Firm builds on its success

Nov 16 2007 by Graeme King, The Journal

CONSTRUCTION company Kendall Cross is aiming to dine at the “top table” of the industry after being taken over in a £9.3m deal by FTSE 250 company Galliford Try.

The Ponteland-based business, which celebrated its 50th anniversary this year, will remain as an independent unit and aims to compete for bigger contracts than it could previously seek.

New owners Galliford Try are aiming to take sales from £35m to as high as £50m inside three years.

All the existing management team will remain in place, with chairman Neil Ramsey and managing director Ian Graham at the helm – though they will now report to Galliford Fry building division boss Andy Sturgess in Uxbridge.

Kendall Cross, with 125 staff in the North-East, will become part of a business boasting more than 2,000 staff and £1.8bn sales. The Northumberland company has become best known for affordable housing but has expertise in a number of different disciplines.

The company has worked on a variety of different projects in the North-East recently, including the Ouseburn Farm in Byker, a £1m refurbishment of Monkwearmouth Station in Sunderland and new student accommodation at Stepney Lane in Newcastle.

Neil Ramsey, chairman of Kendall Cross, said: “The offer from Galliford Try was a superb opportunity to expand the company that we could not ignore.

“It’s no secret that medium sized regional contractors such as ourselves are under great pressure by being unable to compete for the larger contracts, whilst being pressed by smaller companies with lower overheads.

“In the past few years we’ve seen many good companies go to the wall for these reasons and, as a board, we were determined that this would not happen to Kendal Cross.”

Andy Sturgess, managing director of Galliford Try’s building division, said: “Kendall Cross gives us a geographic focus in the North-East, and we are excited by the affordable housing and regeneration work it does.

“The existing management team will stay, which is important to us. The Kendall Cross name will stay for the foreseeable future.”

Mr Sturgess said he expected the business to expand substantially and no longer be restricted to a tier of the construction industry below the biggest projects. He said: “We expect that within two to three years, Kendall Cross will be a £50m to £60m business. We don’t want it to stand still – we want it to grow.

“The existing management are very, very capable and there is great potential for that team to grow their business with our financial support behind them.

“We don’t want to be a tier down – we see ourselves being at the top table.”

Greg Fitzgerald, chief executive of Galliford Try plc, said: “The acquisition of Kendall Cross provides a springboard on which we plan to grow our affordable housing and regeneration business in the North-East of England, an area in which we see considerable potential.”

Financial advisers Baker Tilly worked with Kendall Cross on the sale to Gallifiord Try, while Robert Philips and Nicola Loose of Muckle LLP provided legal advice.