In McNally Group’s first year of operations, in the 2008-09 financial year, the modular building company turned over $439.
This financial year the family owned and run business will have revenue of more than $40 million.
These numbers display very impressive growth but the quirky nature of the business’ 2008-09 turnover figure is captivating.
Mark McNally, one of four brothers who run the business, explained that before the group started tendering for work, it had some spare stock lying around; the $439 was made from the sale of a single door.
A year after that inaugural sale, Mark and his brothers, Glenn and Rhys, signed their first contract with Apache Energy and now have contracts with the likes of Fortescue Metals Group and Rio Tinto.
The core of the business is in building large, complex and specialised modular buildings, such as kitchens and recreational facilities.
All four McNally boys, including youngest brother Jake, are now on board and come from a lineage of transportable building expertise.
Patriarch Gary started Nomad Modular Building, led it to success and sold it in 2005, well before it was wound up by parent company Nomad Building Solutions last month.
Nomad Building Solutions said a lack of leadership and poor operational management within the business had led to its unravelling – a far cry from what was happening at McNally Group.
Three years after the family left the Nomad business at the beginning of the GFC in 2008, the boys saw an opportunity in the market and Gary joined them to help direct the new business.
“Everything backed right off, people were getting laid off and there were good people out there to work with; we thought it wasn’t a bad time at the bottom of the cycle for us to step in, get everything in order, get some good people and start this business,” Mark said.
They had been watching the market and recognised that many businesses were growing their order books too quickly and to the detriment of quality.
With that in mind, McNally Group’s core principle was to keep within the business’ capacity to ensure projects met time and quality standards.
That meant not taking on too much work, too quickly and not growing their staff base too big, too quickly in order to keep quality standards up, deadlines smooth and the order book full.
“We put our name on this company and we want to stay honest with our clients,” Mark said. “We saw what could go wrong and said we never want to do that and, when our clients come to us, we want to give them what they ask for.”
Mark said that, at times, the model could be frustrating, particularly when clients chose another company because it promised shorter time frames.
“It can be tempting (to take on more work) but, with four brothers in the business, we can all keep each other in line if one of us wants to bite off more than we can chew,” he said.
Initially, the business had a staff of three and outsourced a lot of work like design in order to avoid overheads.
Now McNally Group has a permanent staff of 21 and a comprehensive in-house design team, more than 100 subcontractors and three factories in Henderson.
Heavy investment in safety has been key to getting large contracts with key clients like FMG and Rio Tinto.
“It was really interesting for us to see the cost involved in being safe but you really can’t put a price on it,” Mark said.
“FMG was an amazing client for us, they were the ones that really got us started with their Castle camp and doing a high volume.
“It let us prove we can produce a high-quality product at high output.
“The key to growth has been to understand what our clients wanted, their requirements. Once you understand that, be very thorough with your specifications.
“The building of the units isn’t the hard part, it is understanding everything, making sure you have allowed for everything, making sure you can get everything in there and then the documentation.”
Future growth plans for McNally Group include diversifying the product range to market residential modular designs to metropolitan and regional areas, extending the client base to have more junior miners on the books and growing its on-site installation capabilities for its existing products.
