WET News

ALSO IN THIS ISSUE News: Companies re-submit PR19 business plans (P2) Onsite: Minworth STW upgrade puts people and pumps to the test (P12-13) Utility Week Live Special: The transition involved in new business models (P14-16) WET NEWS WATER AND EFFLUENT TREATMENT NEWS • Dawnus enters administration MAY 2019 Volume 25 • Issue 5 New Kier CEO leads strategic review M Group Services acquires IWJS United Utilities awards six-year maintenance contracts C onstruction company Daw- n u s h a s g o n e i n t o administration. The Swansea-based construc- tion company, which was part of Wessex Water's capital invest- ment and capital maintenance framework for AMP6, employed around 700 people across six regional offices. Dawnus Group carried out a restructuring in 2015 following losses that it blamed on its Afri- can mining operations and the company subsequently refocused its efforts on the UK, achieving its target of bringing in 80 per cent of its turnover from Govern- ment-funded entities by March 2018. However, its last published accounts, for the year ending 31 December 2017, showed an oper- ating loss of £1.23 million, while turnover had fallen 17 per cent as a result of reduced contract activity. Last year, Dawnus was given a £3.5 million commercial loan by the Welsh Government to help with cashflow but its problems proved insurmountable. Wales' economy and transport minister, Ken Skates, said: "The Welsh Government has worked closely with Dawnus, HSBC Bank and the Development Bank of Wales over many months in order to try and prevent this unfortu- nate decision by the Dawnus board. "It is understood that despite this and an approach to the com- mercial market, supported by a turnaround plan, Dawnus has been unable to secure further funding support for their weaken- ing cash position and were unable to find a potential buyer to save the company." Alistair Wardell, restructuring partner for administrator Grant Thornton, said: "The Dawnus Group has struggled with a wide variety of challenges and, despite significant efforts to turn the business around, unfortunately it has not been possible to rescue the group. "As a consequence, the future cash flows has meant that the business was not in a position to continue to operate, including completing existing work in progress. "Whilst the financial difficul- ties of the group were not a con- sequence of Brexit, there is no doubt that Brexit uncertainty impacted the ability to rescue the K ier has announced that n e w c h i e f e x e c u t i v e Andrew Davies will lead a strategic review of the group as it seeks to get back into the black. Davies began work on 15 April ašer being named as the replace- ment for Haydn Mursell, who leš the company in January. Kier said in a statement that Davies' strategic review will consider ways of further simplify- ing the company to "create a more focused group, the alloca- tion of capital resources across the group and additional steps to improve cash generation and reduce leverage". The work will build on the efforts of the board in recent months as well as the 'Future Proofing Kier' streamlining and efficiency programme. The conclusions of the review will be announced in July. Kier Group purchased May Gurney in 2013, Mouchel in 2015 and McNicholas in 2017 and, while the acquisitions have brought significant growth in revenue, debts reached more than £400 million last year. The firm completed a £250 million rights issue in December, which brought the net debt posi- tion at the end of 2018 down to £180.5 million. U n i t e d U t i l i t i e s h a s announced that it has awarded seven long-term contracts for maintenance work, moving away from its previous reliance on a single supplier. The six-year contracts, which began last month, have been awarded for maintenance on the company's water and wastewater network, which has been carried out for the past nine years by Amey Utility Services. Morrison Utility Services will be responsible for the north region water network, Sapphire Utility Solutions will look ašer the north region wastewater network, T&K Gallagher becomes south region water network partner and Amey is handling the south region wastewater network. T h e c o m p a n y h a s a l s o appointed Amey, King Construc- tion, MUS and T&K Gallagher as partners on small water projects; Amey, Bethell Group, Sapphire and T&K Gallagher as small wastewater project partners; Amey, O'Connor Utilities and T&K Gallagher as specialist water services partners; and Bethell Group, Sapphire and T&K Gal- lagher as specialist wastewater services partners. Kevin Fowlie, United Utilities' network delivery director, said: "Our new network maintenance services partners will help us improve customer experience, achieve the highest standards of health and safety and provide an end-to-end view of all the main- tenance activities in progress. "Working with multiple