‘It’s madness what the industry goes to work for’… Sisk’s Paul Brown on margins, making the right decisions and working on Man City’s stadium

Like many people recently, Sisk chief executive Paul Brown has been reflecting on a period in construction that historians might one day describe, kindly, as “turbulent”.

“It’s madness what the industry goes to work for,” he admits. “The last two or three years in the UK have been the toughest I’ve experienced. Supply chain resilience and liquidity has been a real challenge.”

His own company turned in a margin of 1.5% last year. He knows it should be more.

“Would I want it to be better? Yes. We’d be aspiring to make 2% as a minimum. There are challenges to that, getting the right blend of contract terms being one.”

Brown became chief executive of the John Sisk Group at the start of 2022, having been chief operating officer for two years. He took over from Steve Bowcott, a former chief operating officer at Kier, who left after six years in the post.

Born in Liverpool 50 years ago, Brown has been at Sisk for 11 years and before that was at Balfour Beatty for nine years, having joined from John Mowlem where he spent a decade.

He left Mowlem in 2006, just as it was being bought by Carillion. “It was a junction,” he says of the timing of his departure. “I got offered a great job at Balfour Beatty – operations director, to look after their civils business in the North.”

He was approached by Irish contractor Sisk, which was set up in Cork 165 years ago, in 2013 with a remit to grow the firm in the UK.

“It was a bit of a [blank] white paper,” he says. “Would you like to come and help us deliver a UK infrastructure and building business?”

In its last set of results filed at Companies House, turnover at the UK business jumped a third to £475m in 2023. But the firm posted increased pre-tax losses of £9.6m – up from £2.5m last time.

In the accounts, Sisk said its numbers were “impacted by adverse results on a small number of loss-making projects and provisions to deal with the remediation costs related [to] a small number of old legacy issues”.

Brown has said the firm is looking to grow income in the UK this year to around £600m.

Sisk employs around 800 people in the UK and is best known for its ongoing work with Quintain building out residential developments in the shadow of Wembley stadium.

The partnership has lasted for more than two decades but arguably its most high-profile job right now is the one to expand Manchester City’s Etihad stadium as well as build a new hotel and fan zone at the ground.

Laing O’Rourke had been looking at the job but talks between it and the club ended amid rumours that the pair could not agree a price.

Sisk, which had already been lined up for the hotel work, ran the rule over it and agreed a deal. To some it might have been a surprise, but the firm has a track record of building major stadiums in its native Ireland, having worked on the Aviva and Croke Park stadiums in Dublin.

We’re very prominent in Ireland, but we’re trying to put roots down in the UK

Of Manchester City, Brown says: “They’re a very professional client, very straightforward. We’ve got a good team on that, a tier 1 supply chain.”

He admits to a few sleepless nights, mindful that there is nothing like a late-running stadium to make national headlines. “If it goes wrong, you’re in the press.”

Work on the stand, which will take capacity up by 8,000 to 62,000, is due to finish in late 2026 before the rest of the project is completed in phased handovers.

Still, Brown says it is unlikely to appear on too many bid lists for other football clubs dreaming of stadium expansion. “It’s not really a stream of work we’re looking at.”

Instead, the firm, which has four businesses in the UK – two building divisions, a civils arm and a rail company – is looking at more tech and pharma work. “We’re very prominent in Ireland [on this] but we’re trying to put roots down in the UK.”

Since the spring, the firm has been working on a £25m deal to extend the Diamond Light Source science facility in Harwell, Oxfordshire, a distinctive silver-ring doughnut structure that houses the UK’s national synchrotron, which uses electrons to produce bright light that enables the study of anything from fossils to viruses.

Over the summer it won a £125m deal to fit out an office and life sciences centre opposite King’s Cross station in London which will be the UK headquarters of global healthcare giant MSD. It is also rumoured to be in line to finish a vaccine plant that was being built on Teesside by collapsed contractor ISG.

Commercial is tough, resi is tough. We’re not interested in a race to the bottom. We’re focused on the bottom line

Sisk’s civils business has been carrying out ferry terminal work for the Isle of Man government in Liverpool while it is doing infrastructure work at the York Central scheme, a huge development being masterminded by Homes England and Network Rail that will turn a stretch of derelict land between the railway station and the National Railway Museum into 2,500 homes and one million square feet of office and retail space.

Sisk has also branched out of its native Ireland to follow overseas investors – known as foreign direct investment – into mainland Europe, mainly in those tech and pharma industries. “What we didn’t do particularly well was follow them to the UK,” Brown admits, adding this is now something he wants to put right.

As well as Quintain, the firm’s long-standing clients include US developer Greystar and Caddick Group-owned Moda Living, both operating in the residential sector.

Brown says Sisk wants to grow its business with existing customers and blue chips such as British Land and Landsec. But he admits: “Commercial is tough, resi is tough. We’re not interested in a race to the bottom. We’re focused on the bottom line.”

He says the group has around 100 ongoing jobs with at least 20 being in the UK. With margins being where they are, there is not much room for error. “You’re always going to have four or five rogue projects, but it’s the skinniness of the [margins on] stuff that’s going OK that can be difficult.”

Clients, he adds, are starting to see it is in no one’s interest to hammer contractors. “Clients want an appropriate level of risk transfer,” he says.

“A lot of clients are sensible about contract terms and we try and align ourselves to those customers. Contracts where you can’t define the risk or measure the risk, it would take some convincing [for us] to bid. We always try and move to a two-stage model.”

Such has been the fragility of the supply chain, battling hyperinflation, Sisk has set up a team of people – a crack squad, if you like – to audit firms looking to work with it on big projects.

This has tended to centre on M&E and facades contractors, the bits of a building where, if things go wrong, the cost of finding replacements can blow project budgets. Brown says it has worked out well so far.

Not only does it give peace of mind to Sisk but it has helped the supply chain too, he adds. “We’ve built much stronger relationships and that goes a long way when you help the supplier.”

In the meantime, Brown says the firm is doubling down on sticking to its knitting. “We’re being more selective in the UK than anywhere else because of the volatility. We’re focusing on bunkering down with the clients we know.”