“We Care About Our People and Invest in Them at Every Level”
Steve Bowcott, Chief Executive Officer, John Sisk & Son, speaks to BARRY MCCALL about the firm’s stellar achievements in 2018, and the challenges that need to be addressed by the industry.
With Sisk topping the Construction magazine CIF Top 50 Contractors 2019, CEO Steve Bowcott has much to celebrate. In addition to this, over the past year the company has made huge strides in terms of on-site productivity as well as expanding its reach in into regional Ireland, the UK and Europe. But there are issues of concern for the Welshman who heads up Ireland’s largest construction firm, particularly the slow rollout of civils projects in the country and the lack of Government support for smaller contractors looking to bring on new apprentices.
“Sisk had an outstanding year in 2018,” says Steve Bowcott. “We exceeded €1bn in revenue, well up on last year, and the regional business in Ireland produced more revenue than Dublin for the first time in a long time. The regions outside of Dublin accounted for more than €400m while Dublin was over €300m.”
That strong regional performance was bolstered by some very high profile projects including the Center Parcs holiday park in Longford, which is due to open this summer.
“We built more than 450 lodges and a central building with restaurants, tropical swimming pool and spa. That is going to be great for the economy and employment in the area.”
Another major project was The Curragh Racecourse redevelopment, which opened for racing in April. That comprised a major new grandstand, entrance and associated bars and restaurants. “Sisk sponsored a very successful and enjoyable race day in September 2018 at the course, and we are looking forward to attending the races again this summer,” says Steve Bowcott.
In the pharma sector, the Bio Cork II project for Johnson & Johnson involves the construction of a new production facility, as well as the expansion of the existing warehouse, canteen, laboratories, offices, wastewater treatment plant, central utilities and car parking at their facility at Ringaskiddy in Cork Harbour. It is scheduled for completion later this year.
In Dublin, the highlight was undoubtedly the Capital Dock development. Heralded as a ‘city within a city’, the development includes Ireland’s tallest residential building, along with 32,000 sq m of commercial space.
“The mixed-use development, spread across three apartment blocks, will bring a further 190 homes to the private rental sector in the city,” he adds. “This was our fourth scheme with Kennedy Wilson.”
And the pipeline remains healthy.
“We are starting six new projects in Ireland this year, all worth in excess of €40m,” he points out. “We set up our housing division, Sisk Living, in 2016, and we will have 1,500 units on site this year – 460 of which are social housing.”
2018 saw Sisk move into facilities management with the acquisition of 50% of the Designer Group’s facilities management division and the establishment of a new joint venture, Sensori FM, between the two companies.
“We can now offer mechanical and electrical services and fabric maintenance on most buildings,” he says. “This means we will continue to work with clients after projects are completed. Sensori is now jointly owned by two family-owned Irish companies, and that’s great news.”
Steve Bowcott describes the Sisk business as a three-legged stool with operations in Ireland, the UK and Mainland Europe all making important contributions to the group.
“The UK business grew substantially last year having had some difficult times,” he notes. He points to several highlights in the UK, including the Royal Academy of Arts in London and a major development at Circle Square in Manchester.
The Royal Academy of Arts is a landmark restoration and construction project in the heart of central London, which brings together for the first time two listed buildings with a unique link bridge as part of the 250th anniversary of the institution.
Circle Square is a new city centre neighbourhood in the heart of Manchester’s Oxford Road Corridor innovation district, where Sisk is building the residential and commercial elements of the £240m project. All contract works on the project, which at peak will employ 1,300 people, are due for completion in 2021.
Another standout project is Wembley Park in London.
“We have been working with Quintain at Wembley Park since 2006,” he says. “During this period, we have successfully delivered several projects of note in the area. E03 Canada Court at Wembley Park is our eighth project on the campus. It commenced on site in 2017 and will be completed in 2020.”
The International Convention Centre, Wales, which Sisk is also constructing, is located within the internationally-acclaimed former Ryder Cup venue, the Celtic Manor Resort Hotel in Newport. This is due to open later this year and will be capable of accommodating up to 5,000 delegates with a total floor space exceeding 26,000 sq m.
In Europe, Sisk began working with Facebook and Microsoft for the first time, and business remains strong in that market.
At the launch of Sensori FM, L to r: John Lenihan, Lenmac Services; Fergal Lawlor and Stephen Bowcott, Sisk; Michael Stone, Designer Group; and Mark Cullen, Sensori FM.
“We have achieved good levels of profitability and strong cash flows,” he continues. “There is no debt in the business, and we have €160m in cash on the balance sheet. We will exceed €1bn in revenue again in 2019, and 90% of that has already been secured.”
While Sisk may be in good health, Steve Bowcott believes that the same cannot be said for the industry as a whole or some of the fundamentals which underpin it. The first issue he highlights is productivity.
“I worry about productivity levels in the Irish industry,” he says. “We are measuring productivity on all of our sites and taking steps to improve it. We are doing simple things like making sure materials flows are better and putting facilities closer to workers. This allows people to produce more while working on a job. We are also making some changes and improvements in the way we approach training. Induction is now done before workers come on site, for example. That seems to be working.”
Automation will also help.
“We have just brought in our first robot for manual handling in London at the cost of £250,000. We are trialling it there, and if it works, we will introduce it across the company. It takes heavy loads away from our people, and that has to be good.
