** Original Article From Business News**
It was a little over a decade ago when Jason Nuttman and Paul McKiernan went into business together with the launch of Site Sentry.
They have achieved rapid growth since then, adding a second business in Fortawall and expanding nationally.
With the prospect of continued national growth and increasing staff numbers, they need to ensure the formula that has worked well to date can be sustained.
They anticipate sales of $22 million this financial year and much more the year after.
“With the east coast expansion, group turnover is forecast to be $27 million next financial year,” Mr McKiernan said. “We never dreamed of that when we started.”
Site Sentry, which hires out solar-powered security towers, has averaged 20 per cent year-on-year growth in Western Australia. The business has about 1,000 assets currently on hire. The founders own two buildings in Bibra Lake and have a $6 million facility under construction in Queensland.
“That will allow us to manufacture and grow the business on the east coast,” Mr McKiernan said.
Fortawall, which introduced a new type of temporary fencing to the market three years ago, has added to the growth. There are about 45 kilometres of Fortawall fencing on hire across Australia.
“We’d like to see 100 kilometres in the next 12 months,” Mr Nuttman said.
Both businesses evolved out of issues the two founders observed first-hand. Mr McKiernan’s family was in the building industry and saw issues with theft and damage on building sites. The business partners set out to develop a product that would meet the needs of industry.
Their security towers are anchored by heavy concrete blocks, use solar power and feature CCTV cameras with an automated alarm system, detecting intruders and deploying LED lights, sirens, strobes and a voice challenge.
Customers include major builders Multiplex, ADCO, Pact and Perkins, but extend across defence, mining, agriculture and government. Some mining companies, for instance, use the camera system and associated Al to monitor the condition of their ore rail cars. The system is also used to monitor truck movements on remote haul roads, to help with workplace safety management.
Mr McKiernan said constantly investing in the business was a critical factor. “The space we are in is tech and it changes constantly, so we’ve been really proactive in upgrading our technology,” he said. “We’ve done $3 million of tech upgrades and software updates in the past 12 months to make sure we maintain ourselves as the industry-leading provider.”
Mr Nuttman said competitors mostly used cheaper, Chinese cameras with lesser capabilities. “We made a conscious decision from the start that we would spend the money getting a reliable camera out of Europe because we felt it aligned with our premium offering,” he said.
A US government decision to ban Chinese cameras from government facilities has flowed through to the local market, with many Australian government agencies requiring the US-based ‘NDAA’ compliance standard.
“That has excluded a lot of these copycat products, while we invested the money and are now front and centre to get these jobs,” Mr Nuttman said. “We have the NDAA compliance and that has really helped us.”
Mr Nuttman told Business News Site Sentry was not a technology developer but had the capacity to install world’s-best technology on its product. “We can embed the latest software, including Al, to meet clients’ needs,” he said. “We can host anything within the camera because, essentially, that device is an eye. You just tell it what to look for and it will do it. That’s how powerful the technology is, really it’s up to the client.”
Second business
Mr Nuttman said Fortawall was launched three years ago after the pair spotted a new opportunity. “Fortawall came about because we were on site doing jobs for Site Sentry and we saw this huge gap in the market because the temporary fencing was being pushed over, people were tripping over. Every day we saw issues with this product,” he said. “It’s really filled a gap between temporary fencing and hoarding. It was either cheap, basic stuff, or spend a fortune on hoarding.”
The growth of the Fortawall business has been helped by an east coast licensing agreement with US company United Rentals, a major global player in equipment rentals. The United deal included a commitment by that company to order at least $10 million of product over the first five years.
The two founders recently visited New Zealand with United to help break into that market. The partnership has not been without its challenges, however. United has made several acquisitions in Australia, including Orange Hire and Shore Hire. That has led to a big focus on integrating those businesses. Another challenge is that Fortawall is part of a large portfolio of products.
“We need to ensure Fortawall is top-of-mind for the United Rentals sales teams,” Mr Nuttman said.
Premium focus
Another challenge for the business has been getting buy-in for products with premium pricing.
“A challenge for us, and one we enjoy, is when you have a premium product against lots of cheaper knock-offs,” Mr Nuttman said. “That means you have to be very good at business development, work out the customers’ needs and wants.”
One point of difference is the focus on local content in the manufacturing process. Fortawall, for instance, is manufactured in Henderson using designs and moulds that were locally developed. Similarly, Site Sentry uses local suppliers and fabricators. This includes solar panels bought from an Australian manufacturer, even though they come at a higher price than imported products.
“Across both businesses, local content is really important for us,” Mr McKiernan said. “Everything we can buy and manufacture locally, we do. It really resonates with our clients, that everything is sourced locally.”
Using local manufacturers also helps with quality control The Fortawall units, for instance, are injected with UV stabilisers designed for the harsh Australian climate.
“We need it to last in the hot sun of the Pilbara,” Mr Nuttman said.
Funding
One challenge the founders do not currently have to worry about is securing funding. They have more offers than they need, which is a big change from when the business started.
“We could not get funding in the early days so we had to self-fund,” Mr McKiernan said. “We did not take any money out of the business for the first seven years.”
The two founders kept their day jobs for several years to help pay the bills. Brokers and corporate advisers have started pitching the idea of an ASX float to bring in fresh capital, but that was not needed.
“We have built the business without taking any debt or selling any shares,” Mr McKiernan told Business News. “We don’t need to take on capital. We can self-fund the business, because we did that hard time at the beginning.”
Mr Nuttman said they continued to run a very tight business, which meant the top-line revenue growth flowed through to healthy bottom-line profits.
Expansion
The focus is on growth in new markets. McKiernan and Nuttman believe their success in WA should be matched in other markets.
“With Site Sentry, we believe we have 60 per cent of the WA market in our space,” Mr McKiernan said. “That’s why we are quite confident with our expansion over east. We know our systems, our method, our product is the industry leader. That has been proven over here. We want to take the same methods, the same processes, the same technology over to the east coast. That’s our biggest focus for the next 12 months; expanding the east coast business.”
As sales opportunities expand, they need to ensure the capabilities of the business expand accordingly.
“If we say we will do something, we do it,” Mr Nuttman said. “We want to mirror that across all the markets, and that’s quite a challenge as you grow; making sure people working remotely for you have those values. That’s why it’s important for us to be travelling, going to new sites and spending time with our staff.”
Another big focus is on staff inductions.
“All the staff get inducted over here, they spend two to three weeks here,” Mr Nuttman said. “They see how our operations run here.”
The founders plan to fly all staff to Perth for their Christmas party, to help develop the culture and teamwork.