SISK GROUP, by far the biggest building business in the State, is approaching the final stages of a redundancy programme in which it is eliminating more than one-third of its workforce over two years.
Sisk has laid off 750 staff since the beginning of 2008, when it had 2,800 staff, and it plans to cut as many as 220 additional jobs by the end of this year.
In the face of extremely difficult conditions in Irish construction and weakness in Britain, pretax profits fell 62.6 per cent to €24 million in 2008 and revenue fell 10.1 per cent to €1.63 billion.
Liam Nagle, Sisk chief executive, said current activity levels imply a drop of 20 per cent in full-year revenues in 2009. “I think we’ll be looking at further declines in 2010 but it’s too early to call that,” he said.
The company laid off 600 staff in 2008 and another 150 since January. Asked whether the next cuts would bring redundancies to an end, he said: “In truth I don’t know. That’s our best plan as it stands today. We obviously have to react to events.”
Sisk incurred significant redundancy costs last year but Mr Nagle declined to quantify them. However, he said such costs ranked behind separate individual once-off costs incurred in respect of property write-downs, equity investment fund write-downs and provisions for bad debts.
By expanding in Britain and opening new units in Poland, Abu Dhabi and Dubai, Sisk hopes to protect itself from the Irish recession through diversification.
In Britain, Sisk aims to expand its geographic coverage beyond London, Birmingham, Manchester and Bristol and take on bigger projects. It has a licence to operate in Abu Dhabi and is engaged in a mixed-used retail and residential project in Dubai. In a joint venture with Roadbridge, it is targeting road-building projects in Poland.
Mr Nagle said revenues may drop to about €1.2 billion in the near-term, but added that the internationalisation strategy was designed to help Sisk achieve revenues of €1.5-€1.6 billion again.
While the origin of sales would be fundamentally different in that case, he acknowledged that annual revenue could drop to €1 billion in the next three years if the diversification doesn’t work.
One of the largest privately-held businesses in Ireland, Sisk Group is controlled by members of the Sisk business family. Shareholders’ dividends rose last year to €8 million from €4.6 million in 2007. Shareholders’ funds fell to €204.4 million in 2008, down from €216 million.
In addition to construction, the group owns distribution company Origo and a number of healthcare businesses. Origo, which distributes Bosche and Toshiba products, saw its turnover drop 23 per cent last year, while operating profit fell to €918,000 from €3.04 million.
Mr Nagle said recent contracts signed by Sisk included deals to build extensions to the Mater hospital and the Blackrock Clinic in Dublin and the Galway Clinic.
It will also build the T5 Hilton hotel at Heathrow airport, London.
