CEO thinks big in building firm debut
Gordon O’Regan plans to double Clare building firm’s turnover to €120m over the next five years, writes Fearghal O’Connor
THE ramshackle office in Dublin Port, where construction company L&M Keating’s new CEO Gordon O’Regan is supposed to be, is silent and looks as if it has just been ransacked by a marauding gang. All around, trucks, shipping cranes and port equipment carrying huge containers are in constant motion between the ships berthed around Alexandra Basin and the huge warehouses and yards where Ireland’s imports and exports pile high, ready to feed the economy.
But inside the apparently empty former Doyle Shipping terminal — where O’Regan has taken up temporary residence — there is no sign of life. Electrical fittings have been ripped from the ceilings and walls, doors have been pulled from their hinges and there are piles of debris in every room. The reception desk lies empty, covered in dusty old papers.
Eventually, after a phone call, O’Regan appears, looking sharp in a slim-fitting blue suit that seems at odds with the half-wrecked building and the frenetic port scenes outside.
“We are using the upstairs,” he says apologetically, leading the way through the grim downstairs to a more normal office scene above where his colleagues quietly tap away on laptops or study huge blueprints laid out on desks.
“This building is going to be demolished in a couple of days,” explains O’Regan. “We’ll miss it because it has been a very handy place to base ourselves here.”
The Co Clare-based building company is working feverishly to meet the next deadline on a huge refurbishment job that it is carrying out for Dublin Port with its joint venture partner Roadbridge. Keating, which specialises in marine engineering, is currently completing the Berth 32/33 project in time for the arrival on April 17 of Royal Caribbean’s huge 292-metre cruise ship Brilliance Of The Seas. This will be followed later in the month by the arrival of Celebrity Eclipse, a 315-metre ship from Celebrity Cruises that will homeport at Dublin Port, the first time a major cruise line has done so.
The old Doyle Terminal in which O’Regan and his colleagues are currently ensconced stands right in the way of a new access route through the port to the new berths that are under construction.
“It is a very beneficial job for the entire local economy of Dublin. You can go into certain types of stores in the city centre and they will tell you just how important the big cruise ships that use Dublin Port are to their business,” says O’Regan.
The transformation under way at the moment on the quayside will ensure capacity for growth in this lucrative tourism sector, he says.
Of course, Keating itself has been through its own transformation since January, one that O’Regan insists is very much more about expansion rather than demolition.
In January, the company was bought by Dublin-based CBD Capital for an undisclosed amount from its founder Louis Keating, who is remaining with the company.
O’Regan was headhunted by the private equity firm to take over the helm at Keating – his first time serving as a chief executive after various increasingly senior roles at different construction companies over the last two decades.
“It’s a fantastic challenge for me and one that I was ready for. It was a good deal for everyone. CBD specialises in buying family-owned businesses in which it sees growth potential. And it allows Louis to stay involved in the hands-on type of role that he loves and is so good at.”
Keating had founded the company in Kilmihil, Co Clare, in 1987 as a general civil engineering contractor. It quickly became a marine specialist working on difficult projects such as harbour walls and dredging, alongside more standard civil engineering contracts.
O’Regan says he was not brought in to wield an axe but that he is introducing changes around corporate governance and other matters, aimed at facilitating the company’s expansion.
“Change can be difficult. There is very much a family ethos in this company and that is definitely something we want to preserve. But the plan is to move things to the next level. The people are the real asset in this company and they know that change is necessary if we are to grow. Growth will bring opportunity for themselves as much as anything, so they are very supportive.”
Right now, O’Regan and his team are working on a new five-year business plan for the company.
“We hope this plan will see us double turnover from €67m now to about €120m in five years’ time. Organic growth here in Ireland will be a part of that but a lot of that growth will be in the UK.”
He is not overly concerned by Brexit: “Like everyone else, right now we don’t really know what it will mean.” Indeed, he predicts there could be plenty of work in ports and other marine projects, a speciality for Keating.
“The Dublin Port project will certainly be a useful calling card for us in this regard,” he says.
His own experience working on major projects in the UK construction sector is a key reason why CBD offered him the role and he believes his contacts in the sector will prove useful.
O’Regan grew up in Dunmore East, Co Waterford. From an early age he was interested in building. “When I was small I spent my time building Lego and I still love building Lego with my son.”
But his ability to get on well with people has been just as important. “I spent a lot of time working in pubs behind bars in Dunmore East when I was young and you learn a huge amount in that job about people and how to get on with them.”
After his Leaving Cert, O’Regan went to Waterford IT and then Athlone IT to study engineering-related subjects. His first job was with the local authority in Waterford. This was never going to last. “I found it a frustrating place to work,” he says. “I don’t want to be insulting to the public sector but I never felt I was getting anywhere with a project and a move into the private sector also had a lot to do with my own ambition.”
Construction was booming at the time and O’Regan ended up working for one of the big players in the Irish market, BAM. The good times did not last though and, like many others in the sector around 2008, he was made redundant, an experience he describes as “very tough”.
He headed for England, where he ultimately worked with construction company VolkerFitzpatrick on a range of projects, including various elements of the London 2012 Olympics and new high-speed rail projects. When he left for England he was not sure whether it was forever but when the headhunters came knocking in recent months, asking was he interested in the top job at L&M Keating, he was ready to come home.
“Like a lot of others who had lost jobs in the crash, I could have been angry with the construction industry here how it all ended up and I could have decided not to go back.”
Indeed, he believes that one of the reasons for the growing skills shortage in the sector here is a continuing degree of bad feeling amongst people about how the last boom ended, as well as a fear that taking a job in construction again may just ultimately put them back in the same situation because of its cyclical nature. “But I love building and I see this as a great opportunity for me at the right time,” he says.
He views the UK industry as strong, despite the collapse of the huge contractor Carillion in January: “I think it says something about the fact that the PLC model may not be ideal for a company like that. It was absolutely huge, with layers and layers. How can you keep track of all the invoices, for example?”
But O’Regan believes that, in general, the industry in Britain is more robust than in Ireland and has much to teach the sector and its customers here, not least the ability to plan huge projects for the long term. He is encouraged by the Government’s recent capital plan and believes it is a step in the right direction. But he also has huge concerns around the types of construction contracts that are being used on many public projects and believes it is causing serious problems for the construction sector here.
“We are supposed to be in a boom period and yet two or three construction businesses here have gone under in recent times. How can that be? A lot of the problem is down to the type of contract that is used here and how that is putting massive pressure on companies.”
The current form of government contract used for construction projects attempts to push all the risk on to contractors and also encourages contractors to bid for tenders at as low a price as possible, he says. With costs — for example, labour — spiralling, contractors have been left facing serious losses on public sector work and, in some cases, it threatens their viability, says O’Regan.
“These contracts force people to put price before quality and that is dangerous when things go wrong,” he says. “It is not a good situation for the industry to be in and there can be no improvement until the contracts are reformed.”
Keating itself had its own difficulties with such contracts before O’Regan’s arrival when it successfully bid for a school building PPP project. “It was a big lesson for the company,” he said. By contrast, he says, the Dublin Port expansion is under a new form of contract that is far better: “It is a really good example of how public sector contracts should work. The work is highly complex and specialised but because the contractors were brought on from a very early stage, there are no surprises further down the line.”
“We are a problem-solving company, so the earlier we get involved, the better, and that has worked out very well both for us and for Dublin Port,” he says, gesturing out the window to a huge building site from an office that, within days, would be no more.