sup- pliers gives us greater flexibility and this new structure will also provide us with the opportunity to work more effectively together and collectively raise the bar on s t a n d a r d s a n d c u s t o m e r experience. "These contracts have been won by companies with the North West as their heartland and with skilled workforces, working alongside our own teams, sup- porting the economic wellbeing of our region and delivering best value for our customers." Colin Kelly, Sapphire Utility Solutions' managing director, said the company had worked with United Utilities for a number of years as a tier 2 supplier but these were the first major contracts in which it will be working directly with the water company. "This success is a reflection of the investments we have made in the latest technologies and in a workforce that is passionate about delivering outstanding service," Kelly said. "We are looking forward to working in collaboration with UU to provide a first-time resolu- tion to customers, to the highest standards of quality and health and safety." M orrison Utility Services' p a r e n t c o m p a ny, M G ro u p S e r v i ce s, h a s announced the acquisition of Industrial Water Jetting Systems (IWJS). IWJS is one of the leading providers of wastewater network services to the water, transport and environmental sectors, with annual revenues in excess of £30 million. Its service offering includes sewer and drainage maintenance and rehabilitation, lining and patch repair, jetting and cleans- ing, and CCTV investigation. As M Group Services' sixth acquisition in just over two years, IWJS will retain its brand identity and will continue to operate as a standalone specialist services business within M Group Ser- vices, forming part of the group's utilities division. M Group Services chief execu- tive Jim Arnold said: "This is a significant acquisition that fur- ther enhances the scope of com- plementary, specialist essential infrastructure services that our group delivers to utilities and other infrastructure clients in the UK and Ireland." IWJS, meanwhile, has since completed the acquisition of the drainage division of Tomato Plant Company (TPC). "As an engineer and an eternal optimist, I interpret AI as an exciting opportunity both personally and professionally, not a reason to unplug HAL- 9000" Stantec's Dan Causley on boosting productivity in the water sector, P10-11 "Ultimately, we know it's the small ideas that can sometimes make the biggest difference" Gerry Mulholland on Amey's campaigns to bring about safer streetworks, P8 • Welsh construction company collapses after failing to overcome a 'wide variety of challenges' business. Our priority is to work with manage- ment to ensure that any impact on customers, employees and creditors, including subcontrac- tors, is minimised." Around 450 Welsh suppliers were affected, with the total value due to the Welsh supply chain in the region of £6 million. One Caerphilly-based firm said it had lost £30,000. HEALTH, SAFETY AND WELLBEING How innovative approaches to workers' wellbeing have brought far-reaching benefits to Lanes Group (P4-6) "Whilst the financial difficulties of the group were not a consequence of Brexit, there is no doubt that Brexit uncertainty impacted the ability to rescue the business" Alistair Wardell, Grant Thornton UK LLP David McLoughlin, Amey Utilities' managing director, said: "We have been a trusted supplier for United Utilities in network maintenance for nearly a decade. Our success in continuing this partnership allows us to safely deliver United Utilities' vision, putting customers at the heart of everything we do by maximis- ing the value of our engineering and operational expertise." Skates said: "We will do all we can to support all companies and workers affected by this news." C a t G r i f f i t h s -W i l l i a m s , national executive officer at Spe- cialist Engineering Contractors' Group Wales, expressed concern over the impact of the firm's demise. "Nearly all the work carried out by Dawnus was outsourced to SMEs, which will now bear the brunt of the losses from the insol- vency," she said. "Again this highlights the financial fragility of the large construction firms and the consequent risks to their sub-contractors which could now lose millions of pounds. "The impact on the Welsh economy could be very damaging. T h e re i s a l s o a h u m a n co s t involved. I'm very concerned for the people in Wales who worked for Dawnus and its sub-contrac- tors whose jobs will now be at stake." At t h e p o i n t i t we n t i n to administration, Dawnus – which also carried out work for Welsh Water – had held a number of live public sector contracts in Wales, including schools, flood defence schemes and infrastruc- ture projects. Sapphire Utility Solutions is among the companies to have secured a contract

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