Morgan Sindall issues profit warning over contract issues

John_Morgan Morgan-Sindall

John Morgan

Morgan Sindall Group issued a profit warning today admitting it expects its full-year results to come in below previous expectations due to problems faced with contracts in its London and South business.

The company said that, while it saw a good performance in its Affordable Housing, Urban Regeneration, Fit Out and Infrastructure arms in recent months, its full-year results would be below its previous expectations, issued on August 5, due to construction contracts in London and the South, which have been delayed and for which the company has incurred extra costs in order to complete.

The main problems came in its Construction & Infrastructure division, where the delivery pressures in London and the South impacted overall performance.

It said the issues were related to a “small number of fixed-price construction contracts” due to be completed in the next six months. Morgan Sindall said it was forced to use additional resources to complete the contracts. In addition, it incurred further costs due to contractual penalties imposed due to the delay to the projects.

In addition, the company said the construction site for the £15.8 million GlaxoSmithKline Carbon Neutral Laboratory of Sustainable Chemistry at the University Of Nottingham was destroyed by a fire.

Due to those problems, the division is now expected to post a full-year performance below expectations, with full year operating profit margins for the Construction & Infrastructure business cut from 1 per cent in 2013 to 0.3-0.5 per cent.

Elsewhere, the group said its Fit Out business traded well and said it expects the full-year result for this business unit to exceed expectations. Its Affordable Housing business has traded in line, but it said some of the projects handled by its Urban Regeneration arm would be delayed to 2015.

Morgan Sindall’s order book at September 30 was £2.7 billion, down 2 per cent on its half-year position at June 30 but 12 per cent ahead of the start of the year.

Chief executive John Morgan said: “We are obviously disappointed that a small number of construction contracts in London and the South have been impacted by timetable slippage and increased estimated costs to complete. This is a short-term and localised issue which is receiving the highest level of management attention and which should be worked through over the next six months.

“We firmly believe that the medium and long term opportunities and prospects for the group remain very attractive, as demonstrated by the higher quality order book and pipeline.”

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Dundee V&A delayed as discussions continue over price

Dundee_V_A_new

Construction work on the V&A at Dundee has been delayed, a senior councillor has admitted, after it was revealed just a tenth of the project’s budget has been spent so far this year.

According to The Evening Telegraph, a new report says that just £146,000 had been spent on the project up until August 31 despite plans to splash out £11.395 million on the museum before March 31.

It is understood that the gap between spending to date and the 2014/15 budget is because preferred contractor BAM Construction, and Dundee City Council, have yet to agree a fixed price for the project, which has had a £45m price tag for several years.

Councillor Will Dawson, city development convener, admitted the talks with BAM had caused a delay, with official documents previously planning an August start for the V&A’s construction.

He said: “With a project of this complexity, you are going to get delays.

“We had a timetable previously, which gave an idea of where we wanted to be at what time.

“Since then, tenders have been placed and we have had to go into further negotiations.

“Work has been delayed slightly by this process, but we have got to get the best possible value for the city, so we need to make sure the price is right and that adds time.

“The talks will last for as long as it takes.”

However, city council Labour Group leader Kevin Keenan says councillors outwith the administration “are not getting the information needed to establish a true picture”.

He added: “The officers involved in the V&A project have decided that it is the best kept secret in town and only those involved in the administration know what is really going on.

“My own personal opinion is that the project is miles off budget and I don’t believe that it is on track either.

“I don’t believe they are meeting their cost envelope, which is a real problem.

“The project poses a lot of economic risk to the city and I wouldn’t want to see any potential economic growth for the city falling flat on its face.”

A spokeswoman for BAM Construction said: “BAM Construction is continuing to work on the detailed planning of the project, so that we can prepare a fixed price proposal to Dundee City Council.”

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Aberdeen Airport’s £15m terminal transformation takes off

Aberdeen aiport revamp
The first official phase of a massive transformation project got underway at Aberdeen Airport this week.

Airport MD Carol Benzie got the work started with the swing of a sledgehammer and marked the beginning of the demolition phase at the beginning of this week.

The project will see the expansion of departures lounge, new catering and retail space, international arrivals improvements, a new expanded security search area, and increased executive lounge capacity.

Work has been taking place for some months on enabling projects including new check-in desks, the building of a new vestibule and terminal entrance, the relocation of some stores before security and the introduction of a new catering outlet which is due to be open and operational next month.

