Heath's win is as symbolic as it is real.
See also: Heath wins ten-year Crossrail deal
In recent times, Heath Lambert has rarely been out of the headlines.
But behind the drama of aborted takeover bids, strategic reviews, holes in its pension fund and legal spats with defecting staff, the former top ten UK broker has been slowly and steadily reinventing itself.
The signing of the blockbuster Crossrail deal – the £16bn scale of which would make any Dubai-based contractor proud – is the culmination of a period of rationalisation and strategic realignment at the company under the banner of retail broking and the stewardship of chief, Adrian Colosso.
It also serves as a timely reminder that the global brokers cannot have it their own way when it comes to big business. JLT, the company that attempted to buy Heath just two years ago, is understood to have been the frontrunner in the Crossrail bid, but despite its leading credentials in the construction sector, came up empty.
It is not the first time Heath has fended off the attentions of its larger rivals. In the Autumn – the time the Crossrail contract was first being tendered – another global broker was on the verge of prizing away one of Heath’s most prized accounts: Morley, one of the biggest active asset managers in the UK.
It failed, and Heath rejoiced.
Nonetheless, a number senior staff departures ensured that the broker remained under close scrutiny. The names included Hugh Champion, managing director of the company’s facilities division (which accounts for almost a tenth of the company’s brokerage) and Tom Ernoult, who held the same position in Heath’s national division, and helped deliver year on year growth in the first half of last year of over 50 per cent.
At the same time, concerns about the performance of Heath’s wholesale business, which Colosso himself had described as “non-core”, persisted – even if it accounted for just a sixth of the group’s total revenue. This included international unit, GBS’, which reported a 15 per cent year on year fall in income in March and UK wholesale business, FSJ.
Happily for Heath, both those divisions now have new homes in the form of Gallagher and Cooper Gay, where they should now flourish as part of very different business models.
And though Heath will no longer suffer any of the slings and arrows of attempting to be all things to all men, it is important to note that the company still retains wholesale elements, including in its project risks division, the unit charged with overseeing the Crossrail project.
Two of the other business involved, the transportation and construction divisions, grew their income by nine and five per cent respectively last year. This is part of a promising picture for Heath, which also includes 13 per cent growth in its personal lines portfolio, culminating in 2007 earnings (EBIDTA) for the group of £18.5 million – up six per cent year on year.
Heath attributes part of the increase, and indeed the awarding of the Crossrail contract, to a restructuring that placed most of its specialist units under a single management, allowing expertise to be more freely exchanged.
Alongside this move away from wholesale to retail broking, earlier this year Colosso declared his intention to move Heath from its London to more of a regional focus.
Iroincally, he now finds himself broking one of the largest and potentially most transformational construction projects in the history of the city.
It presents the ideal chance for the broker to prove any lingering doubters about the business wrong, and help realise its chief’s long-standing goal to take the company public – in the most official sense.