North West expansion plans for STG
A YORKSHIRE building contractor is on the lookout for acquisitions in the North West as it plans significant expansion in the region.
Strategic Team Group is on target to increase turnover 13% to £39m by the end of March 2010, with profits of more than £2m.
Around £3m of group turnover is generated out of the Stockport-based North West office at present, with the majority coming from transport contracts.
Although the firm is firmly established in the transport sector in this region, it wants to make more of its core strengths in housing.
The company is planning for 60% of any organic growth in turnover to come from the North West alone next year.
Despite this, it has ambitious plans to grow its North West presence more quickly and is actively looking for acquisitions of around the £10m mark, in the social housing and maintenance sectors across the region.
The Manchester office of Barclays Ventures bought 46% stake in March 2008 to help the company invest in expansion through acquisition.
Charles Tweed, business development director, said: “I imagine we’ll be looking for another equity partner in the next two to three years. Before then we want to rebalance the business and become a buildings services and solutions supplier, not just a house builder.
“Maintenance is probably 18/20% of the business at the moment but we want a third build, a third maintenance and a third refurbishment, so we are effectively looking after the whole lifecycle.”
The company also has its eye on strategic acquisitions in Scotland, Yorkshire and the North East.
Mr Tweed added: “We’ll become a £60m turnover business with these acquisitions; our aim is to have a £70 to £80m turnover target in the next two years, while maintaining profit margins.
“But even without any acquisitions we’d be looking at a £45m turnover next year [2010/11] just with organic growth.”
STG has also recently won a £300,000 contract to build around 20 cycle stations at points along MerseyRail stops, encouraging people to cycle to the station, by being able to leave their bikes in a secure place.
Castleford-based STG employs around 200 staff, with six based in the Stockport office.
