Thirty Years On

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-By John Boley

The story begins when Robert Pike, having gained significant experience working for the commercial division of AV Jennings, decided that starting his own business was fundamental in moving forward. This led to the establishment of Pike Industries Pty Ltd, which commenced trading on July 1, 1981. In 1988, the company changed its trading name to Pike Constructions Pty Ltd, as it provided a more defined image of the company’s operations.

Robert’s son Phillip took up the story when he spoke recently to Australian Construction Focus. Milestones represent an achievement for any business, he said, “and 30 years just emphasises stability – if you’ve been around that long you are obviously doing something right. Our vision – and particularly mine as my father moves towards the background of the business to some extent – is that the next 30 years will be even better.”

Phillip joined the company in 1995 and together with his father fostered a strong partnership, which has seen the company gain recognition within the construction industry. Growing rapidly, the company took a major step forward in 2007 when the management team procured major plant and equipment along with skilled personnel, to enable the company to perform the majority of its own civil work. Having control of such an integral part of the construction process has not only given Pike Constructions greater control of the project delivery, but a competitive efficiency recognised by clients. Given the success of this investment, the civil operations of the business are set to expand.

“It has been a focus of ours. 2001-10 were big growth years in our company and we made a strategic decision to re-invest those profits back into the business. One area we thought would not only make us more competitive but also expand the role of our people on the ground was to predominantly move into doing a lot of our own civil work, so we purchased trucks, excavators, diggers and all the plant and equipment needed to undertake that role and also we had to increase the staff and get the right people with a civil background.

“We are not specifically targeting civil work but on our projects we can manage and undertake the civil side of a project. It’s usually one of the bigger cost centres in any project and we moved into that area thinking that if we can do that ourselves it gives us a competitive advantage. It also gives us greater control of project delivery.”

On smaller projects, says Phillip, the company does all the civil works, from base preparations through footing excavations, storm water, and a lot of service excavations for subcontractors such as electrical and plumbing and fire. “We are probably not yet in a position to undertake the civil works on a 10-40,000 square metre development but I guess it’s our intention over the next five to ten years is to get to a position where we could undertake that.”

Plant was bought, not leased. “I have always thought strongly that if you can’t afford it, don’t have it. Some things you just can’t go out and buy, it’s a fairly large capital outlay, but we had to get ourselves into a position where we could afford the key pieces of plant and equipment to efficiently do the job.” There is still the occasional need to hire plant or equipment, but “it’s fairly minimal at this stage. I have this thing at the back of my mind that all the plant and equipment we own outright. The company is not burdened by any leases or loans whatever and I think that gives us a solid foundation so if things do go quiet we don’t have those ongoing leases on equipment that’s standing idle. We have that assurance that if things do go quiet you can park it up and you’re not paying for it.

“We do see ourselves as one of the leaders in South Australia in design and construct business in the middle tier where we are involved. I reckon at present it generates around 80-90 per cent of our business and we find we are competitive at it.” Phillip believes this model liberates Pike Constructions from the ‘rat-race’ of hard tendering, although the company is still prepared to pitch in with a competitive tender. “But design and construct is an avenue we prefer to go down; we see both as core areas of our business.”

Phillip says the company was “fairly lucky that when the GFC hit we had some good long term projects.” However, many of those finished late last year or early this year “and we had some quite big projects either put on hold or scrapped altogether – notably a $16 million project down at Glenelg which was meant to get underway mid-February this year but unfortunately none of the banks wanted to come to the party.

“Our client was happy with our pricing, the agent looking after the sale of the apartments was confident we could sell them all, we had over 90 registered buyers for six apartments that were up for sale. But the hitch was that the banks would not put up money unless the client sold all ten apartments and they didn’t want to do that because they wanted to retain four for rental.”

But even though that project fell through, “our client has an existing three-storey building on the site that we are now refurbishing [18 apartments – please see sidebar for more details]. We have picked up some good work in the last 3-4 months including one which is 22,000 square metres of new work out at the Adelaide Produce Markets. We are talking to a previous client about an extension to a car dealership, and we have quite a few jobs sitting in the pipeline that are either awaiting the clients’ decisions or are in the approvals process. So we are fairly busy up to at least March next year, which I think is quite good.

“I think if half the projects currently in the pipeline came off we would need to be putting on new staff. If none of them come off we can still maintain our current status. But I am fairly confident that by the end of this year or early 2012 things will be starting to move on an upward cycle here in South Australia. Not a radical upturn but probably gradual.”

Phillip’s father Robert “did the hard yards”, he reminds us. In the last couple of years he has begun to take a back seat; “he started the business and got it into a position by the time I came on board in 1995 where we had a niche as a small builder. He is still a director in the company but he now has less involvement in the day-to-day running of the business and he’s enjoying a sort of semi-retirement – and that’s something he deserves.

It is fitting, says Phillip, that “we are just about to complete the construction of our new head office and warehouse facility on our anniversary, providing us with a new home for the next 30 years and beyond.”

Home Automation

Call it ‘domotics,’ and you are likely to receive a blank stare, but refer to it as ‘smart home’ or ‘home automation,’ and you will get a nod of acknowledgement. For the past few years, consumers have heard the word ‘smart’ attached to countless products and services, from food and drink to snacks like popcorn and mobile phones, which no one seems to refer to as a ‘cellphone’ anymore. Yet what, exactly, constitutes ‘smart’?

May 29, 2020, 5:18 PM AEST