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Emcor UK chief sets sights on 50 per cent growth

Emcor UK chief executive Keith Chanter has targeted 50 per cent growth in turnover over the next five years – and wants the company’s profit margin to grow as well.

Mr Chanter believes the engineering services and facilities management firm could go further and double in size within a decade if the low-carbon building market reaches its potential.

Emcor UK posted its 2009 results last week, revealing that operating profit was up by 50 per cent from 2008 despite a drop in turnover.

In an interview with H&V News’ sister title Construction News, Mr Chanter said Emcor UK had been working hard to put the business in a position to grow.

“There is no point having a fat turnover if you are not doing jobs well and making money from them,” he said. “I would rather have a tidy turnover and a higher profit.

“This was our best profit figure this decade – and I want to see profit margin continue to grow. We are at about 3 per cent now, and I would like to see 5 per cent within five years.

“But I also think we can grow turnover by about 10 per cent per year – we could be 50 per cent as big again by 2015.”

He added: “We have a fairly resourceful balance sheet and can maybe accelerate that growth.”

The firm made an operating profit of £11.6 million in the 12 months to 31 December 2009 – up from £7.7m in 2008. Pre-tax profit also rose, albeit by just 3.7 per cent to £11.2m.

The company believes it increased labour productivity by 10 per cent in 2009, using a 77-point plan it implements through an innovation academy.

Of its 3,100 workers in the UK, about 650 are in construction and about half of these are directly employed.

The division works across the education, custodial and health divisions among others, mainly as a subcontractor but also increasingly as a main contractor providing energy infrastructure buildings.

This increased need for clients to improve the energy efficiency of their estates presents an opportunity to both sides of the business, according to Mr Chanter.

“The green agenda is being driven by legislation, economics and image,” he said.

“The engineering business is able to retrofit existing buildings, and work on new buildings, to make them more energy efficient, while the FM business can manage the
buildings effectively.”

He added: “I think the FM part of the business could be two to three times bigger within 10 years – and similar opportunities exist for engineering.”