Highway and airport engineering group Colas said it is pumping fresh cash into its UK business and gearing up to spend ‘billions’ on takeovers in a bid to boost market share.
The French-based group, which operates in 20 locations across the UK, hopes its new ‘UK Projects’ division will clinch a string of domestic deals, including an upcoming tender for a highways project.
One of the group’s executive directors, Carl Fergusson, refused to give further details, but said the company has been in regular contact with the British government, which is ‘becoming more commercial’ in its approach to business and is welcoming foreign investment in light of Brexit.
Fresh cash: Highway and airport engineering group Colas are churning fresh cash into the UK
The group plans to focus on large infrastructure projects within the UK, rather than less-lucrative maintenance contracts.
Takeovers will also comprise a key part of Colas’ strategy. When asked how much Colas is willing spend on UK deals, Mr Fergusson said: ‘You will find that we’re not talking about millions, we’re talking about billions.’
He added: ‘The pace of change that we have decided that we want to achieve can’t be achieved just by organic growth. So it will require acquisitions.’
Mr Fergusson stressed that Colas’ UK investments were not prompted by Carillion’s collapse earlier this year, but admitted the collapse ‘presented some opportunities’, with hundreds of millions of pounds worth of unfinished public contracts having been left in its wake.
But, he stopped short of confirming whether Colas had put forward bids for those tenders.
He said: ‘We have looked at certain opportunities that have flow out of the Carillion collapse but we are bound by confidentiality agreements that we’ve signed with receivers’.
When asked whether Colas could fall into the trap of bidding for a raft of low-price contracts like those said to have exacerbated Carillion’s problems, Mr Fergusson insisted his company was focused on value over volume.
He said: ‘What we’re finding now is that clients are far more interested in the financial standing of the companies that they are looking to do business with.
‘So that’s really where we think we’ve got (an advantage).
‘It’s a significant component of our offer when we’ve got the backing of a 12 billion (euro) a year company with a very, very strong balance sheet. It’s definitely a strong part of our story.’
Colas UK, which employs around 1,500 people, currently has revenues of £300million a year, against the wider group’s £11.7billion worth of consolidated sales.
Globally, the group said it undertakes around 55,000 road projects a year, and has previously constructed a section of the M35 motorway in Hungary, widened two sections of the D1 motorway in the Czech Republic and upgraded sections on Interstates 64, 40 and 78 in the United States.
Big ideas: The French-based group plans to focus on large infrastructure projects within the UK