Morgan Sindall lays off 600 ex-Connaught staff
A quarter of the staff transferred to Lovell have left since September.
Morgan Sindall has laid off 600 ex-Connaught staff, originally taken on when it snapped up the bulk of Connaught’s social housing contracts in a deal worth £28m last September.
As part of the deal, which saw Morgan Sindall take on contracts representing up to 80% of Connaught’s revenue, about 2,500 staff were transferred to Lovell, its social housing division. As only some of Connaught’s customers transferred work directly to Lovell, there was not enough work to keep them on.
“We took on Connaught staff but have had to make some redundant as not all the contracts came across” said John Morgan, chairman of Morgan Sindall. “We took these staff on, and paid them, and many of them helped us win the contracts we did but where that wasn’t the case, we couldn’t realistically keep them on.”
Morgan Sindall warned last October that some former Connaught employees’ jobs would not be safe after the failure to secure contracts, but the scale of the impact on staff levels had never been revealed. Initially the firm expected additional revenues of £200m per year from the Connaught business. However, when updating the stock market last year, after the deal, it said it expected to add about £100m in extra revenue. The Connaught business contributed £20.9m of revenue in the period from 9 September 2010 to 31 December 2010.
Lower than targeted revenue from the Connaught business is unlikely to have a major impact on the group. Morgan Sindall released its full-year results this week and said that, while its revenue fell, profits were flat, after allowing for one-off costs. Revenues fell by 5% in the financial year to 31 December 2010, ending the year at £2.1bn, compared with £2.2bn in the 2009 financial year. When adjusting for one-off charges, pre-tax profits were unchanged at £51.3m.
The group also benefited from cost savings of £21m during the year and this helped push its year-end cash balance up by £31m, to £149m. Its average cash balance during the year, which is a more accurate reflection of its true cash levels, was £63m, more than double the average cash balance it held during 2009.
During 2010, Morgan Sindall’s fit-out business saw an increase in revenues of 43%, to £415m. Despite the increase in sales, its profit margins fell from 4.7% to 3.7%, as competition for work increased in the sector. This is set to continue into 2011. “There is a lack of new space in the commercial sector but bidding is very tight for work in fit-out. [During 2011] our revenue will be down on 2010 and margins will continue to be under pressure,” said Morgan.
Source: Building.co.uk
Change or die, RIBA tells architects
An RIBA Building Futures report says architects will have to become better businessmen to compete with foreign firms.
UK architects will have to toughen up and become better businessmen if they are to have any chance of surviving the next 15 years, an RIBA report into the profession says today.
The survey – from RIBA think-tank Building Futures – claims the profession urgently needs to modernise and become more commercial, with too many firms pursuing architecture as a vocation rather than a business.
“It can sometimes seem the long shadow of the gentleman architect still hangs over the profession,” the report said. “To grasp [future] opportunities architects will need to develop greater financial nous and commercial acumen.”
Architects are also told to brace themselves for an invasion of new foreign firms from Asia and the Far East and the demise of design-led businesses.
Building Futures chairman Dickon Robinson said the UK would be attractive to firms looking to break out of their traditional bases. “We have already US and Australian firms here. Why will the Indians and South Koreans not follow them?”
Bigger multi-disciplinary firms like Aecom will become the norm, the report predicts, while the name “architect” could disappear from firm’s names and be replaced by “spatial agencies” and “design houses”.
We have US firms here. Why will the Indians and South Koreans not follow them?
Dickon Robinson
Robinson added that design-led practices, employing between 50 and 120 people and mainly based in London, would be most at risk from bigger multi-disciplinary outfits because of the types of jobs they did. “They will be squeezed on fees and I’m sure some will be acquired by larger firms,” he said.
But smaller firms of less than a dozen staff are likely to fare better, the report claimed, as they increasingly specialise in offering a bespoke service to local clients.
The RIBA, the report added, would then have to redefine what an architect does “in order to fit better with the 21st century reality of the profession”.
Even star architects are apparently under threat with predictions that luxury fashion houses could design new buildings.
“If Gucci decided to get into tower blocks and hotels, clients might like the idea of a building designed by them,” Robinson said.
The findings were drawn up after a year-long survey which involved interviewing architects along with engineers, builders and students to find out what the profession will look like by 2025.
The report also notes that since 2008 there has been a 40% reduction in demand for architects’ services in the UK, and predicts architects will branch out into other areas of the construction industry.
“A number of practices we interviewed were planning to formalise the diverse services that they offer,” said the report. It also said too many architects were carrying out pre-project work for free, claiming this would never happen in any other profession.
