Badge Constructions is on track to hit $400m in annual turnover after posting an $11.4m profit
ONE of the state’s biggest commercial builders is on track to break through $400 million in annual turnover this year on the back of major projects in the education, hospitality and health sectors.
- Survey reveals SA’s property sector is most confident in the country
- Construction sector to hit $13bn, Master Builders warns of downturn
- Badge Constructions among building firms targeted by fraudsters
- Badge buys Sunshine Coast-based Evans Harch
ONE of the state’s biggest commercial builders is on track to break through $400 million in annual turnover this year on the back of major projects in the education, hospitality and health sectors.
Badge Constructions posted a 49 per cent increase in net profit last financial year, to $11.4 million, supported by a 2.6 per cent increase in revenue to $389.2 million.
Managing director Jim Whiting said the company - which operates nationally from offices in Adelaide, Brisbane, Maroochydore and Perth - had managed to keep a tight rein on costs across its portfolio of national projects.
“Our budget is early 400’s (revenue this financial year) but we're probably focused more on profitability than turnover,” he said.
“Margins are tight and that’s why you’ve got to have good balance sheet. In our game it’s probably more about managing your projects better and shaping up what you do - margins in most cases are there but you’ve got to do everything right.”
While half of Badge’s revenue is generated in South Australia, its biggest current project is a $320 million education PPP in Perth.
The company is building eight new schools as part of a five-year project with the Western Australian Government and joint venture partner Perkins.
And Mr Whiting hopes Badge will be able to draw on that experience as it prepares to lodge an expression of interest in the SA Government’s $261 million PPP to build two birth to Year 12 schools in Munno Para and Aldinga.
The schools are expected to be completed by the end of 2021, in time for the 2022 school year.
“We think we’ve got a good CV, and it’s good government is committing to that - not only the PPP, but they’re also doing the big school at Whyalla and they’re investing quite a bit of money into other schools through the Building Better Schools program,” he said.
“Education is coming back in quite a big way. Schools have for a long period of time probably been the most consistent part of our sector.”
Badge employs more than 250 staff, with half of those based in South Australia. Locally, the company has recently completed work on a $30 million specialist medical centre on North East Rd at Windsor Gardens, and has also kicked off work on a $45 million upgrade of the Port Canal Shopping Centre.
Mr Whiting is heartened by the level of construction activity in South Australia, but says more needs to be done to develop the skills required to meet the growing pipeline.
“There’s a shortage of early trades - concreters and formworkers - and when you add the defence work and the work going on in the civil sector, they all use the same trades,” he said.
“There are plenty of opportunities here in South Australia but the government does need to focus on training through organisations like the Master Builders.”
Mr Whiting also voiced concerns about leadership changes at the South Australian branch of the CFMMEU, saying they threatened to destabilise what had otherwise been a good working relationship between the union and the local construction sector.
“It’s no secret that the most militant state is Victoria, and unfortunately for us we’re the closest to them,” he said.
“Over our 40 years or so we’ve always got along well with the CFMMEU here and there’s not need for the CFMMEU (Victorian branch) to stick their noses in here.”