Close to 40 years ago, proprietor David Hicks was asked to assist a construction company in North Sydney after one of the sub-contractors the company was using went broke part way through the building process.
There were several issues to deal with including what happened to the employees and how the job would be completed.
This established a workout program in which the firm still undertakes as the need arises but in a more proactive nature, a construction review service that David Hicks & Co has made its own on the Eastern Seaboard. The firm’s Construction Review Service is used by the majority of the country’s Tier 1 builders as well as by banks and other regulatory bodies. “Many projects can take years to complete and a builder wants comfort that any of the sub-contractors they use will still be around in two or three years,” Director Peter Watson says.
“Construction can be a volatile business at the best of times. Things are continually changing. In Sydney where the market is strong but sub-contractors seek to expand their businesses – margins tighten. And that can be just one of the issues.”
Watson said the reviews were primarily conducted at the contractors or sub-contractors’ premises. “The assessment usually takes around three hours of the sub-contractors’ time at their premises. We meet a financial controller or similar and look at such things as the financial statements, cashflow, wages, insurances and statutory entitlements, etc. We then assist by making a recommendation which is supported by many years of experience with the relevant trade within the construction industry.”
Watson said the standard chartered accounting firm would have little exposure to the workings of the construction industry.
He said that in the past 23 years since he had been at David Hicks & Co, we have a proud success rate given the “thousands and thousands” we have reviewed with our construction review process. “Our process is very clinical and thorough. If we find there is something we don’t like we recommend various provisions are put in place in the contract to protect the head contractor.
“We have a great name in the industry and builders know that if we give a company the tick of approval that the job will get done. That provides peace of mind for them.”
PETER WATSON, DIRECTOR, DAVID HICKS & CO.
Watson said that although the company is based in New South Wales, about 40 per cent of its work is done outside the state.
Watson said because the company had done so many reviews that it knew the industries that builders relied on such as tilers, bricklayers, plasterers, plumbers etc better than most.
“Our knowledge of the construction industry is supported by our market knowledge on the contractor and subcontractor industry – and that is something that comes over time and having done thousands of reviews.” This industry specific knowledge branches over into providing business advisory, tax and compliance to many of these contractor and sub-contractors.