 as construction businesses looked to build out full service operations to take advantage of the trend towards outsourcing of public sector services. 


News of Kier's withdrawal from parts of the market was swiftly followed by yet more disappointment for the outsourcing sector, as Costain sent a warning to investors about profits owing to late starts on some contracts. 


But Kier's exit from the FM sector, coupled with the woes of its peers, creates opportunities for others. Witness the recent expansion into the sector by Wates, the venerable 120-year-old family company with roots in construction and housebuilding. It recently announced the launch of Wates Facilities Management, building on its successful Wates Smartspace FM business. The firm already has 85 clients in 14 sectors and a combined turnover of £400 million. 


The fact that it is still a private business will allow Wates to build up its FM operations away from the glare of public ownership and the extra pressure that can place on companies to continue seeking out growth almost at any cost and to live up to expectations in terms of dividend payments that may become unrealistic. Wates has a solid base from which to grow in the sector; in 2018 it posted a turnover of £1.6 billion and cash earnings of £48m, up modestly on the previous year. Importantly, the company ended 2018 with £112m in the bank and a record order book of £5.4bn. The test for its management will be to remain disciplined in its growth plans and to maintain its financial prudence. 


With a family legacy to protect and without the competing demands of public ownership it has a decent shot at achieving this.


Graeme Davies writes for Investors Chronicle

Also filed in:
News
Content
Market Analysis
Topics
Sectors
Public Sector

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Today's top reads

 

Latest Jobs

Project Leader (Maternity Cover One Year Contract)

Cambridge
Circa £50,000 Pro Rata + Benefits & Opportunities
Reference
56378

Maintenance Supervisor

Surrey
Up to £43,000 + Excellent Package & Opportunities
Reference
56376

Regional Facilities Manager

South West England
Circa £40,000 + Benefits & Opportunities
Reference
56375
See all jobs »

 

 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to print

Sign up to receive our bi-monthly magazine

Subscribe
Facilitate magazine cover, June 2020
​
FOLLOW US
@Facilitate_Mag
Facilitate Magazine
Facilitate Magazine
CONTACT US
Contact us
Tel: 020 7880 6200
​

IWFM

About IWFM
Become a member
Qualifications
Events

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to Facilitate Magazine
Write for Facilitate Magazine

General

IWFM Jobs
Help

© 2022 • www.facilitatemagazine.com and Facilitate Magazine are published by Redactive Media Group. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