The demolition of what was the DHL building next to the main terminal, and the relocation of services, in turn clears the land required for the extension of the building.

Carol said: “We got the green light for this transformation nearly a year ago, and we have been working on the plans for nearly three years and so it feels great to finally be able to say we are off the ground. The tenders for the main construction phase are now out and we are all looking forward to seeing the construction phase begin next.”

Much of phase one will happen out of the public view, and as such the airport has set up a dedicated web page and web-cam to allow everyone to watch the works as they progress.

John Deffenbaugh is the head of terminal transformation and is leading this legacy project, which is set to transform each area of the customer airport experience when complete.

He said: “We know that the terminal is a very busy place and the main objective of this project is to create more space to ensure that passengers can make their way through our airport in comfort. We will extend the terminal by 30 per cent to create new immigration and international arrivals facilities, together with executive lounges upstairs.  We will then reconfigure the existing terminal, creating a larger security search area and increasing the size of the departure lounge by almost 70 per cent.  More space is something that our passengers consistently tell us they want and the project is a fantastic opportunity to deliver on this.  It is exciting to watch the initial demolition works get started after months of planning.”

The work, which will see in excess of £15 million investment, is scheduled to be completed around the start of 2018.

And finally… British firm offers zombie-proof log cabin

tiger_log_cabins

A West Yorkshire firm is selling what it claims to be the world’s first zombie proof log cabin.

Leeds-based Tiger Log Cabins is offering a 10 year anti-zombie guarantee with its ZFC-1, Zombie Fortification Cabin.

The structure consists of three connected buildings and its featured qualities add up to a personal log fortress.

It comes with reinforced slit windows, walls and doors, a barbed-wire surround, an escape hatch, and a living room with Xbox, TV and sound system.

It also features an arsenal storage unit to secure your anti-zombie weaponry and an upper deck with a full view all around so you can keep an eye out for the oncoming hordes.

There’s also a toilet system, garage, kitchen area with microwave and a garden section to start a small produce farm.

The customizable 44ft x 30ft cabin starts at £69,995 for the base model. Installation costs an additional £12,995.

Available extras include security cameras, riot protection outfit, big bear water cannon, flame thrower and search lights.

“Please note – we require medical evidence of the presence of a real zombie should you wish to claim under the 10 year anti zombie guarantee,” warn the makers.

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Building Briefs – October 24th

Novus Property Solutions

Novus announces £1k giveaway winner

Property maintenance and refurbishment specialist Novus Property Solutions has announced that Glasgow-based Red Star Athletics Club is the winner of its Grand Giveaway.

Contractor Novus called on Glasgow’s sports clubs to apply for the £1,000 prize after staff at the firm’s Roystonhill office were so inspired by the Commonwealth Games.

Novus wanted to mark the event by supporting a local sports club and the team was inundated with applications when the giveaway opened.

After careful consideration, Red Star Athletics Club, which has been supporting athletes of all abilities and disabilities for 25 years, was named as the winner.

The club, which trains at Crownpoint Sports Complex, has about 60 members of all ages who participate in a range of athletics and sports including wheelchair racing, race running and club throw.

 

Tulloch Developments to create new jetty

Tulloch Developments has confirmed it is to build a new jetty in the Shetland Islands area.

The £16.5 million contract will see the firm create the structure for Lerwick Port Authority. The 800m jetty, located at Holmsgarth North, will allow for deeper berthing and a larger working area for the local fishing fleet, it has been said.

Arch Henderson LLP will design and project manage the scheme.

Work is expected to begin on site before Christmas, with a scheduled completion date of autumn 2016. Around 50 jobs will be created during the construction phase.

 

West Dunbartonshire Council awards major housing refurbishment contract

Hanson Structherm has won a major contract to supply is structural external wall insulation (SEWI) system to a large housing refurbishment scheme for West Dunbartonshire Council.

The company is providing 10,800m2 of SEWI to renovate three 16-storey high rise blocks – Clyde Court, Park Court and West Court in Littleholm Place, Dalmuir. The SEWI system will be used on the first floors and above while Structherm’s Wonderwall real brick slip insulated cladding system will be applied to the ground floors.

Hanson Structherm said its SEWI system was specified for the refurbishment as it provides structural stability while greatly improving the thermal performance of the flats, reducing both CO2 emissions and on-going energy costs.

The work is scheduled to start later this month and is expected to last 12 months.

 

Homes site may block abandoned tram spur revival

An investigation has been launched over fears that a housing development could block the construction of an abandoned portion of the Edinburgh tram network.

