Liam Cummins joined the cladding specialist in 2023 after years working for main contractors. He talks to Dave Rogers about unsustainable margins, working for some formidable CEOs and why London is still the place to do business
Liam Cummins’ last three bosses read like a roll-call of chief executives in the contracting industry.
There was John Gains, knighted in 2003, who was in charge of Mowlem for nine years before leaving at the end of 2004. Cummins had already departed – for Laing O’Rourke – by the time Mowlem, then listed on the Stock Exchange, was bought for £290m by Carillion in 2006. Imagine that now.
Cummins was at Mowlem for six years, then stayed with Ray O’Rourke for 17 years, initially as boss of Crown House and later at its building arm working on schemes such as the Cheesegrater and the Ascot racecourse redevelopment.
He joined Kier in early 2020 to head up its construction business, having been recruited by Andrew Davies a few months into a turnaround at the business. At Kier’s most recent set of results earlier this month, Davies was confident enough to say the turnaround had been completed.
Cummins was at Kier for nearly three years before the chance to become a chief executive in his own right came along, this time heading up the cladding specialist Permasteelisa, the Italian facades company which celebrated its half-century in business last year. He started at the beginning of last year.
“I had three very different, very strong leaders,” Cummins, who turns 54 this week, says of Gains, O’Rourke and Davies. “I hope the CEOs of those businesses would say I made a difference.”
Permasteelisa: a potted history
Married with three boys – aged 20, 18 and 14 – Liam Cummins became chief executive of Permasteelisa at the start of last year.
The business, whose brands also include Gartner and Scheldebouw, has 2,900 employees and four geographic areas: Europe, the US, Midde East and Asia Pacific. It has 23 office locations and four manufacturing facilities – in Canda, Italy, Germany and the Netherlands.
The firm was founded in 1973 just outside Venice in Italy, expanding its operations to south-east Asia in the early 1980s and then buying Dutch firm Scheldebouw in 1995 and German company Gartner six years later.
Permasteelisa itself was bought by Japanese firm Lixil in 2011 for €573m (£483m). Lixil tried to sell the business six years later at a loss to Shenzhen-based Grandland for €467m (£393m) but the committee on foreign investment in the US, an interagency body led by the Treasury department, did not approve and blocked the deal. The reason was believed to be worries about a business which had carried out work on US embassies around the world being owned by a Chinese firm.
In 2020, US private equity firm Atlas Holdings bought it for an undisclosed sum.
In its last set of results for the year to March, Permasteelisa posted a turnover of €790m (£665m) and adjusted earnings of €27m (£23m). It said net equity was €101m (£85m) and it had an order book of €1.1bn (£926m).
Of his move to the top rung, he adds: “I felt I was ready to transition into a chief executive role. It’s different to having a division. You have less of an impact as an expert practitioner but you have a massive impact on picking the right people and starting to build teams.”
He left school at 16 and began work at Gleeds as a trainee QS, starting a degree in it two years later. “They said, ‘would you like to go to university and we’ll sponsor you’. I was their first ever sponsored student.”
He completed his course at Kingston, then stayed at Gleeds a bit longer before he went off to Serco as a project manager. “Private practice was a bit suffocating. I liked the operational side of life. [Serco] were looking for project managers and I had five years with them,” he adds.
Cummins credits his QS and contracting background for landing him the job at Permasteelisa, a company with 2,900 employees, 23 locations around the world and a turnover of €790m (£665m). “It’s been good to get exposure to these different environments.”
Since 2020, Permasteelisa has been owned by a US private equity firm called Atlas Holdings, which is based in Connecticut but has an office at St James’s Square in London’s Mayfair.
There was a big cultural difference between Mowlem and Laing O’Rourke. The pace at O’Rourke was faster
“It might be different culturally, but it’s the same set of drivers,” Cummins says of being owned by private equity. “[Atlas] like construction – this is very much a core kind of business for what they want.”
He adds: “There was a big cultural difference between Mowlem and Laing O’Rourke. The pace at O’Rourke was faster. Everybody was focused on operations, not servicing some of the things you have in a listed environment.”
Since arriving at Permasteelisa 20 months ago, Cummins has set about focusing on certain markets and pulling out of others. He says the US, where it has traditionally concentrated on east coast cities such as New York and Boston and those on the west like San Francisco, has suffered from a fall in numbers of people returning to the office after the pandemic.
But, while it is seeing less demand for new offices in its traditional markets, the company has seen an uptick in sectors such as hospitals, universities and stadia and in new places like Texas and Florida.
The firm has pulled out of China, with Cummins admitting that it was “very difficult to compete with local companies”. The firm has also trimmed the amount of work it does in Australia.
The Middle East has, he says, an appetite for “new and complex” projects. But Cummins adds: “I lived in the Middle East [Dubai, when he headed Laing O’Rourke’s business out there] and you have to pay a lot of attention to cashflow.”
I want the business to do great things in London – it is a super opportunity for us and I want the business to be operationally strong here
In other words, if the firm has any doubts about being paid, it won’t be doing the job.
There is however one place that Cummins is especially keen on. “London is our biggest single market. We have increased our capacity in London.
