Jackson tired of living on the margins

Contractors cannot live forever on margins of just one per cent said Peter Fryer, md of the Jackson Group, this week. Fryer told CJ: "It is not enough."

Last year, Jackson Group made a pre-tax profit of œ1.1 million from a turnover of œ79 million. Two years earlier, when turnover stood at œ62 million, Jackson made a pre-tax profit of œ900,000.

Civil engineering accounts for 50 per cent of the group's turnover, with building accounting for a further 25-30 per cent.

Michael Hodgkinson, md of FJ Construction, Jackson's building division, said: "We are picking up an increasing workload in building. A lot of this is in the traditional tendering market, though, where margins are very tight.

"We generally go for œ1-œ3 million schemes within a 100-mile radius of our base in Ipswich, Suffolk. However, we'll go anywhere with existing clients. We've done schemes recently in Bristol, Wales and Coventry," he said.

In April, Jackson changed the name of its civil engineering division from Roadworks 1952 to Jackson Civil engineering. "The move has gone down well," said Peter Andrews, md of Jackson Civil Engineering.

"The old name didn't reflect the range of work we now carry out. We do sea defences, sewerage schemes and a whole raft of infrastructure, including rail work. At the moment there are reasonable opportunities for us and we're progressively moving the margins up."

Fryer has led a drive within the Jackson Group for more negotiated work. "In difficult times a lot of work was done at competitive prices, but adversarial conflicts and poor quality of work have led many clients to see that lowest price is not necessarily best."

Two clients offering negotiated work are Palmer & Harvey and the Bradford Property Trust. "They come with plans and we fill in the detail," explained Fryer. "It works because we trust each other."

Fryer believes that, for the industry to achieve Latham's 30 per cent savings in building costs, contractors must be allowed a greater involvement at the design stage.

"We are moving in the right direction," said Fryer, "but procurement systems don't allow for it, except for Design & Build.

"At this moment the industry is in the middle of change," said Fryer. "Local authorities and county councils are not necessarily awarding on a lowest-wins basis any more. Instead, they are looking to be innovative. We will get a better contracting industry out of these moves."

While offering support for greater standardisation, Fryer said he didn't want every building in the country to look like a Little Chef cafe.

Some 60 per cent of Jackson Group's staff have been with the firm for more than 10 years. "Stable management encourages clients," said Andrews.

"On top of that we enjoy what we're doing. We're great enthusiasts. Over the Christmas period last year we had four briefs to do for clients: most of our staff wanted to come in and do the work. That's how keen we are."