Last updated 6 July 2022
Osborne Group
Osborne Group is a building contractor which was founded in 1966 by engineer Geoffrey Osborne, who was active within the business up to his death in March 2005 aged 81. The company remains in the control of the Osborne family but in the summer of 2021 the infrastructure division was sold. The rump business turns over around £140 million a year.
Financials
In 2013, Osborne suffered from a number of affordable housing contracts that were won at “unachievable prices” and a contract dispute on a property services agreement. Turnover slipped back and the group sunk into the red but subseuqently recovered.
After falling in the previous year, revenue rebounded strongly in the year to March 2019 but profits again slumped. In September 2020, the group extended its current accounting period from 31 March 2020 to 30 September 2020.
In the 12 months to September 2021, revenue was £337.2 million (18 months to September 2020: £559.9 million) and Osborne recorded an operating loss of £38.4 million (18 months to September 2020: £19.7 million). Before tax, Osborne lost £38.1 million (18 months to September 2020: £14.7 million).
To view the financials for Osborne Group Holdings Ltd, visit Companies House and use Company ID 11056197.
Operations
The group comprises main contracting operation Geoffrey Osborne, Osborne Developments and offsite panel specialist Innovare Systemsup and has offices in Coventry, London, Reigate, and Winchester.
Osborne works across four main building sectors and turnover, although not profits, on this basis.
In the past, Osborne suffered problems working on social housing sector but this sector provided half of continuing revenue in 2021, when turnover from affordable housing maintenance was £34.5 million (18 months to September 2020: £64.1 million), while revenue from affordable housing new-build work was £33.4 million (18 months to September 2020: £40.1 million).
The group continues to win places on major social housing frameworks such as Radian’s £350 million contractor’s framework (Project ID: 20235467) and £200 million Procurement for Housing’s planned maintenance and property reinvestment framework, which began in June 2021 (Project ID: 20122647). Osborne is also on the £10 billion Retrofit Accelerator for Homes Initiative (Project ID: 20450564) and has teamed up with Passivhaus specialist Bow Tie Construction to offer zero carbon retrofit skills for the housing sector.
Education sector has been a major income driver and Osborne works for a range of schools, universities and local authorities, including Lady Margaret School in London, the University of Winchester and the London boroughs of Ealing and Hounslow and is on the national framework for refit and refurbishment solutions set up by the Red Kite Learning Trust and is on the Department of Education’s £7 billion construction framework, which runs from 2021 to 2025 (Project ID: 20282701). In 2021, turnover from education was £28.9 million (18 months to September 2020: £101.9 million).
Elsewhere, commercial turnover was £40.8 million (18 months to September 2020: £82.5 million).
Glenigan Data
After a fall in the previous year, Glenigan’s research shows that in the 12 months to Q2 2022, Osborne ‘s order book rebounded to £64.5 million (2021: £41.7 million).
Conclusion: Ready to rebuild
Osborne’s workload weakened significantly during the worst of the coronavirus pandemic and the group fell out firstly from Glenigan’s rankings of the industry’s top 50 contractors and then the Top 100. In the 12 months to Q2 2022, there was a recovery with orders rising 55%. Given that this included a period when the civil engineering business, Osborne Infrastructure, was sold off.
This sale cut the group’s links to the foundations of the business 55 years earlier and will have a significant impact going forward. In the latest accounts, revenue from rail was the biggest source of income at £120.7 million (2020: £157.4 million) followed by highways with turnover of £78.1 million (2020: £113.7 million).
The rump business is going to be significantly smaller and continuing turnover in the 12 months to September 2021 was just £139.2 million (18 months to September 2020: £334.9 million).
The sale will reduce the group’s risk profile as was working on a number of major civil engineering projects, which typically carry more risk, such as an £8.5 million preliminary works job on the £1.7 billion A303 Stonehenge Tunnel scheme (Project ID: 93148284). The risk profile is low and in the average contract won in the 12 months to Q2 2022 was valued by Glenigan at just £7.3 million.
The sale will also reduce the workforce as 327 of the 870 employees in the latest trading year were classed as infrastructure (18 months to September 2020: 966 employees). The wage bill had already shrunk to £47.8 million (18 months to September 2020: £68.9 million) and will subsequently shrink further.
The sale of the civils business and the completion of loss-making projects in London that caused the latest losses have hopefully brought to an end a turbulent period in Osborne’s history. A dramatically reduced group can now concentrate operations as its looks to build again.
Winning Work With Osborne Group
Osborne is registered with Constructionline and CHAS, uses the COINS vendor iportal software for some procurement and utilises other systems including RiskMaster. Osborne has previously used consultants Marketing Works to advise on its bid and procurement processes. As part of this arrangement, a bid analysis matric was produced and a Win-Work Process Toolkit developed. The group is accredited to BSI 18001 and a member of the Safety Schemes in Procurement Forum.
The group operates a one-team approach with an embedded procurement strategy and framework that is transparent, measurable, captures learning and innovation aimed at supporting the development of growth and opportunity not just for Osborne, but key suppliers and group customers. Osborne uses Builders Profile and prospective new contractors are asked to provide prequalification (PQQ) information.
Further information on Osborne’s supply chain requirements can be accessed here. Osborne also works with the Supply Chain Sustainability School and information on this can be found here.
Key Osborne Group procurement contacts include:
Commercial and supply chain director– Simon McCausland, tel: 01737-743500
Simon.mccausland@osborne.co.uk