“I want the business to do great things in London – it is a super opportunity for us and I want the business to be operationally strong here.”
A look at the list of projects it has worked on in the capital in the past few decades reads like a who’s who of schemes. Name a job in London and there is a good chance Permasteelisa has worked on it: Wembley stadium, the Shard – incidentally, Cummins’ favourite building in London – Heron tower, Spurs stadium, the National Gallery.
To give an idea of how important London is to Permasteelisa, Cummins says that 70% of its European business is in the city. The firm typically has around 75 schemes going on at any one time across the globe and, right now, 23 of these are in London.
“The biggest single cluster of projects in the world is in London,” Cummins adds. “We need to be inside the ecosystem of London.
“Getting London performing well is very important to me. It’s fundamental we have a strong capability here.”
Permasteelisa has around 100 staff in the capital, mainly based in Cannon Street in the City. Cummins says the city remains ahead of most of its peers because of the “level of investment, the appetite to build and the visibility of pipeline.
“London is seen [by investors] as a good long-term option. We see a lot of opportunities.”
When he was living overseas while at O’Rourke – he spent a decade in Dubai and Perth in Australia – Cummins says London remained his favourite city. “The quality of life in Perth was great,” he says, “but from an all-round business vibrancy, I always missed London when I was away.
“It has an energy, a pace and diversity. There is a lot going on.”
One thing that concerns him is the question of who will build all these schemes planned for the capital. “There’s going to be more work than capacity,” he says.
The list of tier 1 contractors able – or more pertinently willing – to do the kind of high-risk jobs for the same old margins is getting smaller.
“Something will have to change in the [contracting] model and risk appetite,” Cummins says. I’ve had conversations with investors questioning what the next model is for the next wave of work.
The sector is stressed and margins are unsustainable at 2% to 3%. Everybody knows that. And it’s not just margins – we’ve seen so many insolvencies in the sector
“How do we get the best out of the sector? To do that, there will have to be a shift because there will be more work than capacity and therefore there will have to be a conversation about what the delivery model will look like.”
Cummins is speaking just after one of his old firms, Laing O’Rourke, released its latest annual report. A turnover of £4.3bn and a pre-tax profit of £18m, means its margin is next to nothing. A few days later, the collapse of ISG strengthens the point as the pool of contractors gets even smaller.
“It has to change,” Cummins says. “The sector is stressed and margins are unsustainable at 2% to 3%. Everybody knows that. And it’s not just margins – we’ve seen so many insolvencies in the sector.”
He says the current contracting model simply acts as an accelerant in a race to the bottom. “When I look at the most successful projects I’ve been involved with, there is a clarity in what everyone needs to get done. There’s a transparency in how you’re working and proper collaboration.”
Bringing specialists in earlier would be one way to help, he says, while the industry is “still screaming for transformation on productivity”. He thinks some firms are trying with new technology, but adds: “I wonder if some firms have invested money but the delivery model has suffocated their ability to leverage that.
“Clients need to be prepared to challenge the traditional model. It’s a pivotal time for leaders in government and industry to stand back and look at this now. We’re in a window of being able to impact this.”
More clients are asking to see the strength of firms’ balance sheets. “That’s a big focus,” he says.
“One of the first questions we’re asked, as well as about capability, is, ‘let’s understand the strength of your balance sheet’.
“We have no debt. In a stressed market, that becomes a big differentiator. Clients want to look inside the engine room and be confident in the strength of your balance sheet.”
And he says it is wrong to describe contractors as risk averse. “Risk averse is being incredibly sensible about the long-term business. I know what I’m looking for from a partner and what they’re looking from us: it’s a sensible alignment on risk.”
From Nottingham, with love
While Permasteelisa chief executive Liam Cummins is keen to keep the conversation to business, there is one area that he is prepared to go off-topic on: Nottingham Forest.
He was born in Nottingham and, when it is mischievously put to him that he must be a Notts County fan, then, he looks appalled. “Certainly not.”
Like all Forest fans, he winces if the team is referred to as Notts Forest.
He remembers defender Frank Clark, whose last competitive game was winning the European Cup for his team in 1979, coming into his local primary school in 1980 with a replica of the trophy. “I’ve got a photo in my house of me holding it,” Cummins says.
His favourite Forest player of all time is Scottish left-winger John Robertson, whom manager Brian Clough referred to as a “little fat guy” ahead of the 1980 European Cup final. They won it and Robertson scored the only goal.
“When I was living in Dubai and Australia, I’d be backwards and forwards a lot. I always used to come back and watch Forest.”
A few more questions on Forest and he Cummins is wondering whether the interview will be taken over by Forest, so it’s back to buildings, then.
His favourite job that he worked on was the Ascot racecourse development, when he was at Laing O’Rourke. At the time it was signed in 2004, Wembley stadium was in the headlines for running late and missing deadlines. It is fair to say a few thought that Ascot – another sports scheme with a hard deadline – would go the same way.
“It was a big call by Laing O’Rourke and the client to go for [a hard deadline],” Cummins admits. “Ascot was a big, complex project.
“We worked as a real team to get it done. Hard – but very rewarding.”
The racecourse was reopened, on time, by the late Queen in June 2006.
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