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Facilities Management - UK - October 2015

Facilities Management - UK - October 2015

“The facilities management industry has grown strongly both in times of recession and economic growth. The development of the market has continued in the public and private sectors, which are now demonstrating key differences in growth. However, the contracting out of non-core activities continues and generally realises greater benefits than perceived at the time of commissioning.”

– Terry Leggett, Senior B2B Analyst

This report answers the following key questions:

What effect will increases in the minimum wage have on the facilities management sector?
How is public sector demand for facilities management being affected by reduced public sector expenditure and legislative changes?
Will the industry continue its rapid development?
Will growth in total facilities management contracts grow ahead of single or other multiple service bundles over the next five years?
What sectors are likely to generate the greatest demand for facilities management services in the next few years?


EXECUTIVE SUMMARY
The market
Figure 1: Actual market for facilities management services in the UK, 2010-14
Figure 2: Segmentation of the potential market for facilities management services in the UK, by type of
contract, 2010-14
Figure 3: Adoption techniques of contracted out service users, by mix of contracts, 2014
Figure 4: Segmentation of the market for total facilities management and contracted out facilities
management, by type of service, 2014
Figure 5: Forecast segmentation of the potential market for facilities management services, by type of
contract, 2015-19
Market factors
Figure 6: Motivations for outsourcing, 2014
Figure 7: Motivational versus realised objectives for outsourcing, 2014
Companies
Figure 8: Analysis of the changes in the structure of the combined facilities support activities industry, 2011-
15
What we think
KEY ISSUES
How will the FM sector be affected by the recently announced minimum wage increases?
Is the decision to outsource services driven by financial considerations?
What are the most common services provided through a facilities management contract?
Is the industry highly concentrated?
INTRODUCTION
Definitions
Methodology
Abbreviations
Issues in the market
Market positioning
The supplier
The customer
UK ECONOMY
Overview
Figure 9: UK GDP quarterly development, 2003-15
Figure 10: UK GDP in economic downturns and recoveries since 1979
Inflation
Interest rates
House prices
Consumer spending
Manufacturing
Business investment
Figure 11: UK GFCF 2003-15
Imports
Exports
MARKET FACTORS
The economic and political environment
A long-term outsourcing trend
Figure 12: Motivations for outsourcing, 2014
Figure 13: Top three objectives for outsourcing, 2014
Figure 14: Motivational versus realised objectives for outsourcing, 2014
Figure 15: Objectives for outsourcing, by company size, 2014
Impact of legislation
MARKET SIZE
Chapter summary
The market
Figure 16: Potential market for facilities management services in the UK, 2010-14
Figure 17: Actual market for facilities management services in the UK, 2010-14
Figure 18: Comparison of the actual market for facilities management services compared with the potential
market in the UK, 2010-14
MARKET SEGMENTATION
Chapter summary
Market segmentation
Figure 19: Segmentation of the potential market for facilities management services in the UK, by type of
contract, 2010-14
Figure 20: Segmentation of the potential market for facilities management services in the UK, by type of
contract, 2014
Figure 21: Adoption techniques of contracted out service users, by mix of contracts, 2014
Figure 22: Types of services included in an FM contract, 2014
Figure 23: Segmentation of the market for TFM and contracted out facilities management, by type of
service, 2010-14
MARKET TRENDS
Chapter summary
Market trends
Minimum wage increases impacting costs
Figure 24: The UK National Minimum Wage, 2009-15
Figure 25: The impact of the UK National Minimum Wage rising in 2020, by industry
TUPE changes reducing costs
New central government contracting model for facilities management
EU directive encouraging opportunities for SMEs in public sector provision
Continued growth in bundled service contracts and total facilities management (TFM)
Motivation developments
Regional bias of suppliers moves away from London
