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EP_19.jpg Jan/Feb 2006
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Fastflow Pipeline
Komatsu
New Steel
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A SMOOTH FLOW
With 230 employees Fastflow provides water and gas network services to the utilities sector.

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Fastflow Pipeline Services Limited (FPS) is one of the UK’s leading specialists in trenchless technology and is involved in repairing, renewing and refurbishing pipelines, primarily for clients in the water industry. With a turnover of £18 million, it designs, builds, rehabilitates and maintains the underground infrastructure for blue chip utility companies.

In July 2005, a team from Hill Dickinson, the leading UK independent law firm, acted on behalf of Neil Armstrong and his company, Directorder Limited, on the acquisition of Flastflow Pipeline Services, a subsidiary of the FTSE 250 listed company Northumbrian Water Group. Neil put in an enormous amount of effort to secure the deal of Fastflow and has worked hard since the management buy-in to allow the company to substantially develop its market share.

Neil, who was recently managing director (northern region) for Alfred McApline Infrastructure Services, began his career as an engineer with Kennedy Construction Group Limited. Commenting on the acquisition, he says: “Over the last decade, we have seen a vast amount of consolidation in the service provision sector. I felt this prolonged period of consolidation had left a vacuum for a good, solid, small to medium sized contracting service provider to the utilities market. Therefore, I decided to acquire Fastflow Pipeline and use my skills to develop the organisation and make it successful.”

Headquartered in Washington, Fastflow Pipeline Services is planning to create many new positions over the coming years, recruiting new people in order to capitalise on good market conditions. This is part of what has been a huge resurgence in the North East and across the UK, generally, which has seen many firms plan for expansion. Neil explains: “Over the next five years we will be trebling, if not quadrupling, the business’ size.

“I have brought this business to grow it,” adds Neil. “The first and most important thing that we have tried to inject into the business is accountability and ownership. I think that this is key in any business. Personally I believe I have brought a bit of focus and a bit of vision to the business and we now have a clear view of where we see the business going. The systems we have brought in basically lend themselves to that accountability and ownership. For example, we now have weekly numbers from all our sites, so we can know very quickly which jobs are profitable, why they are profitable, which jobs are losing money and why they are losing it. I think we have also tried to bolster our management team by appointing some good quality middle management personnel. We have also introduced a very good incentive scheme, so we are franchising the workforce as best we can. These are ultimately the key areas where we have looked to underpin the overall performance.”

At present, Fastflow has a number of different contracts, but fundamentally its major customer is the Northumbrian Water Group. Neil continues: “The support of Northumbrian Water has been essential in the past because of the company’s focus on its core water business. However, further growth under their umbrella would have been fairly difficult. There is a huge opportunity for us to grow our business, assisting other utility companies in a market that has seen substantial consolidation in the last decade. This has resulted in a low level of competitiveness and often in poor quality of service. Most utility companies are dissatisfied with the level of service that they received and the associated high costs. We aim to address this by providing better value for money, a quicker response time and a more personable service.”

A Quicker Response
Fastflow is certainly unique in this respect. Neil has fashioned a service where customers receive a better economical package, a quicker response, a higher level of service and a much more personal package. “We are trying to build a company that is hopefully going to grow into a business with a turnover of approximately £80 million per annum,” he comments. “To do this we have to provide a owner-manager type of service, which has a quick response time, while being responsive to change and understanding the needs of our clients. I believe we are now a much stronger organisation – one that has its finger on the pulse, so to speak. This is fairly different when compared to the larger organisations, which offer a largely impersonal service. I think that is an area where Fastflow can excel. I also believe we can be a lot more productively efficient and offer a better economic solution.”

In a period of only a few months, Fastflow has built the necessary platform from which it will be able to develop within the domestic utilities market. Nevertheless, the business still faces a number of challenges, as Neil explains: “I think the key challenge for me is getting the right people. That is the absolute ultimate goal. A business can either flounder or it can be a complete success based on the people it employs. So, the biggest challenge for me is making sure we have got the right senior management that will allow us to grow the business. As we diversify into other areas, and continue to acquire new businesses, it is important we have the right people in place to lead the company and make the correct strategic decisions.”

He continues: “We have been eying up a number of strategic opportunities over the last six months but we haven’t actively sought to acquire them. We are looking to work basically in the North of England, so we have limited our interest to this area. We wouldn’t look at anything south of that unless it was very attractive. We are also looking at a number of contracts in Scotland, but obviously wherever we enjoy success we will look to establish a depot.”

There are many opportunities for a company like Fastflow in the current climate. It is a £20 million business with ambitions of quadrupling that. With a unique approach to contracts, which sees the company focus on the delivery of a fast and efficient service, Fastflow can expect the number of contracts to rise rapidly, while enjoying the associated benefits of such a boom.  CT-E

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