Colin Glover: SIS Systémy now a CZK 1bn construction company

Robert McLean

#cee, #proptech, #development a #architecture

Stavební Interiérové Systémy s.r.o. is a thing of the past, says managing director Colin Glover. As of July, the company’s name is SIS Systémy a.s. It’s just a name change, but it reflects both how the company has evolved, and how the owners envision its growth.

First of all, the word “Interiérové” has been removed, since the company doesn’t just do interior installations anymore. Ultimately, though, the “a.s.” at the end of the name is the more consequential change, since it means that the company is now a joint stock company, rather than a limited liability company. This will enable the larger investors SIS is now entering into discussions with to adhere to their corporate compliance guidelines. “We’re a strong, open, transparent company so they don’t need to worry about our financial credibility and stability. We’re able to work with them as partners on major projects.”

Since buying the LLC in 2015, Glover has grown SIS from a CZK 30 million installation business into a full-fledged construction company with around CZK 1 billion in turnover. Six of the seven people that worked for the company when Glover bought it out are still employees. In the meantime, however, SIS’s staff has swelled to 75, with separate operations to handle the Moravian market.

That sort of expansion wasn’t necessarily envisioned from the start, admits Glover. He says the company’s growth ultimately was due to a combination of efficient management with a booming construction market. “It’s been busy the last six years and it’s still busy today.” So busy, in fact, that in order to keep up with orders SIS Systemy was able to make its first acquisition: Kovovrany sro (a metalworking business).

“It’s something we’ve always been missing from our portfolio and on many projects there’s always supporting steel construction required.” The expansion was therefore a result of difficulties to bid and realize projects because they simply didn’t have the capacity. “We were at the mercy of these suppliers and it was blocking us. But in interiors [still the biggest part of the business] people don’t want to hear excuses. They just want to hear the job’s finished. We try to have as much in our own control as possible and be as unreliant on third party suppliers as possible. This makes us quite unique with currently 12 separate divisions within SIS ranging from HVAC to Electrical to Glass Partitions and Doors.”

If competing for large construction contracts is going to require new acquisitions, they won’t come cheap. “There’s no distress at present out there,” says Glover. “Companies are busy, and therefore you’re not getting sensible discussions about pricing, which is the same as in the real estate market generally.” But he agrees that the current pace of the market can’t last forever in this economic climate. “We want to be seen to be stronger in this coming recession than everybody else.”

For now, the challenge is to figure out how to arrive at prices for projects at a time when inflation for certain items is impossible to nail down. Specialized glass, for example, can’t be bought ahead of time and stored, so it’s tough to agree on a price a year before it’s needed. “If they want a lump sum price, then we have no option but to make a prediction which the investor isn’t going to like if I add 60% onto the current price based on current trends.” The most sensible solution he’s agreed to with some clients is to agree on a list of items that will be bought when needed on an open-book basis.” It’s not possible to do that for everything, he claims, because it results in too much chaos. “If all parties work together as partners then all the risks can be managed.”

 

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