Posted on Monday 27 August 2018 by Ulster Business
John Mulgrew speaks to boss Michael Graham about growing the business here and elsewhere in the UK, landing some major contracts, and the impact of Brexit on the construction sector
The re-branded and modern glass-clad offices of Hillsborough construction giant Graham Construction seem a fitting monument to the success of the Co Down firm in the last few months, in particular.
The huge success of the company in the last year has meant it’s soared from 10th to fifth on the Ulster Business Top 100 Companies list – making it the biggest business of its kind here, and one of the largest across the sectors.
Michael says the company employs around 2,200 people directly, but at any given time there could be between 5,000 and 6,000 working for Graham, through sub-contracting.
It’s working on some of the UK’s biggest infrastructure projects, with single contracts in excess of £200m.
Graham works across building, civil engineering and fit-out, and also has its facilities management arm.
Construction firms which weathered the storm of recession found much of their major work elsewhere in the UK, with some moving from a focus on public sector to private sector jobs.
However, closer to home Graham is behind some of Belfast’s largest construction schemes.
That includes the £53m Grand Central Hotel – a 300-bedroom development by Hastings Hotels which is now open, and the largest in Northern Ireland.
It’s also behind the ongoing construction of Erskine House in Belfast city centre, which will become HMRC’s new Northern Ireland headquarters.
“We are probably doing more work in Northern Ireland than we have ever done,” Michael said.
Elsewhere here it’s working on the A6 upgrade in a joint venture with Farrans, and is well into completing the Portland 88 apartment building on Ormeau Avenue.
In its latest accounts, the firm saw sales rising to £767m, with pre-tax profits of £13m.
“There have been a number of significant projects secured. The profitability is just under 2%, so a bit back,” Michael said.
“We have recently done a lot of rebranding. There have been some sub-contractor casualties which we have absorbed but we have won substantial (contracts).”
That includes a £165m scheme to build a hospital in Aberdeen – one of the firm’s largest single contracts.
“That is due to start next year,” Michael said.
“We have our first major job in Liverpool - a £50m residential scheme there, close to the Albert Dock.”
Others include a contract for the construction of a 5.5km bypass to the town of Congleton, Cheshire - the total scheme worth around £90m.
And what’s the strong growth down to?
“I think it’s a couple of things. We have a broad service offering. We have a number of divisions, from building, civil engineering, to fit-out. We are doing everything from schools, to universities to rented accommodation to hotels, swimming pools and leisure.
“We have a range of sectors, and within civil engineering we have marine, roads, bridges, and water. Fit-out would do a lot of work with Primark.”
Michael says getting some of the biggest, high-level projects only comes with building a solid base on similar schemes elsewhere.
“It certainly helps. You only get invited to the party if you are able to demonstrate a sufficient track record of silver-type projects somewhere else,” Michael said.
And Michael says a lot of the business comes through ‘frameworks’, where the business pre-qualifies for work, along with repeat clients. >
In London, he says it’s currently in the ground with three new leisure centres.
Since taking over as editor earlier this year, I’ve found myself once again having to ask and write about what impact a lack of an Executive is having on development across Northern Ireland.
And following the latest development in the proposed £240m Arc 21 incinerator for Co Armagh, in which an appeal was unsuccessful in challenging a High Court decision to overturn a civil servant’s green light for the scheme, what’s Michael’s view on the impasse?
“I think from someone who is working in the infrastructure field, at the minute there is no plan as to what Northern Ireland needs,” he said.
“… healthcare, for example. Civil servants can’t do any more, they can’t go in with the modernisation plans, because that needs to be signed off.”
The B word is also across Michael’s desk, as it is with others across Northern Ireland, the Republic and the rest of the UK.
And Graham is already taking decisions not bid on long-term facilities management contracts in London, as price-escalation is a major concern, with labour potentially becoming harder to secure following Brexit next year.
“There are a number of things. It will be the availability of labour and materials. Materials that come from Europe are potentially going to be more expensive, and subject to more checks. In London, 40-50% of the labour on site could be EU or non-UK. They really have to look at what freedom of movement measures are in place for construction.”