NEWS In brief
SMART METER CONSULTATION A second government consultation on smart metering is now under way with industry comments invited by the closing date of 8 October. The first consultation looked at ‘functional interoperability’ and this second stage aims to identify fully interoperable technologies including the proposal for a home area network. It will also consider the development and regulatory timetable the government plans to follow.
www.decc.gov.uk
NEW CIBSE DIVERSITY PANEL CIBSE is setting up a diversity panel in a bid to advise and support the institution, and recognise groups that may be under-represented. Meetings will be held three or four times a year in London, with the possibility of teleconferencing from other parts of the world. If you would like to be considered please go to www.
cibse.org/diversity Closing date is 10 September.
ENERGY PRODUCTS WEBINAR The first CIBSE Journal webinar, sponsored by Grundfos, is to be held on 20 September at 1pm on energy-related products (ErPs and EuPs), to bring people up to speed on the legislative changes brought about by the EU Directive. The webinar will cover Ecodesign legislation and how you can meet the requirements. Register for this free event via http://tinyurl. com/c67u5vu
F-GAS REGULATIONS WORK 100% of firms on its register are complying with the European F-Gas regulation, according to Refcom, the F-Gas certification body. It made the claim following its random inspection of member firms during the quarterly audit, which is a legal requirement as part of Refcom’s operating agreement. Most of the 50 firms audited were fully compliant and the few who weren’t became compliant after guidance. However, some firms were removed from the register.
8 CIBSE Journal September 2012
Many contractors now in financial distress
Recovery. He said it was ‘very risky’ to keep cutting margins to win short-term work.
Falling workloads, tighter margins and rising costs have left small and medium-sized construction contractors in an extremely vulnerable financial position, according to new research.
Accountancy group Baker Tilly said one in six contractors would not be able to pay off their immediate debts if required to do so by creditors, and most are dependent on the support of their banks. It added that profits are ‘falling fast among contractors turning over £2m-£25m’, and that one in 39 of these firms are ‘likely to fall into financial distress over the next 12 months’.
Around 25% of construction contractors saw pre-tax profits drop sharply during 2011, with 41% recording a fall of between 10 and 20%. A similar proportion of sub-contractors
‘ One in six contractors would not be able to pay off their immediate debts if required to do so’
saw profitability collapse by more than 50%, and 38% saw a fall of between 10 and 20%. However, sales were not as badly hit, with just over a quarter of firms reporting sales declines of at least 10% last year compared to around 40% of firms the year before. ‘The fact that profits are falling at a faster rate than sales suggests that companies are being hit hard by a double whammy of rising costs and falling margins, as they face an ever more desperate fight for sales,’ said Mark Wilson, partner at Baker Tilly Restructuring and
The Building & Engineering Services Association (B&ES) also reported a drop in workload for one in three contractors during the first six months of 2012. Its ‘state of trade’ survey showed that the North East of England, Yorkshire and Scotland were the worst hit regions with residential heating and ductwork the market sectors under greatest pressure. Half of the respondents said that tender prices were lower than six months ago, but the cost of materials had risen. As a result, direct employment has fallen across the sector and 61% said they had not taken on an apprentice or trainee in the past year. However, most did say they expected employment levels to rise again during the second six months of 2012.
B&ES members said the biggest negative impact on their businesses came from ‘late payment, tight margins and insolvency further up the contractual chain’, although they see rising demand for renewable technologies as grounds for optimism and investment in skills. *The latest casualty of the tough
trading conditions was Leeds- based building services contractor Airedale Mechanical and Electrical with the loss of 135 jobs. The collapse of the £66m turnover business follows the demise of MJN Colston earlier this year.
CIBSE conference tackles key topics
Clients, architects and engineers will join representatives of the government and academia to share the latest thinking, best practice, expert opinions and industry developments at the CIBSE Conference in London next month.
The economic downturn will provide the backdrop to sessions covering business challenges, case studies and debates featuring top industry names such as CIBSE president David Fisk; chief construction adviser Paul Morrell; Robin Nicholson, senior partner at Edward Cullinan Architects and British Land’s Sarah Cary.
Case studies will be provided by: Max Fordham LLP on soft landings; Atelier Ten and Buro Happold on overseas business challenges; Arup Scotland on passive retrofit projects; and Hoare Lea will bring delegates up to speed on building performance evaluation.
Around 300 companies are also expected to participate in the accompanying exhibition at London’s Olympia on 10 and 11 October.
For more information and booking details go to
www.buildingservicesevent.com
www.cibsejournal.com
Shutterstock /Kazhdan
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