B&K scores in competitive arena

Bowmer & Kirkland's (B&K) construction division, which accounts for three-quarters of the group's £490m-a-year turnover, has put a greater focus on competing in the competitively tendered market at a time when many others have left this sector, finding it to be too cut-throat.
The policy hasn't harmed B&K's finances, with the latest results (12 months to 31 August 2003) showing a pre-tax profit of £21m (£20m) on a turnover unchanged from 2002. The performance represents a margin of 4.3%.
Finance director Melvyn Sheldon said: "The majority of construction work in 2003 was tendered work and that pleases us. Perhaps we are winning more because others have moved out. As our margin shows, we're certainly not buying work, rather we have developed an efficient operation.
"We've moved down this route over the past two years and we're pleased with the development."
B&K has four operating streams: construction; engineering; housebuilding; and development.
Housebuilding operates within a 96km radius of Derby, taking in East Midlands, South Yorkshire and West Midlands. Last year's throughput of 200 homes was a record for the group.
"The difference last year [in terms of housebuilding profitability] was that we held a lot of land that achieved planning permission and hence we got on sites for commencement. They did nicely for us. We see our optimum annual throughput as being 250 homes, with 200 being our maximum to date," said Sheldon.
In construction, by contrast, B&K is a national building contractor, active in all sectors, particularly hotels, commercial, food retail, distribution and
colleges.
"On project size, we operate across the board. We have a subsidiary that will go as low as £20,000 jobs, while the largest scheme runs to £80m," said Sheldon.
"Last year, we made profit from all four divisions. Construction was profitable, but development and housing were helpful."
Sheldon said the jump in trade debtors to £80m (£62m) and trade creditors to £94m (£74m) was "just timing". The highest paid director received £2.5m (£1m).
Six directors have a defined benefit pension scheme, and one has a defined contribution scheme. The company contribution to these schemes was £960,000 (£360,000).