CEO & Chairman message

The past year has seen GHD make significant progress towards our Strategy to 2020 objectives, and a single brand renowned for client service and a culture of safety.

It has also validated much of the rationale underpinning our strategy, which increasingly differentiates us and corroborates the benefit of running our own race rather than following others.

Our future is clearly and unambiguously built around using our leading technical skills to make our clients successful in their endeavors and to provide great service. To do this, we attract and retain the very best people. Our model of 100% employee ownership very much supports this.

Over the past couple of years, many of our competitors have sold their businesses or brought in outside equity partners. This has changed the culture and fabric of these firms, often accompanied by external senior executive appointments.

In contrast, GHD has been able to successfully transition ownership from generation to generation, and develop leadership succession from within the company. This has made us an attractive place to work and grow. For our clients, this means they are dealing with professionals who have a vested interest in their success and are committed to delivering over the long-term. It brings continuity and greater certainty.

Clients

Our approach of placing our clients at the very heart of our business is delivering results. A number of client relationship management initiatives have been implemented in order to better understand our clients' businesses. Progress is evident from our client feedback surveys with the satisfaction rate in our performance rising to 87%.

A low business growth environment around much of the world, rapidly changing commodity prices, and a few political surprises have made the business landscape challenging for many of our clients.

In response to client needs, we have launched GHD Advisory to provide a wide range of services beyond engineering, utilizing our deep technical expertise in areas such as: infrastructure; investments and economics; asset management; regulatory and risk; strategic communications and engagement; innovation; and digital disciplines. These services extend through the full asset life cycle from initial feasibility, siting and planning, to demolition and rehabilitation.

Safety

In our continuing focus to build a safety culture at GHD, we delivered our first Safety Culture Survey in FY16. Results were encouraging, and survey host IBM categorized several responses as being world class. While there are many opportunities in the future to refine our safety culture, it is clear that we are succeeding in instilling safety in our everyday business.

The recent introduction of Safety Means Awareness, Responsibility, Teamwork (SMART) Behaviors is a significant step in our journey to increasing accountability and trust in strengthening our safety culture.

To sharpen our focus on those activities that directly impact employee involvement and reduce the frequency of incidents, we introduced performance targets this year associated with positive interactions globally. Pleasingly, we have seen a 25% improvement in positive interaction this year compared to FY15, achieving a rate of 3.62 per full-time equivalent against a target of 3.0.

Overall, our efforts have yielded excellent results this year with a reduction of 15% in our total recordable incident rate, placing our incident frequency rates well below many of our global competitors.

With our business becoming increasingly connected across our regions, we have strengthened our Health, Safety, and Environment (HSE) systems to enable growth into higher risk industries in Australia. A highlight was being awarded a place on the Chevron Environmental Services Panel and achieving Contractor Health, Environment, and Safety Management (CHESM) accreditation. Going forward, our challenge is to broaden the scope of our HSE approach to align with global client expectations.

People and communities

Notwithstanding challenging conditions in some of our markets, GHD continued to invest in the development and training of our people through the GHD Business School, and the recruitment and training of graduates. In all, more than 25,000 training initiatives were delivered in FY16.

During the year, we made considerable headway in creating a more diverse and inclusive GHD by broadening our understanding, embedding our strategies and addressing gender balance more broadly across the business. We also advanced our programs for Indigenous people employment and training.

Contributing to the communities in which we operate is key to our longterm sustainability. More importantly, it demonstrates the beating heart of GHD. In this regard, we are extremely proud of our people’s increasing involvement in various activities that are making a real difference to those in need through our GHD in the Community program.

Financial performance
GHD’s gross revenue grew to AUD$1.68 billion (USD$1.22 billion) for the year.

We experienced stronger contributions from the two smaller regions of our business – Asia Pacific and Europe/Middle East.

While lower commodity and energy prices impacted our North American business, the financial stability of the broader GHD business gave us the strength to capitalize on market fluctuations and uncertainty.

Meanwhile in Australia, we have evolved our strategy and realigned our operating model to build a more diverse and resilient business.

Operations

North America

  • During the year, we completed the unification of our North American business under the GHD brand, positioning us strongly to capture emerging opportunities.
  • We restructured our environmental business to deal with economic stagnation, invested in strategic appointments in water and transport, and further diversified our services.

Australia

  • Significant efforts in previous years saw us increasing our agility in the market place and refining our client service approach.
  • We secured some significant wins in the transportation sector, which is benefiting from extensive government capital commitment.
  • Key growth initiatives were implemented, including the establishment of a Remediation Contracting business.

Europe/Middle East

  • In the UK, our business developed and broadened as a consequence of the GHD Livigunn merger just prior to the commencement of the financial year. This provided a strong platform for growth, which saw us make significant headway in the power sector.
  • Considering the geopolitical risks and uncertain market conditions in the Middle East, our business produced outstanding results.

Asia Pacific

  • New Zealand and the Philippines contributed strongly to our performance, especially in the transportation, environment, and energy and resources sectors.
  • Despite negative market trends in the mining sector in Chile, we delivered robust performance in the environment, energy, and marine sectors on the strength of our client relationships.

Leadership transition

Ian Shepherd retired from the business in March after nearly 8 transformational years as CEO. GHD continued an unbroken history of development and succession from within the company, next appointing Ashley Wright as CEO.

Outlook

Looking to the future, GHD remains committed to the following:

  • Creating value for clients throughout the asset life cycle with leading management and technical skills as well as innovation
  • Further enhancing the service experience for our clients
  • Developing the talent of our people and maintaining an environment where they can thrive
  • Sustaining the betterment of the communities in which we work and play

Thank you to all our clients for your continued support and confidence, and to our people for their dedication and commitment.

 

Russell Board                                   Ashley Wright
Chairman                                         CEO