Planning officials said they are looking into whether developers building a three-storey block of flats, which was granted planning permission in April, have broken rules protecting a corridor of land originally intended for trams.

Construction has already begun on the eight-flat mixed residential and retail development at the corner of Wester Coates and Balbirnie Place, in the west of the city.

 

Sainsbury’s to open up in revamped Princes Street Mall

Sainsbury’s is set to open a branch in the Princes Mall as the complex prepares for a £3 million revamp.

The supermarket giant will open a convenience store in the shopping centre in December.

The announcement comes months after it emerged the Post Office will be moving to the Princes Street venue from nearby St James Centre.

 

£1m hall hopes for Muir of Ord

The dreams of a new community hub for a village are set to be realised following the announcement of a £1m plus lottery grant.

The Muir of Ord Hall & Facilities Company will use its award of £1,156,957 award to refurbish and extend the existing Old Tarradale School in Ross-shire.

This will provide a new community-owned facility offering social and learning opportunities for 3,300 residents, as well as visitors.

 

Aberdeen travellers’ site plan set to be dropped

Plans for a new permanent halting site for travellers in Aberdeen are set to be dropped.

Aberdeen City Council had identified Howes Road, between Northfield and Bucksburn, as the preferred location.

The site is included as a travellers camp in the local development plan which will be discussed next week.

The ruling Labour-run administration amendment will go to the communities, housing and infrastructure committee. It calls for the Howes Road proposals to be dropped.

 

Village halls to benefit from solar power

A number of village halls in the Highlands area are to benefit from free solar power, it has been announced.

The initiative is being made possible through a £100,000 grant from SSE’s Sustainable Development Fund.

Launched in 2013, the project is managed by the charity Community Energy Scotland and fully funded through SSE’s onshore wind community benefit programme. The solar scheme allows community-owned organisations in the Highlands the opportunity of a free 4kWp solar panel system for their building.

Each solar system is expected to generate around 3,200KWh of electricity a year, leading to an annual energy cost reduction of between £800 and £1,000 per building for 20 years.

Korrie Renewables, a Highland-based company, will be responsible for carrying out the work.

A total of 11 community buildings in the Highlands will eventually be part of the scheme, but the first halls to be included will be located in Ardgay and Bonar Bridge.

 

Glaisnock House to be transformed

A former stately home in East Ayrshire is to be transformed by its new owners, it has been announced.

Glaisnock House, which is located on the outskirts of Cumnock, now belongs to Chinese buyers, and East Ayrshire Council has said they plan to turn the property into a Chinese language and cultural centre.

It will also include a business hub for Chinese students, as well as entrepreneurs from the Far East regions aiming to establish new business links in foreign markets.

 

Denburn development dropped

Council officials have reversed plans to earmark a key area of land on the edge of Aberdeen city-centre for a major retail expansion.

Local residents and businesses were consulted earlier this year on proposals for the Denburn and Woolmanhill.

More than four-and-a-half acres were set aside for retail use in an early version of the city’s local development plan.

But in a new document being presented to councillors next week, the area is designated as suitable for a range of options including a hotel, healthcare, residential, office and business use.

The land houses the Denburn car park, health centre and the A- listed buildings at Woolmanhill Hospital.

Rosemount and Mile End community council raised concerns during the initial consultation that the existing infrastructure in the area would not be sufficient to cope with a retail development on a par with the Union Square shopping centre.

 

Inverness Royal Academy to reopen on Monday after emergency repair

An Inverness secondary school will reopen on Monday after emergency repairs to a chimney.

Inverness Royal Academy was forced to close two days before the start of the October holidays because of problems with the boiler flue.

A routine inspection on October 9 revealed an issue with the structure which require more detailed examination and repair.

Highland Council said that the work was successfully carried out during the two-week holidays.

Scaffolding will be removed over the weekend and staff will return for their in-service day on Monday.

The school, which has a roll of 931, is due to be replaced by the council at an estimated cost of £35.4 million.

In August, the first turfs were cut at the new school, which is scheduled f or completion in June 2016 and will open to pupils in August of the same year.

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Increase in new home registrations greeted with caution

CEO of Homes for Scotland, Philip Hogg

Philip Hogg

Homes for Scotland has greeted the 9 per cent increase in new home registrations north of the border with caution.

The figure for July-September, compared with the same period a year ago, was reported yesterday by NHBC. It also noted that UK house building has hit its highest level for seven years.

