Sicon group, owner of the Sisk construction business, will return to profit this year after difficulties with big contracts in Britain resulted in a €24m pre-tax loss in 2015.
Ger Penny, executive director at Sicon, said the company had restructured its British operations after being hit with losses on seven fixed-price contracts in the greater London area. The prices for the contracts were agreed in 2013 but costs rose by percentage increases into the high teens in the past two years, said Penny.
While turnover rose by almost €200m last year to €1.09bn, Sicon went heavily into the red. In 2014, the group, which is privately owned by the Sisk family, recorded a pre-tax profit of €8.5m on turnover of €900m.
“It was a disappointing result last year, but 2016 has been a very good year right across the business,” said Penny. “We also have good line-of-sight for 2017.”
Turnover will be more than €1bn this year and the Irish and UK businesses will be profitable, said Penny. The last of the fixed-price contracts in Britain will be completed by the end of June, and the company is avoiding work in London.
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“An enhanced strategy has been developed for the business. We are being much more selective and sector-focused,” added Penny.
The group employs 1,500 people directly and more than 10,000 on its sites. It is working on 62 contracts in Ireland, the UK and Middle East.
The heavy losses in the UK last year were softened by a €13.7m profit in the Irish business, which trades as John Sisk & Son. It had turnover of €535m, a 24% rise on the previous year. The company is working on an extension of the N17 Gort-to-Tuam road and is building the Luas Cross City tram line in Dublin in a joint venture with the Portuguese company Steconfer. It is also building data centres in the Dublin suburbs for Microsoft and working on projects for other multinationals.
“We have done work with most of the pharmaceutical companies in Ireland for decades. We have a big process engineering capability,” said Penny.
Sisk is the preferred building partner for US property group Kennedy Wilson, which has several residential and office developments in Dublin. It is also building a large office block on Burlington Road in Dublin for developer Johnny Ronan and the British group U&I.
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Penny said the company had scaled back its business in the United Arab Emirates after finishing a 200-bed hospital for the government there this year.
Sicon owns Origo Distribution, a distributor of Bosch, Stihl and Viking products, and had €30.1m in shareholders’ funds and €81.4m in cash at the end of last year. The Sisk family were not paid a dividend by the group last year.
“We are very lucky to have a family as shareholders. They have been very supportive throughout,” said Penny.