French firm set to pump cash into its UK business

FRENCH ENGINEERING firm Colas has pumped fresh cash into its UK business and is ready to spend billions on takeovers in a push to gain market share in a sector still reeling from the collapse of Carillion.

Its renewed focus on Britain follows an 18-month review which Carl Fergusson, an executive director at the firm, said identified new opportunities in the UK and prompted the creation of a new business unit – Colas UK Projects – in January.

While he would not divulge the size of the investment from the French parent company, Mr Fergusson said the focus would be on bidding for infrastructure projects rather than less lucrative maintenance contracts, but that its growth targets will rely on a raft of takeovers in the UK.

“The pace of change that we have decided that we want to achieve can’t be achieved just by organic growth. So it will require acquisitions,” he told the Press Association.

When asked how much Colas is willing spend on UK deals, Mr Fergusson highlighted recent acquisitions in Canada, where the company recently clinched a 913-million-Canadian-dollar deal (£517m) to buy road construction and bitumen distributor Miller Asphalt Group.

“You will find that we’re not talking about millions, we’re talking about billions,” he said.

Colas’s cash is also likely to go further in the UK, given the strength of the euro versus the pound.

Mr Fergusson stressed that Colas’s UK investments were not prompted by Carillion’s failings, but admitted the collapse “presented some opportunities” – with hundreds of millions of pounds worth of unfinished public contracts having been left in its wake. He stopped short of confirming whether Colas had put forward bids for those tenders.

“We have looked at certain opportunities that have flowed out of the Carillion collapse but we are bound by confidentiality agreements that we’ve signed with receivers,” he said.

When asked whether Colas might fall into the trap of bidding for a raft of low-price contracts like those said to have exacerbated Carillion’s problems, Mr Fergusson insisted his company was focused on value over volume.

Colas recently scored a UK Government-backed project to build a new international airport in Uganda, funded though a UK Export Finance Loan.

Clockwise from top, at the RHS Garden Harlow Carr Flower Show in Harrogate yesterday, Sophie Councell from Whixley in one of the floral picture frames; a spot of lunch; Jonathan Moseley (left) and his team of florists decorating the British Flower Bus;...