Jaxon targets growth at 60 years
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Jaxon has re-emerged as a major contractor in the Perth market with big plans for the near term after six decades in the business.
Family-owned construction company Jaxon isn’t resting on its laurels as it celebrates its 60th anniversary, instead developing an ambitious plan to double its business in the next five years.
Chief executive David Dodds, who has overseen Jaxon since he joined the group in 2012, said pursuing bigger contracts and continuing to broaden its base from the apartment sector were the key planks to its growth strategy.
Jaxon, which was bought by Doric in 2005 and demerged in 2011, is currently ranked 11th largest construction company in Western Australia on the BNiQ Search Engine.
Construction veteran Harry Xydas owns the demerged businesses through holding company Doric Jaxon Consolidated Group.
Mr Dodds joined soon after the demerger, which he said allowed the two companies to operate independently.
“There were also opportunities Doric was looking to get into in the north-west, so it complemented both businesses.
“The businesses demerged, and that gave us both a unique identity … it has worked out very well.”
More recently, the two businesses have become more closely aligned and share back-of-house services, with combined HR, payroll, IT and finance functions.
“When I joined the business we had a very strong focus on the north-west (of WA), servicing clients like BHP and Fortescue very successfully, but that always had an expiration date to it and we identified fairly quickly we needed to get a foothold back in the Perth market,” Mr Dodds said.
“We targeted a couple of key projects and key clients and managed to do that.”
Australand, now Frasers Property Australia, was one of the first major clients to commit with Jaxon. The first project completed for Australand was the Aspect Apartments in East Perth. At $12 million, it was not a huge project but was a good size for Jaxon at the time and, importantly, built confidence in Jaxon’s ability to deliver.
More recently, Jaxon has won contracts in the high-rise apartment market, such as Pinnacle apartments in South Perth (21 storeys) and Cirque in Mount Pleasant, which has 23 levels.
The Pinnacle contract is for $65 million, and Cirque $56 million.
The company is also building the 250-room Mantra Hotel at 900 Hay Street, currently due for completion in August next year, and recently completed Forrest Hall, which provides accommodation for visiting academics to the University of Western Australia.
Jaxon’s target sectors – apartments, multi-unit housing, aged care, hotels and student accommodation – are largely predicated on sales for the developer to give the green light. With banks tightening lending practices for residential buyers, this has caused frustration within the construction sector, but Mr Dodds still sees plenty of opportunity in the Perth market and is confident Jaxon will hit its growth targets by focusing on larger projects and reducing its reliance on apartment construction.
“If I look back three years ago we were probably doing 80 per cent apartments and we have reduced that to 50 per cent,” Mr Dodds said.
“But our focus is on growing our average project values and we have a strategy in place to target the $50 million to $100 million project value.
“We have done a few of them now and we are well suited to step into that space. I think a lot of our competitors have stagnated in recent years and have not grabbed the opportunity.
“We have always had the plan we want to grow. We want to double the size of our business in five years – we have done it in the last five years and we will be looking to do it in the next five years.”
Jaxon revenue was $90 million when Mr Dodds joined in 2012 and grew as high as $180 million in FY2017 before the group recorded $150 million last financial year. The budget for the current financial year is $185 million.
“It really is a milestone in WA,” he said.
“It’s a challenging industry and managing your business prudently and efficiently is paramount to being successful. And growing the business in these times is equally rewarding.”