Source: BDonline
Design for London poised to survive spending cuts
Mayor’s advisory body set to continue in a reduced form as Design Council outlines Cabe’s future.
The mayor of London’s architectural adviser Design for London (DfL) looks set to survive the government’s spending cuts.
Following the news that central government quango Cabe will escape abolition through a merger with the Design Council, mayor Boris Johnson’s top architectural adviser Daniel Moylan said he was hopeful that DfL staff would be retained along with its name.
It has also emerged that seven out of around 20 DfL positions have escaped the current redundancy process including DfL head Mark Brearley.
DfL’s parent the London Development Agency (LDA) is set to be wound up in just over a year’s time with the Greater London Authority poised to take over many of the LDA’s functions. But Moylan told BD that all plans were provisional because of a final funding settlement being thrashed out with central government.
He added: “The mayor is keen, if he can, to retain some form of design presence. I think there is a good chance that the name DfL will also survive.
“The mayor will have a regeneration arm within the GLA and we would expect DfL to make a significant contribution to regeneration as it has in the past.”
Meanwhile at Cabe, remaining staff will find out next week who will have a job when the quango merges with the Design Council at the beginning of April.
Around 40 staff remain ‹ down 125 from a year ago ‹ with a total of 20 set to move to the Design Council’s Bow Street offices.
Cabe chief executive Richard Simmons confirmed this week he was stepping down for personal reasons. His deputy Joanna Averley and director of campaigns Matt Bell have already gone and Cabe Space director Sarah Gaventa is also set to leave.
But chairman Paul Finch is expected to retain a role as is Diane Haigh, director of architecture and design review.
Simmons, who said he wants to remain in the regeneration industry, added:
“Some [staff] are going to unemployment, some to academia and others to set up consultancies.”
Cabe has been given £5.5 million in funding from the communities department over the next two years, but Design Council chief executive David Kester admitted he had been told that funds would have to come from elsewhere after that. “The main objective is to create a self-sustaining model,” he said.
Kester said the Cabe name would not completely disappear, with its logo likely to feature on its website. He added Cabe's main functions would be to continue with design review and enabling work. But he admitted it would only be able to carry out a fraction of the 350 design reviews it handled last year.
“Reviews and enabling are going to be at the heart of what we do. It does take Cabe back to its early days,” he said.
Source: BDonline
Art-Deco Private Office – Surrey
Yechte Consulting finalises an interior render for a private Art-Deco office in Surrey.
Shapps confirms Cabe merger with Design Council
Wait is over as government confirms Cabe’s work will move across.
The government has confirmed that architecture quango Cabe is to merge with the Design Council, after weeks of delay.
Housing minister Grant Shapps said he wanted to create a “one-stop shop, providing a service to industry, councils and local communities.”
The announcement was put back two weeks ago in order to secure the permission of deputy prime minister Nick Clegg, because the decision affects quangos working for three government departments.
Grant Shapps said he wanted the merger to allow local residents to have a much greater say over how their communities are designed. He said: “By merging these elements of the Design Council and the Commission for Architecture and the Built Environment, we can continue to improve the local support that is available for people to do this, and build on the strong track record in offering mentoring, training and support.”
“This merger will not only mean the excellent work the Commission has already undertaken can continue, but will also ensure that every taxpayer’s pound spent on improving design is spent wisely and efficiently,” he added.
The combined organisation will focus on:
- Design Review, which provides expert advice to councils, developers and communities through reviews of major proposed projects
- Promoting the value of good building and spatial design to businesses and communities and, in particular, facilitating well-designed new homes and neighbourhoods
- Mentoring and advice to businesses, public services and university technology offices on the use of design
- High profile design challenges which bring together the best in design, manufacturing and services to develop and introduce innovative solutions to national issues in health, security and sustainability
However, it did not confirm that current Cabe chair Paul Finch will transfer across to the Design Council, as expected. Current Cabe chief executive Richard Simmons will step down for personal reasons.
The Design Council board will be expanded to include a number of current Cabe commissioners, although it is not thought that all will transfer, with the statement confirming that “a new governance structure for the Design Council will also be put in place to equip the new organisation to deliver its new broader remit.”
According to a leaked government documents last week, Cabe will officially be wound up under the merger, with only 20 of the 125 staff it had in 2010 transferring. The Design Council will also lose around 40% of its staff under the move.
Today’s statement said the Design Council will be consulting with CABE staff in the coming weeks to finalise the roles which will continue to deliver the Design Review services, as part of the new organisation. It said these will be confirmed, along with the new organisational structure for the Design Council when staff consultations in both organisations have been completed.
