Water & Wastewater Treatment

4 LEADERS 2019 THE LEADERS 2019 Changing times as AMP7 looms Exclusive analysis for The Leaders 2019 shows some positive overall signs amid the gloom industry to 'modernise or die', and the company profiles here show that the modernisation process is very much underway, with many seeking to provide additional value through a range of creative and technological solutions, while there are signs that collaboration is increasing and training is improving. The financial analysis in this year's edition also suggests that, on the whole, the industry is heading in the right direction. Among all companies in our database, overall revenue has shown continued growth over the course of the five-year period to 2017, rising 3.97 per cent this time around to £32.3 billion, while net assets were up 12.9 per cent to £4.95 billion, reversing a two-year slump. Perhaps most significant is the rise in sales per employee, with an average ratio of £231,000 across all companies. That represents a second consecutive 8 per cent boost and, while some companies may have improved efficiency by cutting jobs, that is by no means a universal trend. Table toppers Balfour Beatty remained at the top of the turnover table, bringing in £6.9 billion, while it also topped the chart for net assets at £1.1 billion and pre-tax profits at £117 million. It is among those reaping the benefits of a reform plan, with chairman Philip Aiken saying aŠer the recent publication of the 2018 results that the company is "leaner and more effective", adding: "Thanks to the support and enthusiasm of our employees in embracing Build to Last over the past four years, we now have a Balfour Beatty fit and ready to seize the exciting opportunities presented by its markets." I t is a testing time for contractors, and the shadow of Carillion's demise at the start of last year still looms large. Interserve and Dawnus Construction entered administration in the early part of 2019 and, while the former has said it remains "business as usual" aŠer its assets were immediately moved to a group controlled by its lenders, such troubles provide a stern reminder of the current climate. Many of the contractors that have endured tough times are at least making progress with their reform plans, which oŠen involve streamlining and taking a more cautious approach to which contracts they are prepared to take on, but danger remains. Figures from the Bank of England show that lending to construction and civil engineering businesses has been cut consistently over a period of several years, and that situation appears to have been exacerbated by both the Carillion situation and ongoing uncertainty over Brexit. AMP7 will also present new challenges. Ofwat, facing political pressure, is demanding that companies deliver more for less, putting an emphasis on improved cost efficiency for PR19 while also raising the bar significantly on issues such as leakage and customer experience. With the supply chain already battling squeezed margins, the expectation that performance should meet unprecedented standards over the next five years may be unwelcome, but it is likely to create new opportunities. Water companies have little choice but to consider new approaches, which should mean more space for the supply chain to contribute ideas and collaborate. As Clancy Docwra CEO Matt Cannon tells The Leaders 2019: "In the fight to create an innovative, affordable network, a forward-thinking contractor is a water company's greatest ally." The Construction Leadership Council's Farmer Review memorably challenged the

• Cover