Hutchies, BMD and FKG punch above their weight in top Qld private companies list

Family-run construction companies generating billions of dollars in revenue continue to punch above their weight in the ranks of Queensland’s largest private companies. | See the list.

Queensland’s privately-owned construction companies continue to punch above their weight on the national stage despite some of the toughest industry conditions seen in a generation.

Hutchinson Builders, FKG Group and BMD Group – all included on this year’s IBISWorld list of the top 500 private companies – remain family businesses that have ridden cycles of booms and busts in a sector known for cutthroat competition.

Hutchinson, with annual revenue of $2.75bn this year, was the second-largest private company in Queensland behind meat processor Teys Australia with turnover of $3.09bn. BMD is the fourth-largest private company in the state, with revenue of more than $2bn and just behind motoring body RACQ with turnover of $2.14bn.

Hutchinson Builders chairman Scott Hutchinson does not downplay the challenges in the industry. Mr Hutchinson said wafer-thin profit margins, rising costs of labour and materials on fixed-price contracts had caught out many building company.

Mr Hutchinson has urged builders to work together to survive the increasingly tough times facing the sector. More than ever builders needed “genuine working relationships” with clients and subbies to continue in business.

“Builders are struggling to keep up with supply, trade and material shortages and costs exacerbated by the impact of Covid-19,” Mr Hutchinson said.

Scott Hutchinson

“Ironically in boom times many builders slip into negative profit territory as the rising cost of labour, products and services on fixed-price contracts present a real test of builders’ management skills in which some fail.”

Mr Hutchinson said Hutchies was surviving because of good cash reserves, a long-serving team and a loyal repeat business client base covering a broad spectrum of projects.

“In recent years, financiers demanded that developers looked to builders with a sound balance sheet and subbies looked to builders who pay on times and who they trust to be there at the end of a project. Hutchies has benefited from this trend,” said Mr Hutchinson.

Trust has been behind the growth of Toowoomba-based FKG Group, founded by carpenter Francis Kevin Gardner more than half a century ago, and that has expanded to a $800m building empire with 800 employees.

Francis Gardner’s grandson Nick Gardner, who is now managing director of the company, said FKG has been successful because it has continued to reinvent itself and remain flexible.

“We have experienced a lot of low points, but we always had the ability to turn things around,” said Mr Gardner, whose father Gary remains involved as executive chairman. He said the advantages of remaining a private company outweighed the disadvantages.

“It gives us the flexibility to pursue opportunities when they arise,” Mr Gardner said. “The biggest difference with us compared with a listed company is that we have no pressure from shareholders to do things that may not make much sense.”

He said Queensland had a lot of things going for it and there remained “a real entrepreneurial streak” in the state. A total of 79 Queensland private companies are included in the IBISWorld top 500 list, including Motorama Group ($828m), Hyne Timber ($695m), and Sunpork ($594m).

Nick Gardner, managing director of FKG Group.

BMD Group, which soon plans to move into a new five-storey HQ at Wynnum that also will feature retail space and accommodate more than 300 workers, is also banking on growth.

BMD is currently located at the Port of Brisbane but has outgrown that space amid a growing order book of projects. BMD chief executive Scott Power took over the reins in 2020 of the $2bn company founded by his father Mick more than 40 years ago.

“I grew up driving around construction workplaces on the weekend with my dad,” said Mr Power. “I always wanted to be my dad but not everyone gets the opportunity.”

Mr Power is now positioning BMD for the next stage of its growth, riding a post-Covid infrastructure boom and expanding further into Asia.

Mr Power said his father never envisaged BMD could become one of the country’s largest privately-owned construction companies, employing 2000 people and working on mega projects such as Brisbane’s Legacy Way.

Mr Power said his father always had the ability to seize competitive opportunities. Mick Power was working for construction firm Leighton on the Gold Coast in 1979 when the construction giant decided to cut back on the amount of work it was doing on the then booming tourist strip. “Leighton decided they were not going to do any contracts under $30,000,” said Mr Power. “My dad decided then to set up his own business and take on that work. I don’t think dad had the idea the company would become so big but he always backed himself and has been prepared to back his people.”

Mr Power said his father remains chairman of BMD Group but the day-to-day running of the business is now in the hands of the younger generation.

BMD Group chief executive Scott Power.