The merger will see the Design Council cease to be a Non Departmental Public Body but retain its charitable status and become an independent not-for profit organisation incorporated by Royal Charter. It will continue to act as advisor and intermediary delivering key services to government. In addition to Cabe’s work, it will now focus on three areas: design demonstration, knowledge networks and design policy advice to government. The target date for the transition is 1 April 2011, subject to agreement by the Privy Council and Charity Commission.
Paul Finch said the merger was a “very positive move” that will “place architecture at the heart of the economy as a driver for competitive businesses and places.” He added: “I am very much looking forward to the combined expertise of our two organisations to coming together to achieve that.”
Source: Building.co.uk
Real Estate Prices Stagnant in UAE’s Northern Emirates in Q4
DUBAI, UAE - The Northern Emirates property market has stayed relatively stagnant during the last quarter of 2010 with minimal price or rental movements. Continued supply, most notably in Sharjah will at some stage put downward pressure on rental prices, but connection to electricity, water and sewerage is a problem, slowing the pace of supply throughout the Northern Emirates, according to data from Asteco Property Management.
"During the past three months, the Northern Emirates have remained at a standstill, with rental rates for apartments, villas, and offices similar to the previous quarter. Although new supply is expected to drop rates further, delays in the actual handover of units is likely to prolong the process," said Elaine Jones, CEO, Asteco Property Management.
Across the Northern Emirates apartment, villa and office markets have remained relatively flat over the past three months. The ripple effect of affordability predominant in Q3 2010, which saw tenant migration to neighbouring emirates such as Dubai continued in Q4 but more slowly, consistent with the slowing rate of decline in Dubai.
The Asteco Northern Emirates Q4 2010 report reveals that three-bedroom apartments in Sharjah are priced in a range from $10,218 per year in Al Yarmouk to $12,670 in areas such as Al Khan and Al Nahdah. Umm Al Quwain, meanwhile, is still the most affordable emirate with average annual rates of $6,811.
The Sharjah villa market did not record any price changes from Q3 to Q4 with Al Quz, therefore, remaining the most expensive residential area for villas at $22,480 a year for three-bedroom properties. Elsewhere, Al Khan, and Shargan commanded $21,798 and $20,436 respectively for three-bedroom villas.
"A number of residents living in the Northern Emirates have moved around internally, seeking value for money and better located units; however, there has been no evidence of an increase in population to occupy the vacant units," says the report.
Source: Real Estate Channel
Indian companies tighten grip on outsourcing: Nasscom
BANGALORE: India continues to lead the global outsourcing market with the overall share increasing from 51%in 2009 to 55% in 2010. As a proportion of national GDP, the sector revenues are estimated at 6.4% for the current fiscal.
The software industry apex body National Association of Software & Services Companies (Nasscom) forecasts the IT-BPO industry (excluding hardware) revenues to grow 19% to $76 billion. Som Mittal, president, Nasscom, said on Wednesday the pent-up demand for IT-BPO services, return of discretionary spending, new business models that encouraged first-time buyers and re-invented value proposition for existing ones were the key drivers for the industry performance.
The banking, financial services and insurance ( BFSI) vertical and US region accounted for the largest revenue growth. While the growth rate for emerging verticals and new geographies will also be robust at 1.3 to 1.5 times of core segments. Exports remain the mainstay of the industry contributing $59 billion at a growth rate of 18.7%. The IT services will grow the fastest at 22.7%. On the other hand, the domestic markets grew 16% to touch Rs 787 billion. Increased technology adoption across government, corporates and SMBs led to an increase in outsourcing within the domestic markets. The BPO export segment will grow by 14% to reach $14.1 billion. The BPO sector was impacted by delayed decision making and deal restructuring in the first half of the year, but picked momentum in the second half.
Nasscom said the engineering services landscape in India now reflects maturity and diversification to partner with global corporations. The engineering design and products development segment is expected to generate revenues of $11.3 billion growing 13.4% this fiscal. This is driven by the increasing use of electronics, technology convergence and need for localized products.
For the next fiscal, the software and services growth is expected to grow at 16%-18% with aggregate revenues of $68-70 billion. The domestic market is estimated to grow by 15% to 17% with revenues of Rs 90,000 crore.
As we step further, this decade heralds a new transformation for the industry. Transformative service delivery is always business focused, delivers confidence and manages risks, using modern business re-alignment; at the same time enabling sustained savings and value, said Mittal.
Source: Times of India
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