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Fully Integrated -Contractor Profile

Before he could develop his business, Bryan Glastonbury had to work out exactly what kind of company it was. Paul Braithwaite reports.
IT took Bryan Glastonbury a couple of years to put Integral on the right path - and turn several diverse firms into a profitable business.

Glastonbury confesses he is not happy with the PR side of the business but 'my fellow directors insist I must meet the press and front corporate videos'.

Not that it showed but perhaps that is because he likes the work that he does.
The business took him two years to turn around because of long-term contracts which he was unable to ditch without compensation. The transformation was not without pain.
'We had to work through all the long term contracts. I shut offices which were under-performing and I closed the Calne, Wiltshire, head office.'

Now Integral has no head office as such. The accounts staff are located in the Bristol office with the finance director. Manchester has the IT department, and HR and payroll are in Newcastle.
'All the service departments are attached to operating units so that they understand how the business works. It works better that way.'
Integral has come a long way from its shaky start as part of Staveley Industries.

The company bought five different maintenance companies and merged them into MJN Maintenance.
Instead of the vast profits expected, the business flopped.
Glastonbury was Staveley's unofficial company doctor. He was drafted in to make the business work. In 1999, he took charge. It turned over £70M and it lost £7M.
Glastonbury admits: 'I was a contractor, the last thing I wanted to do was run a maintenance
company'.

The idea was that Glastonbury would run the Integral business until it had turned around and then it would go back under the MJN Colston banner. It did not happen quite like that.
Staveley decided Integral was non-core business so Glastonbury, realising its potential, decided to make an offer. The MBO took place in July 2005.

He, Mark Johns (operations director), Paul Salmons (financial director) and non-executive director and ex-PWC partner Tony Kenny were backed by Barclays Ventures and Lloyds TSB.

Glastonbury adds that he has now bought out the venture capitalists and is funded by Lloyds TSB in the conventional manner.
What is Integral's business? This was one of the problems which Glastonbury had to sort out - and quickly.

'Staff were confused. Staveley had announced they were to be part of this huge facilities management company but we did not do facilities management,' he says.
'I see facilities management as about dealing with the estates, leasing and the whole gambit of security, cleaning, m&e, catering and the white collar management of the same.'

He adds this is what companies like Capita, Serco and Atkins do.
But Staveley had bought blue-collar companies, the people who got their hands dirty fixing machinery or changing the light bulbs.
Glastonbury spent the first six months of his tenure, living out of a suitcase, visiting the different parts of the business - and listening.

'I realised very quickly Integral was not an FM company and was never going to be one.'
His solution was for Integral to stay as a blue-collar business. And once Glastonbury had explained this, everyone knew what he or she was doing. The results are obvious.

Following the refinancing in April 2006, the company has £14M of net assets. Turnover was £131M which was a 10% increase on the 2005 figure. Trading profit was £5.5M, or 4.1%.
In 2009 the turnover target will be £200M. It is all part of Glastonbury's rolling three year plan.
'It sets targets for everyone.'

He adds he brought a transparency to the accounts.
'I gave the regions separate P&L systems.' Further, each division, such as mobile maintenance, was broken down so that each has a P&L account within its region.

Previously, the businesses had been lumped together.
'They did not know which area was making money and which was not. Now we know very quickly whether or not we are making money and, if not, we can do something about it.'

He surprised some of his managers who 'were working so hard they went home shell-shocked when told their projects were losing money'.
That was, he says, the difference between his price-driven contracting background and maintenance which was 'a softer, negotiated
settlement'. That has now changed, both in Integral and the industry.
'Increasingly, maintenance companies deal with a managing agent and it is his job to drive as hard a bargain as possible.

Integral has grown organically and by acquisition. In the last five years he has made three or four acquisitions but they were just bolt-ons.

There is at least one engineer in each of the postcodes across the country which adds up to more than 1,000 mobile units.
He adds proudly that Integral is the largest independently-owned maintenance company in the UK.
It has more than 2,400 directly employed staff in 15 branches.

'We try to do all we can by direct labour. I do not like to use sub-contractors. They work to their own agendas.'
It is, he says, what sets Integral apart from his competitors.
Glastonbury adds that he likes employing that many people. 'It gives me a buzz.'

He says he is not particularly interested in money.
'Once you have enough, there is no reason to accumulate more.'
But he loves working, hence the need to build the business.
And how!

Glastonbury says the business was about: m&e, mobile maintenance and resident sites.
Now the list is seemingly endless.
The additions are:
· Fabric installation and maintenance
· PFI portfolio
· Special projects (of which m&e
contracting - with sales of
around £25million - is a part)
· Housing services
· Communications (data cabling)
· Cleaning
· Shopfitting
· Fire alarms
· Catering maintenance
· BMS controls
· National call centre
· Fixed electrical wire PAT testing
· And a recruitment company.

Why a recruitment company?
'I recruit a lot of staff and I was fed up with paying the fees,' he says simply. He bought Facilities Associates in the Midlands which did a lot of work for Integral and, where it can, it deals with most of the recruitment for the company as well as other organisations.

Not a bad idea when he expects to employ some 3,000 staff by 2009. Glastonbury explains his rationale. Take fabric installation and maintenance for instance.
'We started by employing handymen, carpenters, painters and decorators. Now the business has taken off and is a big part of our firm. It works because often firms employ both a maintenance company and a builder. And sometimes the work of one has to stop to wait for the other. This way we can make sure it is co-ordinated.'

So what is the next box on Glastonbury's list?
He is quite open. Door maintenance, card access systems and CCTV, he says candidly. 'We maintain thousands of banks which have automatic doors and these are always causing problems.'
He adds there are no national companies which do this work effectively so he can either train the engineers or acquire the expertise.'

He cites cleaning as an example. The company took on three managers to run the work but when it became a £1million business it had trouble fulfilling a couple of contracts so Integral bought a cleaning company and 'now it is a £5million business'.

Much of the new business comes from existing clients.
For instance, the shopfitting business came about because of the fabric work the company was taking on. Companies were happy with that so they asked if Integral had a shopfitting company. So he started one.

'With much of our work for banks and retail, it was necessary to have people who would work at weekends and in the evenings which was different from the usual 8-5pm fabric work.'
As business perked up he bought a shopfitting company and the two are now called Integral Interiors.

But as the whole business grows, it must be harder to maintain the quality?

'Direct employment is a big plus in maintaining quality. We are able to prioritise the engineer and give him enough time to do the job and not skimp on the work.'

And by doing the maintenance work correctly, the reactive calls drop. With fewer reactive calls, planning the business becomes easier.
'We want the majority of our work to be planned calls as it is more cost-effective. 'Of course reactive calls do not stop completely but the larger number of engineers that we employ throughout the UK, the nearer an engineer is to a call-out'.

Retention rates are more than 80% which is high by any standards. And, he adds, some of the lost work went to PFI contracts for which the company didn't tender.

Further, Glastonbury insists the company needs to keep those retention rates high if it is to reach its £200million turnover target.
With Glastonbury as the driving force, hard targets are meant to be broken - and how!

1 September 2007

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