“There is a general view that we need 66,000 additional construction workers in the industry,” he continues. “I would say it’s closer to 25,000 – we are happy to pay good wages, but need the productivity to make it affordable to build.”
Another issue is infrastructure. “I am really worried about this. We are not doing enough in roads and rail to make travel easier for people. We can’t get people from outside Dublin to work on projects in the capital because of transport issues. We need better rail links between Dublin and regional cities like Limerick and Cork. We also need to improve the Belfast link.”
Sisk is doing its bit by addressing working patterns.
“We are changing shift patterns to ease commutes for our people, but investment in rail and roads is badly needed,” he adds.
“As an industry, we don’t have enough apprentices coming through. Sisk has always invested in apprentices, and we have a long tradition of recruiting and training people in our business, who go on to work across the industry. But a lot of smaller companies across the industry need help to ensure that enough apprentices are being trained. The Government has got to fund training for people. In Europe, there are schemes where the government pays the first year of an apprenticeship for someone unemployed. They also subsidise the second year. That would be a great help here in Ireland. Sisk was the lead sponsor for the Ireland Skills Live event in the RDS earlier in the year. That went brilliantly well. A lot of kids and parents who had no idea about apprenticeships came along.”
Steve Bowcott suggests a way for the Government to promote apprenticeships in the industry.
“If the Government specified that for every contract worth more than €10m, the contractor had to hire one apprentice for each €5m above that level, it would transform the situation. In three to four years, we would get to a position of neutrality in terms of skills and labour supply and demand.”
The same approach needs to be taken with the adoption of BIM, he contends.
“BIM Level 2 should be the minimum requirement for public and private contracts. Productivity and quality will improve greatly if it is. Everything was done on BIM for the Center Parcs project. We were able to improve the roof installation productivity by 24% as a result of data collection and the use of BIM.”
Steve Bowcott is very proud of the Sisk culture and ethos, which he believes play a vital role in the company’s continuing success.
“We are a family-owned business celebrating 160 years in existence in 2019, and we have a strong set of values – care, integrity and excellence – which underpin everything we do. We employ approximately 1,400 people, and we have always been about people. We invest heavily in our people, and we look to attract and retain the best so we can deliver the best to our customers.”
Indeed, caring begins with people.
“We care about our people and invest in them at every level – from our unique joinery training centre in Dublin, where we train apprentices, our internship and placement programmes, and our site-based apprenticeship programme, to our Excelerate Graduate Programme and our Elevate Management Development Programme.”
While staff retention rates are extremely high, Sisk boasts an excellent age profile within its workforce.
“Our business needs experience to deliver, but we also need fresh thinking,” he explains. “Overall, 22% of our people are aged between 21 and 30 years of age, and 29% are between 31 and 40 years of age. We are always looking to attract young people into our business. We have a very low level of turnover in the business. Unfortunately, that means we get a lot of retirements. The most recent had 46 years’ service with us. We are really proud of being a company that people want to stay with for that long.”
An Taoiseach Leo Varadkar, TD, visiting the John Sisk & Son-led Manchester Circle Square project, the £750m JV between Bruntwood SciTech and Vita Group.
Good Mental Health
But there is no sense of any laurel resting setting in.
“We are always looking for ways to make our people’s lives better and safer. Last year we had 800 members of staff at workshops to come up with suggestions about how we can do things better and how we can become a better company. They came up with loads of suggestions in areas like mental health and wellbeing and nutrition, and we are implementing many of them.”
Mental health is extremely important to him and the company.
“One in four people aged 28 and under in the industry has thought about suicide or self-harm at some stage,” he notes. “That’s a staggering statistic. We have trained 80 key people across the company in mental health awareness. They can identify the signs early, and they are our first line of defence. They can refer people to the experts. One of our guys wrote a fantastic piece for our internal newsletter on how he came through mental health problems. That was very powerful.”
One initiative that Steve Bowcott is particularly proud of is the Sisk Suppliers Awards.
“We have our own supply chain awards. We have 9,000 suppliers, and we had the top 60 attend an event, where we presented 12 of them with awards for excellence. The feedback from that was great.”
Looking to the future, he says the key to strong results is relatively simple, keeping the number of loss-making projects to a minimum.
“We have only one project out of 90 that is currently under water, and we are making improvements to that,” he says with some pride. “We have a risk review committee, a pre-construction review team, and I personally review all large projects. There are a number of lines we will not cross. That’s how we made a profit of €30m and put a further €10m into investment funds.”
Steve Bowcott believes that industry growth will level off.
“Output is expected to reach €21bn for 2019, and I think it will level off around that. The private rental sector is very active at the moment, and we will complete 1,000 private rental units this year. But there is incredible nervousness in the public sector about releasing work. That’s a serious issue, and civil engineering businesses will reduce substantially in 2019/2020. That’s doubly serious because infrastructure spending is incredibly important. For every one euro spent in a local infrastructure project, €2.63 is generated in the local economy.”
And the future for Sisk? His answer characteristically comes back to people.
“We have a strong balance sheet, and we are continuing to grow our offering by moving into facilities management. We will see continued growth in our Irish, UK and Mainland Europe businesses in the coming year. But our number one priority is to ensure that our that our staff have certainty of work, and that is where our commitment is.”