Atkinsā boss on the gains from being the engineering provider for London 2012, and on returning the firm to growth
As the UKās biggest multi-disciplinary consultancy by UK fees, Atkins can reasonably be expected to cater to a vast array of different clients. But horses? Strange as it may sound, in the build-up to the London 2012 Olympics Games, the firm found itself moving into the business of, to coin a phrase, equine solutions.
As the official engineering partner to the 2012 Olympics, Atkins found itself responsible for constructing the arena for the riding events in Greenwich Park. Owing to the requirements of the Gamesā sustainability standards, however, the ground couldnāt simply be prepared and stands erected around it as this would involve ripping up a large part of the historic parkland. Instead, the arena had to be mounted above the ground. And it soon became apparent that if the elite horses sensed that they werenāt standing on solid ground they got jittery.
āSo, we had to mock them up and then test them with our client, which in this case was a horse,ā says David Tonkin, chief executive Atkinsā UK business. āOf course, the horse couldnāt tell us what was going on, but the rider could tell us when the horse wasnāt feeling safe. So we interviewed the rider and ended up going through an iterative process.ā
After drafting in a huge range of specialists from across the companyās various divisions, a solution was eventually found and the equestrian events were able to proceed.
The tale of the sensitive filly is just one of a series of stories about Atkinsā involvement in the Olympics that Tonkin tells with obvious satisfaction and his characteristic ready smile over the course of our interview. (Another relates to the unfortunate interface between industrial air-conditioning units and 1.9 gram ping-pong balls.) Tonkin, an accountant rather than engineer by training, is obviously proud of the contribution his company made to the Gamesā success and believes that, quite apart from anything else, it gave his team a huge boost in morale, just as the company fights to win work and recover from the recession.
Iāve already got scale in the UK but niche market areas where i can see growth, then bolt-on acquisitions could be quite interesting
Of course, the fact that Tonkin can talk so openly and passionately to the press about Atkinsā involvement in the Games makes him unique in construction terms. While the other construction companies that helped deliver the Olympics were subject to the rigidly enforced No Marketing Rights Protocol, Atkinsā status as official partner means that the company is subject to no such restrictions.
Tonkin is unable to supply a figure for how much Atkins paid the International Olympic Committee for its privileged status, but he is keen to emphasise that the firmās appointment was the result of an open competition in which price was only one factor. However, asked whether he believes the financial cost to have been worth it in terms of the benefits partner status brought the company, he is unambiguous. āFirst off, I judge it on the experience that it allowed for us to get for our staff, which was immense,ā he says. āBut then it allowed us to showcase what we did. Atkins can be a little shy in terms of explaining what we do, but the Olympics gave us a great opportunity.ā
As an example, Tonkin cites Atkinsā work on remediating the land that would become the Olympic park. This, he says, means that the firm has a calling card that can be used to win work on any complex, large-scale remediation project. More immediately tangible, Tonkin says that Atkins has already won new work on the 2014 Commonwealth Games in Glasgow as a direct result of its work on London 2012. āWhen it comes to things like the Commonwealth Games there are very direct benefits,ā he says. āPeople can say āwhatās your credibility?ā and we can say āwell, we did this small job down in the South-east ā¦ā.ā
Surprisingly, however, Tonkin reveals that Atkins has made a decision not to seek work on the next Olympics in Rio, despite the companyās association with the widely admired London Games.
āWeāve gone out to help the British government promote whatās happened, but Rio really isnāt a target for us,ā he says. āOur feeling is that itās not worthwhile setting up an office in Rio. Itās not a territory we know well. We havenāt traded out there and we have enough other territories that we trade in that just following the next exciting project to a place we donāt know, where we donāt understand the working customs, is not necessarily our focus.ā
Rio or no Rio, the publicity that Atkinsā UK business has been able to generate from the Games couldnāt have come at a more vital moment. While the groupās 2011/12 financial report showed a growth in both revenue and profit, UK business revenue fell by 7% and operating profits dropped by 16%. However, the situation appears to have stabilised, with the half year statement for the six months to September 2012 reporting that the UK businessā revenue was unchanged on the same period in 2011 and operating profit was up 0.8% - not results that would prompt anybody to break out the Bollinger, but at least the decline has been addressed.
Tonkin says that he is now, at last, seeing new opportunities coming forward - particularly in rail, aviation and education ā and that the UK business is poised for growth, largely from domestic work, although the aerospace division is looking at opportunities in the US. Atkins UK is also recruiting again, having identified the need for about 1,000 new staff. In particular, he is keen to point out that Atkins is once again recruiting graduates at pre-recession levels. Having reduced its October intake to about 120 in 2010, Tonkin says that last
year the firm took on 250 graduates and that he expects to take on a further 350 in this yearās round.
Given that Atkins shed around 1,200 jobs in response to the recession and falling state infrastructure investment, would it be fair to suggest that the current emphasis on graduates will ultimately create a less experienced workforce? āNo,ā replies Tonkin succinctly. He expands: āWeāve got 9,200 staff, so to have 250 graduates in a staff of 9,200 is a pretty small dilution. And we do have a very experienced workforce, so a bit of rebalancing to make sure that weāve got fresh blood coming in to learn from that experience is very important.ā
Looking ahead, Tonkin expresses some confidence that the 2012/13 annual report will herald a return to growth for Atkinsā UK business. āIād expect to see a bit of modest growth in headcount and weāll be on target on revenue and profit and looking okay,ā he says. Whatās more, after last yearās sale of Atkinsā asset management business, Tonkin says that he isnāt considering further disposals or another restructuring of the business. āWe will be constantly looking at our portfolio, but thereās nothing [in particular] Iām looking at right now,ā he says.
Indeed, it seems that Atkins UK is once again in acquisitive mood. āWhat weāre unlikely to do is to buy bigger scale [companies], because Iāve already got scale in the UK,ā he says. āBut niche capabilities, niche market areas where I can see growth, then bolt-on acquisitions could be quite interesting.ā Asked whether he has his eye on any firms in particular, however, Tonkin just smiles. āIām always looking,ā he says.
It has, of course, been rumoured in the past that Atkins itself might be bought out in its entirety by a bigger firm. Tonkin doesnāt deny that such an event is possible, but it isnāt something that gives him restless nights. At 18,000 people worldwide, he says, Atkins is too big a fish to be easily swallowed up by a bigger predator. āObviously there are players up around 40,000 to 50,000 and we are seeing quite a lot of consolidation,ā he says. āBut weāre a very big bite at 18,000. Itās not something that worries us.ā
David Tonkinās CV
- 1984-1987 Bass Plc
Capital accountant and plant accountant
- 1987 - 1988 United ¾«¶«Ó°ŹÓ Society Christchurch NZ
Project accountant
- 1989-1992 Equipu
Financial controller of subsidiary of Eurocopy Plc
- 1992-1999 Hanson Aggregates
Group Financial director
- 2000-2004 Hanson Plc
Finance director - UK Aggregates
- 2005 - 2010 Atkins
MD and finance director - UK Rail Division
- 2010 to date Atkins
Chief executive officer, UK
No comments yet