If The Buildings Sector Slows, PCL Has Oil in the Backyard
...from $230 million. From 2003 to 2008, PCL upgraded the value of its stock from $18.16 to $23.40. The stock is revalued annually by the company and can only be bought or owned by PCL employees or retirees. For 2007, PCL paid its stockholders a dividend of $8.56 a share.
 | "One of Ernie Poole’s rules is ‘Don’t have sidelines." — Paul G. Douglas Canadian Buildings Chief |
But this profitable business came during a period of robust construction markets during which everyone in construction was supposed to be making money. Kiewit also had a good year. For the first nine months of fiscal 2007, Kiewit recorded construction revenue of $4.2 billion, up from $3.5 billion in the same period in 2006, and construction operating income of $331 million, up from $259 million.
Future comparisons may be difficult. Kiewit recently decided to take information about its rich financial performance out of the public realm by tweaking its employee stockholder plan so that the company no longer will have to report to the U.S. Securities and Exchange Commission.
More Winners
 Michael Goodman / ENR PCL pours money into training at new Edmonton center. |
There have been many more winners than problem jobs, but PCL has its problem projects, for sure. Teton Industrial Construction, a PCL unit acquired in 2003, is scheduled to mediate a dispute with a powerplant client in a case where lawsuits have already been filed. And PCL Civil Constructors is seeking $27 million from the owner for work it had to do to fix bridge piers in Tampa, Fla.
When problems do come up, such as Enron’s implosion in 2000 that left PCL with unpaid invoices on a powerplant project, PCL “puts all its resources into fixing the problem,” says Gordon D. Maron, the company’s chief financial officer. PCL was paid every dollar owed.
Strategy Sessions
PCL is pursuing several major strategies. One is to earn six out of every ten dollars in the U.S. rather than Canada, the reverse of what happens now. Another is to expand the firm’s industrial work. Modularization is key. PCL Constructors Inc. has pipe fabrication and module construction facilities in Nisku, near the Edmonton airport. There, PCL builds pipe-rack systems for liquid and gas processing projects.
Poole’s Rules
In 1948, when John and George Poole bought Poole Construction Co. Ltd. from their father, Ernest Poole, he wrote out by hand a list of guidelines that the company displays in its Edmonton headquarters: Employ highest-grade men obtainable. |
Acquisitions also have been crucial. PCL’s first acquisition was in 1995: Monad Industrial Constructors Inc., Edmonton. PCL established its first U.S. industrial operation in 2002 with the purchase of assets of a Bakersfield, Calif., contractor. Soon after, PCL acquired the assets of another industrial contractor to launch PCL Intracon Power Inc. Then, in March 2004, PCL incorporated Melloy Industrial Services, Edmonton, to perform operations and maintenance work in various markets.
PCL has worked for Shell for years and has a long relationship with Syncrude Canada Ltd. The contractor performs engineer-procure-construct power work but partners with engineers. It has joint-ventured with Fluor Corp., Irving Texas, and SNC-Lavalin International Inc., Montreal, mostly on gas plants. Stalenhoef says PCL can’t find enough workers. Grieve adds, “We could probably use another 1,000 people to do work clients want us to do.”
Finding new staff has been vital. PCL is still engaged in an ambitious hiring program that added roughly 800 new salaried staff members in 2006 and 2007. At the same time, PCL built a $13-million training facility in Edmonton that is a...