Philip Hogg chief executive of Homes for Scotland was keen to remind the industry that the increase in new homes followed a sustained period of falls in Scotland.

He said: “Whilst these statistics are encouraging, we believe this increase will be negatively impacted by this year’s funding for the Scottish Government’s Help to Buy (Scotland) shared equity scheme running out in July and that this will be reflected in future figures towards the end of the year and early 2015.

“Given the scheme generated nearly 5000 reservations and sales in just ten months, this funding interruption resulted in significant business uncertainty as the industry awaited the Scottish Government’s next move.

“Even with the recently announced reduced price ceiling of £250,000, we still suspect that the £100 million budget for 2015/16 will be insufficient to last the full year.

“We therefore hope that Help to Buy (Scotland) will benefit from some of the extra £125m housing investment announced in the draft Budget so that builders have the confidence to invest in more much needed housing development.”

Construction Leads – October 24th

MIXED USE and NON-RESIDENTIAL

Applicant: Hargreaves Surface Mining Ltd
Planning Authority: East Lothian
Details: Planning permission in principle for remediation of site and creation of new settlement comprising residential, employment, education and commercial uses with park and ride and rail halt facilities and associated works
Location: Blindwells, Tranent, East Lothian
Agent:  Turleys, Per Claire Semple, 80 St Vincent Street, Glasgow,

RESIDENTIAL – FEWER THAN TEN UNITS

Applicant: James Logan & Co
Planning Authority: Stirling
Details: Construction of 2 new dwelling houses on site of existing slurry tank and silage pit
Location:  Powis Mains, Blairlogie, Stirling
Agent: Bobby Halliday Architects, 3 The Avenue, Bridge Of Allan

Applicant: Mr John Kyle
Planning Authority: Stirling
Details: Proposed steading development, involving the demolition of existing farm buildings currently in a state of disrepair, of three new dwellings constructed on the same footprint as the original buildings and parking provision to be provided by informal spaces surrounded by selected areas of indigenous planting
Location: Land and buildings at Greenfoot Farm, Stirling
Agent: Mparchitecture Ltd, Macfarlane Gray House, Castlecraig Business Park, Springbank Road, Stirling

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Barr Construction completes new Tesco in Dunfermline

Tesco Dunfermline Barr

Provost of Fife Jim Leishman has officially opened the brand new 52,000 sq ft Tesco superstore in Dunfermline created by Barr Construction.

The new store features over 500 car parking spaces and has been built using special external treatments to help it blend in with surrounding buildings. The store will also make use of the local authority’s district heating system which converts methane produced from up to 40,000 tonnes of local food and garden waste into renewable energy and heat.

The Barr team joined store manager Richard Moir and local senior fire officer Iain Vincent and crew to cut the ribbon and welcome customers from the community to the new store.

The Tesco superstore will offer customers a wide variety of household grocery items in addition to a variety of fresh food counters including a choice of British meats, sustainably sourced fish and a pizzeria.

As well as the fresh produce, the store has a clothing department, phone shop and Decks restaurant offering a carvery service at lunch and in the evening plus a wide range of sandwiches, cakes and salads.

Andy Ferguson, operations manager at Barr Construction, said: “We have enjoyed working on this keenly anticipated store for Dunfermline which will provide a range of facilities and services for the local community.

“Barr Construction has worked on a number of elevated stores like this one for Tesco and following the successful completion of the Dunfermline project, we look forward to the exciting next stage in the relationship we have forged with the retailer over the past two decades.”

Richard Moir, store manager, added: “We are really excited that the launch of the new Tesco store in Dunfermline is here. As a team we have been working incredibly hard over the past few weeks and months to prepare and offer Dunfermline a larger range and increased convenience.

“We wanted to make sure that everything was perfect when we welcomed our first customers in to store. We are sure that shoppers will be impressed with not only our food but also our range of non-food as well.”

Barr Construction has recently completed further Tesco superstores in Linwood and Stourport.

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City Building delivers 81 new apprenticeships in 2014

New apprentices with City Building chair, Cllr Paul Carey

New apprentices with City Building chair, Cllr Paul Carey

City Building (Glasgow) LLP has continued to lead the way in delivering apprenticeships by recruiting 81 apprentices this year and offered contract extensions to 127 time out apprentices.

The apprenticeships have been created in construction, painting and decorating, electrical, plumbing and administration.

City Building, Glasgow City Council’s arm’s length construction firm, has noted addressing youth unemployment as a key commitment.

