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leaders 2016 13 measure value and really making sure what they want is what we want and vice versa. It's about matching that marriage going forward." In addition to Interserve's design and build capability, Tyerman believes a dif- ferentiating point that it brings to the table is the ability to design in-house pro- cess, mechanical and electrical works as well. Although this is not for a major project arena it is for the £5M to £7M sector, where Tyerman says most water compa- nies are operating in. "If we look at the number of projects that sit in the below £10M sphere of operations compared to the above £10M the vast majority of their work is sitting below £10M, and probably below £5M for us." A lot of the water companies' work is about process improvement, around effi- ciencies and changing the operating cost of assets. The latter is about changing the way that assets are operated or it is about changing the equipment that sits within the assets. "That's where our differentia- tor comes in," says Tyerman. He adds that Interserve is operating above that £10M threshold as well, and has projects worth £30M-40M within the water sector. Mirror Interserve's strategy for the water sector is to grow organically within the existing customer base. "That's as much about doing more of what we do now as well as developing or widening the service lines that we have with our customers. We might get into a build relationship and over time we develop that into a design and build relationship, and we then bring in a mechanical, electrical design service to that as well. "That's the organic aspect because it's within our existing customer base. Then it's targeting the customers that we really want to work with – those that when we look in the mirror there's a really good match with our core values with the way that we want to operate in the commer- cial model. There's no point going into a relationship where you are not going to be a sustainable business. You have to go into a relationship where both parties are in a sustainable position." THE NUMBERS 2012 2013 2014 % cHaNgE Sales £M 721.5 770.7 941.0 22 Gross profit £M 43.9 51.8 53.3 3 Operating profit £M 7.0 11.4 5.4 -53 Pre-tax profit £M 12.9 16.9 10.6 -37 Staff 2,160 1,998 2,164 8 Net assets £M 43.1 49.9 50.6 1 THE RaTIOS 2012 2013 2014 % cHaNgE Return on capital % 29.9 33.9 21.0 -38 Gross margin % 6.1 6.7 5.7 -16 Operating margin % 1.0 1.5 0.6 -61 Net margin % 1.8 2.2 1.1 -49 Sales/employee £K 334.0 385.7 434.9 13 The Infrastructure division has been involved on South West Water's Restormel GAC Plant scheme The LeADeRS 2016

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