Prison builders look to health and schools to beat recession

Feb 27 2009 by Chris Knox, The Journal

A BUILDING firm that specialises in prison developments is confident of surviving the recession intact, despite expecting its turnover to halve to £10m this year.

Teesside-based Henderson Campbell says it has seen Government spending on new prisons slow down as it concentrates more on other areas, such as social housing.

This has led to the firm, which is based in Guisborough to look at additional markets such as education and healthcare in order to stave off further losses.

The firm, which was formed in 1975 and has a directly employed workforce which fluctuates between 100 and 150, now believes its sales will be dramatically reduced this year and said that it may have to look at a number of cost cutting measures, including redundancies, if some of the schemes it is currently bidding for fail to come off.

However, newly-appointed business development director Neil Armstrong said that he is in advanced talks in regards to 25 construction projects in the North, out of the 380 enquiries he has made since joining the company three months ago.

“It’s fair to say that our turnover will be half of what it was last year”, Mr Armstrong said. “But, this is to be expected as Government spending on custodial projects has slowed down as it concentrates its resources on helping to stabilise other areas of the economy.

“However, we have already had some good feedback from some of the education and healthcare developers that we are tendering with and are confident about our ability to expand into new markets.”

According to the construction leads service Glenigans, to which Henderson Campbell subscribes for new tender opportunities, 17 new projects across the building and civil engineering sector came to the North East market last week alone – at a combine value of £30m.

Mr Armstrong is now hoping to tap into these leads and move into a number of new areas, including school extensions, nursing home expansions, wind farm sites and the rapidly increasing area of budget supermarkets.

The firm does have some experience of projects outside of the prison sector, but decided to concentrate on this line of work around five years ago when it teamed up with Caledonian Building Systems, of Newark, Nottinghamshire, to install pre-engineered cells to help cope with prison overcrowding.

Mr Armstrong said: “Many construction skills are transferable between projects, which means that, although our main focus in the past couple of years has been in the prison and custodial sector, we are equally capable of turning our hand to other projects.