These new positions help to support the delivery of Glasgow City Council’s £25 million Glasgow Guarantee, which aims to ensure that every Glaswegian between the age of 16 and 24 has access to a job, training or apprenticeship opportunity.

As confidence returns to the construction sector – as evidenced in a recent Scottish Building Federation survey – City Building is once again at the forefront of investing in craft apprenticeships.

Ibraheem Kahn (18) from Pollokshields was one of this year’s intake of new apprentices.

He said: “Gaining the apprenticeship is a really big achievement for me.  I found it very difficult to find an apprenticeship but I got lots of encouragement from my support worker.  Before gaining this apprenticeship, I volunteered in a carpet company for six months and also participated in a vocational course at City Building’s Skills Academy.

“Without this apprenticeship, it would be impossible for me to train to this level. One of the great things about an apprenticeship is you are paid while you learn. Thanks to this, I will achieve an SVQ3 in carpentry and joinery and will be a qualified joiner when I’m 22.”

Jordan Turner (18) from Knightswood started his apprenticeship in joinery earlier this year.

He said: “I’ve always wanted to be a joiner and enjoy practical work.  I applied last year but didn’t get selected so I went back to school for another year, gained some Intermediate two qualifications and was successful this time round.

“I’m looking forward to becoming a joiner. I think I will be able to complete other qualifications while I’m here and hope to complete an advanced craft or an HNC. There are definitely lots of opportunities for me.”

Councillor Paul Carey, chair of City Building LLP, added: “City Building continues to make investment in new apprenticeships a top priority and I am pleased to welcome our latest intake to the firm.

“These positions demonstrate our continued commitment to investing in Glasgow’s young people, providing them with the opportunity to learn a trade and gain meaningful employment.

“As optimism returns to the construction industry, it is vitally important that we equip young people with the skills needed to develop within the sector and we are happy to offer these 81 individuals the opportunity to create a brighter future for themselves.”

City Building runs one of Britain’s largest apprenticeship programmes and operates two of the most successful, award-winning training centres – Queenslie Training Centre and the Skills Academy in Laurieston.

Green light for East Renfrewshire health & care centre

Eastwood Health & Care Centre courtyard

Health secretary Alex Neil has announced the go ahead for the new community health and care centre in East Renfrewshire and another facility in Glasgow.

Eastwood Health & Care Centre, to be located in Clarkston’s Drumby Crescent, will be a new-build multi-purpose development for health and social care services, incorporating four GP practices and community health services including clinics, podiatry, physiotherapy, children’s services, adult mental health services, speech therapy, district nursing, health visiting and East Renfrewshire Council’s social work team.

The project is funded by the Scottish Government and developed by hub West Scotland, in partnership with the Scottish Futures Trust, East Renfrewshire Council and NHS Greater Glasgow and Clyde.

The health secretary also confirmed investment for another facility in Maryhill, Glasgow.

The Scottish Government will invest a total of £21.7 million in two new centres, £12.4m in Maryhill and £9.3m in Eastwood. East Renfrewshire Council will provide £5.5m towards the cost of the Eastwood centre.

Work will start on site on Monday 27 October.

East Renfrewshire Councillor Alan Lafferty, chair of the CHCP Committee, said: “This is wonderful news for East Renfrewshire and the culmination of a huge amount of partnership work between East Renfrewshire Council, NHS, hub West Scotland and Scottish Futures Trust. I am delighted that work can now begin on building this much needed facility.”

Health Secretary Alex Neil said: “These new centres will serve Eastwood and Maryhill well for decades to come. Along with the Shields Centre, they represent a significant investment by the Scottish Government in the west of Scotland.

“These new buildings are not just good news for the patients and staff of the NHS. Investment on this scale has a tremendously positive effect on the local economy – creating jobs and apprenticeships and helping local businesses.

“The Scottish Government has an investment programme of more than £8 billion over the next two years – supporting around 50,000 full time jobs in Scotland. We remain convinced this is the best way to protect jobs and keep the Scottish economy growing.”

Debbie McNamara, chief executive at hub West Scotland added: “We are delighted to be working with our public and private sector partners on these projects which will deliver significant improvements in the facilities and services available to the Eastwood and Maryhill communities.

“With the confirmation of funding now in place we move into the next exciting stage of development with the project teams lined up to start work on-site this month.”

Morgan Sindall has been appointed by hub West Scotland to lead the construction phase of both projects.