Sisk’s parent reports ‘strong performance’ despite construction lockdown

Rising costs left operating profits at builder Sisk’s parent trailing by more than 25 per cent at €21 million last year.

Sicon Ltd, holding company for construction group Sisk, reported a "strong performance" despite Government lockdowns that shut its Irish sites for a period in 2020.

Turnover at Sicon, which owns building businesses in Ireland, Britain and Europe, as well as distribution and manufacturing companies, rose to €1.5 billion last year from €1.396 billion in 2019.

However, cost of sales and operating expenses increased to €1.48 billion in 2020 from €1.367 billion the previous year.

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Sicon’s operations earned profits of €21 million last year, €8 million behind the €29 million surplus they generated in 2019.

Income from joint ventures boosted this by €2.7 million last year, leaving Sicon with €23.7 million in profits before tax, against €31.1 million in 2019.

Directors Gary McGann and Gerard Penny note in their report that some group businesses failed to meet targets set at the beginning of the year due to Covid-19 restrictions.

Lockdown

They add that enforced site closures from March 2020 hit Sicon’s building operations in the Republic.

Sisk closed all sites except motorway maintenance work in March last year. Work halted on the upgrade of Pearse Station and residential building in Cherrywood, both in Dublin, as well as on a complex of offices and shops in Galway.

“However, in both the UK and in Europe, almost all of our projects remained open throughout the year, with enhanced social distancing health and safety measures in place to protect Sisk and third-party staff working on these sites,” the directors say.

Mr McGann and Mr Penny say the Irish lockdown effectively deferred revenue from the first to the second six months of 2020, or to 2021.

Business rebounded in the second half, with the group securing new projects. It ended the year with a strong order book, the directors say.

In the Republic, Sisk continued to grow its business, building new homes and for the hi-tech, pharmaceutical, life science, manufacturing and other industries.

The directors point out that the Irish Government once again shut down most building sites from January, with a phased re-opening from April. Construction continued in the UK and Europe.

Turnover in the Republic dipped to €705.7 million last year from almost €728 million in 2019. In the UK, it eased to €520.3 million from €527.3. Sales almost doubled in Europe to €277 million from €140.4 million.

Directors

Sicon paid its 10 directors a total of €3.5 million, including €500,000 in fees and €3 million for other services. Key managers earned a total of €4.2 million.

The group paid shareholders, including members of the Sisk family and several Irish-registered companies, dividends totalling €10 million in 2020, which was unchanged from the previous year.

Sicon ended 2020 with €96.5 million in total equity, more than €11 million ahead of the €85.4 million recorded 12 months earlier.

Mr McGann and Mr Penny say that even in a “worst case” scenario, there is no indication that Government Covid restrictions will have a long-lasting impact on its profitability.