WET News

12 LEADERS 2019 THE LEADERS 2019 Revamped Clancy Docwra expects growth in water sector I ts offering covers utilities contracting, civil engineering, construction and railway engineering, but the bulk of Clancy Docwra's work is in the water industry. The company holds framework contracts with Anglian Water – where it forms part of the IMR and IMDS alliances, with contracts due to run to 2030 – as well as Southern Water, South East Water, SES Water, Scottish Water and Thames Water. Ahead of AMP7, Clancy Docwra and Kier have been awarded a contract to carry out leakage detection services for Anglian Water as part of the IMR alliance, which will involve an increased emphasis on technological innovation. Clancy Docwra CEO Matt Cannon tells The Leaders 2019: "While Ofwat is living up to its promise of AMP7 being a 'tough' regulatory period, we recognise that these challenges sit alongside the opportunity to create a truly modern water network. "One of our greatest successes in AMP6 has been harnessing innovation to tackle key drivers like network resilience. For example, the tools that we have developed with our technology partner Dootrix using MicrosoŽ's Azure platform have the potential to almost halve leakage investigation costs by using machine learning to identify leaks quicker and fix them more efficiently. "However, technology and data in isolation aren't a silver bullet for AMP7's challenges. The meaningful application of these innovations remains reliant on our people's expertise. "Our commitment to investing in the future success of our people and our partnerships is evident through our continued commitment to a direct labour operating model. While our competitors are increasingly moving to sub-contract- ing models, this allows us to draw on the expertise of over 2,500 employees who provide our clients with the capacity, sector expertise, stability and continuity they need." Clancy Docwra maintained a steady revenue of £263.8 million for the year CLANCY DOCWRA Clare House, Coppermill Lane, Harefield, Middlesex, UB9 6HZ. Tel: 01895 823 711 www.theclancygroup.co.uk ending 31 March 2018, although for the second year running it registered small losses. "The year to March 2018 was a difficult year for Clancy Docwra and for the industry as a whole," co-chairman Kevin Clancy said in the company's annual report in October. "External events have led many organisations to challenge the value and risk inherent in many of their contracts and to recognise in full any potential future losses." The company cited challenges in the energy sector and with its multi-utility business unit for the disappointing performance but has taken swiŽ action to change course, including revising the terms on which it will accept new business and making a series of senior appointments, including Cannon. Clancy said the outlook for the 2018/19 report is "far more positive" and that the company is expected to "return to profit and generate strong positive cash flow". A significant part of the reason for that optimism comes from Clancy Docwra's water business, which represents approximately 70 per cent of revenue. "We are experiencing a surge in demand in the water sector and anticipate that it will be sustained into the medium term, driven by increased industry investment necessitated by challenging leakage reduction targets," Clancy said. "We believe that our existing contracts, strong relationships and unique model leave us well placed to service this growth." He added: "We expect to extend the majority of our water frameworks beyond 2020 and to see our order book strengthen further." THE NUMBERS 13/14 14/15 15/16 16/17 17/18 % change Sales £m 262.4 278.5 258.0 264.0 263.8 -0 Gross profit £m 14.0 17.8 14.8 10.2 8.9 -12 Operating profit £m 3.2 4.3 3.1 -2.8 -3.2 n/a Pre-tax profit £m 3.0 4.0 2.8 -2.8 -3.6 n/a Staff 1,786 2,078 2,150 2,275 2,195 -4 Net assets £m 15.6 18.7 20.9 18.1 14.8 -19 THE RATIOS 13/14 14/15 15/16 16/17 17/18 % change Return on capital % 19.3 21.4 13.4 -15.2 -24.6 62 Gross margin % 5.3 6.4 5.7 3.8 3.4 -12 Operating margin % 1.2 1.5 1.2 -1.0 -1.2 n/a Net margin % 1.1 1.4 1.1 -1.0 -1.4 n/a Sales/employee £k 146.9 134.0 120.0 116.0 120.2 4 Matt Cannon hopes Clancy Docwra can help companies tackle AMP7's major challenges

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