CEO Insight – Growing Momentum
26/7/21: CEO Mark Lawrence provides analysis on the half yearly results for the half year ending June 30th 2021.
I am delighted that we have been able to report strong results alongside strong future prospects earlier this week. But as ever, it is helpful to add some analysis and insight on top of the results data and our investor pack which I do urge people to read.
So, for my colleagues across the business, our shareholders and all those interested in TClarke, I am going to do that.
In a nutshell, as leaders of the business, our purpose is to achieve a significant medium term growth target of £500m revenue and then to sustain it.
Winning strategy and winning projects
First I want to underline the link behind having the right strategic focus across the business and actually succeeding out in a competitive market.
Our strategy is very clear, we have set it out on this website. We keep margin discipline, targeting projects that meet our margin requirement. We remain contractor of choice for landmark projects particularly in London, we keep the business balanced and take opportunities in new markets and we keep building long term relationships with clients and principal contractors.
The clarity and simplicity of this strategy – and the consistency with which we are applying it across the business has been a big business asset. We don’t waste time or efforts, we know what we are aiming at and all our teams have freedom to operate to achieve our goals.
Major Data centres pipeline is flowing
We identified major new opportunities in technologies. We invested to develop the skillset and resource in-house and we built relationships. Now, we have been able to share the news that we have secured three large data centre projects (aggregate value of £110m) and that one of them could bring in an extra £30-40m of revenue by completion in the first/second half of next year.
Moreover I can also say that the pipeline of data centre projects is worth billions and that we are actively bidding for £300m of contracts for delivery in 2022/23.
Growth in smart technologies
This growth picture is repeated across our smart technology operation where we currently have 18 projects within the order book delivering complex building controls and data via a ‘single pane’ graphic interface to reduce energy consumption, cut operational costs, lower carbon footprint and improve building ROI. Here in the business we have a growing team of highly skilled software engineers and associated specialists delivering these projects.
We have substantial growth in schools and hospital infrastructure projects too – and again the growth in the order book has been preceded by a growth in specialist expertise and resource capability.
The strategy is proving itself to be a good one – but you need to go out and win the work in highly competitive markets. We are immensely proud of the teams here at TClarke that have worked hard to secure our largest ever order book which now stands at £503 million.
In March of this year, I stated that we expected revenues and profit to build rapidly throughout the course of the second half of the year as our recently secured projects gain momentum. We have an excellent balance of projects across a wide range of growing sectors and our reputation for delivering high quality work remains a key strength of our business. With the current project programmes, we believe that the second half of 2021 will be the busiest in our history.
Quality of resource in depth
The success of our teams in winning work is matched by our success in shaping, building and utilising our in-house resources. As I also mentioned in March, we have placed continued emphasis on building the quality and depth of our resource, building skills, developing the pipeline of apprentices, specialist skills and leaders at every level in the business. This focus on skills and people is ingrained in our business – it is not a new thing by any means. And so we have actively built our resource and shaped our organisation so that we maintain our capacity to meet the growth in demand that we target.
Only a month ago we announced the winners of our Apprentice of the Year competition – I hope people outside the business recognise the value and power of this and numerous other career path programmes within business. We know very well that the scale and quality of our resource is our key business asset. So sustaining this is the foundation stone of everything we are doing now.
Strong numbers reflect a strong organisation
Overall our message will always be steady and sensible. Our focus on delivering quality work safely will remain key to everything we need to achieve. But in analysing these strong numbers and our considerable future potential, it is extremely important to realise that we are doing this in ways that sustain our culture, deepen our skillsets and relationships with partners and clients and expand our capabilities ahead of market opportunity. Once we achieve our revenue growth target, we intend to sustain it.