Steady as she goes for Soilfix
This article appeared in Environmental Analyst on 2nd July 2020
With offices in Bristol and Rayleigh in Essex and employing 30 full-time staff, remediation contractor Soilfix ticks most of the boxes as being a typical UK company. It lies just on the small side of being a small and medium-sized enterprise (SME) and works in the strategically vital area of preparing brownfield land for development. It’s the kind of business that the prime minister and chancellor will want desperately to survive the pandemic.
Speaking from his Thornbury home, Soilfix’s MD George Evans appears to be reasonably optimistic that the company will not only survive ‘The Great Lockdown’ but continue to grow.
Soilfix’s mission statement, he explains, is “understanding and managing risks in the ground”. Evans has done just about everything in remediation. “I’ve driven the plant and I’ve got on the shovel,” he says. Today he has mostly replaced his digger for a desk with his main role now – as one of four company directors – to drive strategy, finance and create new opportunities.
“I’d say that 70% of our work is currently enabling brownfield sites for development, which is a reflection of the way the market’s gone,” Evans says. “It’s mostly for private and affordable housing. But it’s also for commercial and industrial development.”
At any time Soilfix aims to have four or five sites running in England, recruiting staff and hiring plant equipment as necessary. An average contract would be worth around £450,000. A large one could be worth well over two million.
Evans – a geology graduate, runner and triathlete – began the company in 2004 in Newport south Wales, initially with a business partner and his wife, herself a remediation professional. He’d already gained considerable experience as a consultant in the UK and worked for Shell in Australia, cleaning up their legacy of contaminated sites.
The company expanded in the early years as the economy grew. In 2004 -2005 there was a property boom and by 2007 the company employed ten staff. However the global financial crisis in 2008 led to three years of “living hand to mouth” as the UK’s contaminated land and remediation industry was severely impacted by the sub-prime crisis.
“We were a fairly young company at that time,” says Evans. “So I think we didn’t have the trading history to give the market confidence in us. It was hard, but we survived and we came out of it more or less okay. Since then, we’ve been building the business up steadily.”
At the beginning of March, Soilfix had a healthy client list. Evans explains: “One job was cleaning legacy contamination from a former pharmaceutical company in Dagenham. That job has been piecemeal. We’re finishing it off now. We also had a large project which is part of the Wirral Waters regeneration scheme. That’s been fantastic for us, because it’s never stopped. There was also a commercial project in Romford, preparing the ground for a data centre. That has also kept going.”
“However, we had a fairly large project in Beckenham for Scottish-based Cala Homes that shut down,” he admitted. “We also had to stop work on another site, where we were working for Redrow homes.”
Good will versus litigation
Evans presented some of the difficult decisions the company had to cope with. Disrupted workflow and idle plant could have led to litigation and staff being laid off. In practice, this hasn’t happened – only three staff have been furloughed and there have been no expensive legal costs.
Evans says: “Obviously, we’ve incurred extra costs in meeting welfare requirements. But a lot of our suppliers haven’t charged us for plant that has been stood down. We have also generally shared the extra costs with our clients. I think it’s fair to say that suppliers and clients have been very reasonable. The thing about COVID-19 is that we have all been in the same boat. Our experience is that everyone has been flexible.”
So what’s the financial impact looking like over the year? Evans’ answer is upbeat. He says: “In March, our worst case scenario was that we would make a loss and eat into some of our reserves. April and May were certainly lean. But we are now pretty confident that we’re going to finish the year in the black.”
In 2021 Evans says the outlook remains foggy: “it’s hard to know. We are certainly in the guessing stage at the moment, and we’re guessing at all sorts of things, but I’m cautiously optimistic that our sector will have enough work to keep it going. There is going to be a drive for housing and infrastructure spend and it sounds like the government’s going to incentivise that.”
Constraints to remediation
Evans is convinced by statements, from the Campaign to Protect Rural England and others, that the UK has a substantial pipeline of brownfield sites with development potential. The CPRE claims that there is enough previously developed land to accommodate one million new homes.
On the Wirral, within sight of Liverpool’s gleaming new towers which are set to accommodate shops, businesses and apartments, Soilfix is preparing the way for attractive new townhouses in a former dockland area.
So what is holding the UK back from building on these sites? Evans identifies two main reasons. The first is to do with planning and the restrictive nature of the green belt.
“I think that developers just want to build houses,” he says. “They don’t care where the site is, as long as it’s viable. We’ve looked at some interesting remediation projects on brownfield sites, but they’ve been rejected at the planning stage because they are in the green belt.”
The second is down to subsidies: “Land remediation relief is a good incentive which has existed for years. The problem is that developers don’t use it in their cost forecasting, because it’s paid down the road as relief on corporation tax. It can be a substantial sum of money but it’s viewed as a bonus, at the end of the job. I think that it would be far better to have a clearer, more visible incentive paid up front.”
Long term opportunities
Evans has been in the remediation business for 27 years, 16 of them at the helm of Soilfix which was a classic business-start-up. But what will Soilfix focus on post-COVID-19?
“We’re not keen on massive growth,” affirmed Evans. “We like slow, steady, sustainable growth. Our best forecast at the moment, is that there will be enough of a market for us to achieve that. The reality is – if we can just keep our staff and our teams in place and retain a reasonable level of profitability, then we’ll be very happy. We’re not expecting to do anything amazing in the next couple of years. I think we’ll just be happy to get through them.”
However the pandemic has influenced his position on remote working in the future: “The COVID-19 crisis has changed how we’re going to work in future,” Evans says. “In terms of our recruitment plans, we’ve already changed our focus. We’ll be much more open to flexibility and working from home. People don’t need to be based near an office.”
To learn more about how Soilfix coped with the COVID-19 crisis, you can watch the replays of Environment Analyst’s Managing COVID-19 in the Brownfield Community panel discussions which George Evans kindly appeared on twice: