January 9, 2024

MSO series: Fortress Joe Walsh talks "Building Something Better"

In case you missed our MSO feature in the January/February issue where we talked to all the major groups we'll be publishing their interviews individually online. This week:

Fortress

Sites: 11

Employees: 270

Type of work: Complex repairs

Established: 2020

No of apprentices: 32

Funding: Privately funded

Sites in: QLD,NSW

Fortress appeared to me to have sprung up out of nowhere. Joe Walsh was director of operations at Gemini and AMA for 10 years and obviously knows a thing or two about running a repair network. When he set out on his own at Sherdley Automotive, the first client he picked up was the hail company Action Smart Group (ASG).

“Hail is a volatile business so we made a plan to put some panel shops in the portfolio. I knew that Peter Butler from Swains was looking to retire and sell so ASG purchased that business in November 2020,” he said. “Another client I was dealing with was Howard McCracken from MSR who had five sites. On your own you can run one to five maximum and then you have to move to the next structure that will set you up for 20 sites. He needed his back office strengthened, ASG had the back office and in April this year the two companies merged and Fortress was created with an initial six sites. So it was two local, family owned, established businesses coming together,” he said. Walsh is now CEO of Fortress.

By December 2021 the group had 11 locations. The focus is on Queensland, although they did pick up a business in Newcastle, NSW. “If we get strategic opportunities interstate we are open to them but the focus will be predominantly South East Queensland and regional Queensland,” he said.

The next stage for Fortress is 15-20 sites, this is likely to be achieved through acquisitions and greenfield opportunities.

The Fortress group has two mantras “Build something better” and “Sustainability” and that includes a focus on creating a place where people like coming to work.  Across the 11 sites there are a super impressive 32 apprentices and seven school-based apprentices. “We’ve forged links with six high schools. We’ve developed the profiles of the type of people we want, we work with the schools’ career teams, and the success is clear to see. We have some of the best apprentices I have seen in 35 years in the industry.

“In three years time when we have 20 sites the goal is that we will never need to recruit externally, succession will come from within. We also have four graduates on our management program which will soon be expanded,” he said.

“It’s been perfect timing because of the over capacity in the market. The population in South East Queensland has boomed and many insurers had capacity issues which we have been able to assist with.

“It has surprised me how slow Australia was to embrace the MSO - that’s what insurers like. I believe there will always be a national entity but national pricing and fixed cost repairs no longer work. Regional groups with closer regional relationships are what we will see develop.”

It’s certainly been a steep growth curve to reach 11 sites in less than a year. “We’re going fast, we’re going hard and we’re doing it all with our own money – which is very challenging,” Walsh said. As well as the directors of ASG and MSR, some of the site managers and support staff have also bought into the group and own around five per cent.

Walsh said the biggest challenge is real estate, which is hard to find in Queensland right now. However, opportunities abound.

“We’ve got lots of opportunities coming and we are aiming for 50 per cent growth over the next 12-18 months. We’ve attracted a lot of good quality people to compliment those already in the business many of whom are mentoring the apprentices, a job they find very rewarding.

“We have the flexibility of a small business but the operational expertise of a national business which gives us a unique position in the industry.”

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