Industry:
Facilities Management, Construction, Student Accomodation, Universities, Higher Education.
Services:
Strategy Consulting, Market Sizing, Competitive Assessment, CEO Advisory, Investor Analysis, Benchmarking.
The Client:
The client is UK’s major provider of on-campus residential and academic accommodation infrastructure. With over 35,000 rooms in operation or under construction, the client is heavily focused on the higher education sector in the UK. In addition to designing, building and financing, it also operates the on-campus residential and academic infrastructure.
The Challenge:
The client wanted to understand how it compares against its competition in terms of financial strength and profitability. The client also wanted to get a sense of what kind of profitability improvement can its shareholders expect through the business plan.
The Solution:
It was observed that the client did not have an obvious direct competitor. As such, for the purpose of this assessment, the Higher Education FM sector was considered, and two segments of providers were identified:
Facilities Management, Construction, Student Accomodation, Universities, Higher Education.
Services:
Strategy Consulting, Market Sizing, Competitive Assessment, CEO Advisory, Investor Analysis, Benchmarking.
The Client:
The client is UK’s major provider of on-campus residential and academic accommodation infrastructure. With over 35,000 rooms in operation or under construction, the client is heavily focused on the higher education sector in the UK. In addition to designing, building and financing, it also operates the on-campus residential and academic infrastructure.
The Challenge:
The client wanted to understand how it compares against its competition in terms of financial strength and profitability. The client also wanted to get a sense of what kind of profitability improvement can its shareholders expect through the business plan.
The Solution:
It was observed that the client did not have an obvious direct competitor. As such, for the purpose of this assessment, the Higher Education FM sector was considered, and two segments of providers were identified:
- FM providers
- Direct let accommodation providers
- Barring exceptions, FM providers generally make margins between 2.5 – 7.2%
- As a comparison, the client was usually bidding between 8 – 10% contract margins. However, after factoring in central overheads, the client’s margins are comparable to the best performing FM players
- The possibilities of the client squeezing out more margins from its contracts seems very unlikely
- Direct let operators usually make better margins when compared to traditional FM players
- This is attributable to the fact that FM is only a part of the deal for Direct let operators, and they also take on extra risk due to the long-term deals
Responses