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Joseph Gallagher Business Update 01.05.20

“...The resilience our industry has shown has been recognised by Government, Client and Management alike....”
1.5.2020
 / SEE MORE Coronavirus

Good afternoon.

As the country now passes the first peak in the battle against Covid-19, sites that have been suspended are now reopened or are making final preparations for reopening. The situation remains dynamic but seeing site access return is only part of the challenge we must collectively overcome. The new ways of working are undoubtedly less efficient than those forecast when works were priced; measuring our output against known baselines and engaging with our clients will be key to ensuring margin erosion is minimised and we can remain a profitable business.

The resilience our industry has shown has been recognised by Government, Client and Management alike. The Business Secretary, Alok Sharma, wrote to our sector to thank us for our continuation despite the challenges of today “Thank you….You are making a hugely valued and critical contribution to the resilience of our Nation and I salute you for the enormous efforts you are individually undertaking to support the UK economy.” The worry we have all shared has not prevented us from carrying on with our important work - we thank you once again.

Whilst we are pleased to welcome back some of our furloughed colleagues, the shape of the industry is changing, and we must respond quickly to those changes. It is with sadness that we have had to announce a second tranche of redundancies, but business survival must prevail and reducing our footprint, developing our cross functional skillsets and working efficiently will see us come out of this the other side with a successful business.

Our operations in the Middle East are suffering similar issues which are further exacerbated by the massive reduction in the price of oil which is the primary driver behind the economy there. We continue to remain vigilant and respond to the changing picture which is seeing project delays in Abu Dhabi and Kuwait.

Back in the UK our larger structure sites have endured throughout. Whilst this is a positive step, the emerging risk is that our new ways of working are without precedent – some activities have seen early recording predict a large % increase in the time required to complete. We simply do not have the financial resources to absorb the extra time – this will mean more tough decisions further down the line and we make no apologies for the extra checks and balances that have been introduced to protect our commercial position. Collaboration between the PM and QS will play a more important role than ever before – we expect those communication channels to be busier and for us to work together to recognise when we are veering away from our targets. Evidence, well recorded Data, Client Engagement and forming a well-constructed argument are pivotal.

This week we have seen Bank and Chelsea Embankment return with limited personnel initially. Understanding how we can keep our people safe whilst asking them to work in confined spaces is the question the tunnelling sector is seeking to answer. Our LIFE mentality will play a more important role than ever before – we cannot expose our people to unnecessary risk. We must take a considered approach to our work and understand that the risks associated with the global pandemic are still very much alive.

For those sites not yet open, we are in regular discussions with our clients to understand the likely timelines. This may vary regionally, but with the Prime Minister set to announce the release of the current lock down measures next week - we anticipate most sites currently closed will be opening in the next 2-3 weeks.

The challenge is far from over. With the economic forecasts predicting a severe downturn, we all need to think commercially about what it is we are doing. It is more important than ever to work together, share best practice and understand that we are operating on a different economic playing field to the pre Covid-19 era.

This has and continues to be a worrying time for all. During site visits this week it has been very encouraging to see the application, perseverance and enthusiasm of our exceptional people to work through the challenges that we face. We have also received many messages of thanks from our clients for the response of our people in the field and the business in general. Thank you all for the part you are playing.

We are very grateful for your perseverance, understanding and fortitude in these challenging times. Our best wishes to you all and your families as we hopefully start to see the light at the end of the pandemic tunnel,


Joseph Gallagher and Steve Harvey
Chairman and Group Managing Director