Costain’s CEO says prime contractors have a responsibility to support smaller companies to stop them from going out of business.
& Architecture News After the group announced its half-year results for the half year ended June 30, 2022, Alex Vaughan said he was concerned that small suppliers were performance in the current economic environment.
A combination of factors including Brexit, the COVID-19 pandemic and rising material costs have weighed on businesses in recent months.
Rated by Creditsafe as the highest number since March, based exclusively on CN. About 115 companies closed in the first six months of this year. Earlier this month, the directors of the sister specialists blamed a lack of support from the main contractor for their collapse.
Vaughan told CN that it is important that tier 1 suppliers support small businesses with a shared set of values during these difficult times.
“I’m obviously concerned about struggling suppliers in the industry,” Vaughan said. “We get tremendous value from our small suppliers – so we support them and they build relationships with us, it’s a personal responsibility.
“When we choose a supplier, we obviously It is very clear who else they are working for them if they are working in our department. All the other tiers behave the same way, so we are all jointly responsible, which gives us confidence that the people who work for us and our colleagues will be taken care of,” he added.
In 2022 Between Jan. 1, 2022 and June 30, 2022, the company reported that it paid 85% of its invoices within 30 days. This was a 76% increase from the same period last year, something Vaughan is keen to highlight.
“We also have a supply chain academy, so we actually train and help supply chains do better and become stronger companies. We use our relationships with auditors and others to provide guidance and help the supply chain,” he said.
Costain launched the Supply Chain Academy in October to support and develop SMEs. It has Helps align the company’s supply chain partners with the same training and development standards used by the group itself.
In its interim results for the period, Costain reported an increase in its pre-tax profit to £11.2 million , compared with £9.1 million in the first half of 2021. Its revenue also rose by almost a fifth to £665.2 million from £556.8 million a year earlier.
It said its profit was affected by Protection by an inflation protection mechanism written into the contract. Vaughan told CN that the mechanism is designed to protect the company from “pervasive inflation rates,” which are leading to higher prices for materials such as steel and concrete.
But he stressed that the company did not profit from the inflation mechanism and said customers would not “just pack all the labels” and it hoped that when possible buy alternative materials that are less susceptible to price fluctuations.