Figure 26: Regional distribution of companies in the combined facilities support industry, 2009-15
Figure 27: Regional distribution of private business establishments in the UK, 2009 and 2015
INDUSTRY STRUCTURE
Chapter summary
Industry development
Figure 28: Analysis of the changes in the structure of the combined facilities support activities industry,
2011-15
Structure by employment
Figure 29: Analysis of the employment structure of the combined facilities support activities industry, 2014
and 2015
Structure by turnover
Figure 30: Analysis of the financial structure of the combined facilities support industry, 2014 and 2015
COMPANY PROFILES
AMEY UK
Figure 31: Financial analysis of Amey UK, 2010-14
Company strategy
ARAMARK
Figure 32: Financial analysis of Aramark, 2010-14
Company strategy
BERENDSEN
Figure 33: Financial analysis of Berendsen, 2010-14
Company strategy
CAPITA
Figure 34: Financial analysis of Capita, 2010-14
Company strategy
CARILLION SERVICES
Figure 35: Financial analysis of Carillion Services, 2010-14
Company strategy
COFELY WORKPLACE
Figure 36: Financial analysis of Cofely WorkPlace/Balfour Beatty WorkPlace, 2009-13
Company strategy
EMCOR GROUP (UK)
Figure 37: Financial analysis of EMCOR Group (UK), 2010-14
Company strategy
G4S
Figure 38: Financial analysis of G4S, 2010-14
Figure 39: Geographic analysis of G4S turnover, 2014
Figure 40: Sector analysis of G4S turnover, 2014
Company strategy
INTEGRAL UK
Figure 41: Financial analysis of Integral UK, 2010-14
Company strategy
INTERSERVE
Figure 42: Financial analysis of Interserve, 2010-14
Figure 43: Turnover analysis of Interserve, 2014
Company strategy
ISS FACILITY SERVICES
Figure 44: Financial analysis of ISS Facility Services, 2010-14
Company strategy
MITIE GROUP
Figure 45: Financial analysis of Mitie Group, 2011-15
Figure 46: Financial analysis of MITIE Group, revenue by segment, 2015
Company strategy
OCS GROUP
Figure 47: Financial analysis of the OCS Group, 2010-14
Company strategy
RENTOKIL
Figure 48: Financial analysis of Rentokil Initial, 2010-14
Company strategy
SERCO GROUP
Figure 49: Financial analysis of Serco Group, 2010-14
Figure 50: Turnover analysis of Serco Group, 2014
Company strategy
SKANSKA RASHLEIGH WEATHERFOIL
Figure 51: Financial analysis of Skanska Rashleigh Weatherfoil, 2010-14
Company strategy
SODEXO
Figure 52: Financial analysis of Sodexo, 2010-14
Company strategy
WS ATKINS
Figure 53: Financial analysis of WS Atkins, 2011-15
Company strategy
DEMAND STRUCTURE
Chapter summary
Construction output
Figure 54: Analysis of construction output in Great Britain, by type, 2010-14
Repair and maintenance
Figure 55: Segmentation of the R&M activity in Great Britain, 2014
Public housing
Figure 56: Analysis of Decent Homes backlog programme allocations, 2012-15
Figure 57: Analysis of repair & maintenance output in the public housing sector in Great Britain, 2010-14
Private housing
Figure 58: Analysis of repair & maintenance output in the private housing sector in Great Britain, 2010-14
Public non-residential
Figure 59: Analysis of repair & maintenance output in the public non-residential sector in Great Britain,
2010-14
Private non-residential
Figure 60: Analysis of repair & maintenance output in the private non-residential sector in Great Britain,
2010-14
Infrastructure
Figure 61: Analysis of repair & maintenance output on infrastructure in Great Britain, 2010-14
PFI & PF2
Figure 62: Summary of PFI projects, 2011-2014
Figure 63: Capital costs of current UK PFI projects, by department, 2012-14
Figure 64: Estimated nominal payments under current PFI contracts, 2015-50
Distribution of workplaces
Figure 65: Number of UK PAYE/VAT-registered business establishments by industry and employee levels
by public and private sectors, 2014
FORECAST
Chapter summary
Potential market size
Figure 66: Forecast actual market for facilities management services in the UK, 2015-19
Market segmentation
Figure 67: Forecast segmentation of the potential market for facilities management services, by type of
contract, 2015-19
Figure 68: Forecast segmentation of the market for TFM and contracted out facilities management, by type
of service, 2015-19
Industry
Figure 69: Length of outsourced facilities service contracts
FURTHER SOURCES AND CONTACTS
Trade associations
Trade magazines
UK B2B
Trade research
Informal
Formal
Desk research
Consumer research
Sampling and weighting
Definitions
Qualitative Research
Further Analysis
Statistical forecasting

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