Divisional overviews
Services
Alan Fainman
Chief executive
clients to have a single point
of contact for better delivery
generation was
pleasing
grew by 26.3%
delivered an
excellent result
Salient features
- This division, which offers bundled services, delivered a commendable result over the past year.
- The acquisition of UK-based Noonan and USS, which were finalised in the first half of this financial year, performed in line with expectations and, very pleasingly, delivered good volumes of new business that were secured in the last quarter.
- The South African businesses delivered an increase of 8.3% in trading profit which is remarkable considering the constrained market conditions in which it operates. The division's cash-generation was pleasing, and funds employed were well managed.
- Several new bundled contracts won by Facilities Management in a very competitive market. Steiner, again, produced very acceptable results.
- Allied Services had a strong year, specifically the contributions from the larger businesses, Pureau and Execuflora.
- Although Security Services delivered a solid result, the margin pressures, particularly in guarding and mining, seems to have become the new normal. The division's response for next year has been an enhanced focus on expenses and service innovation.
- The challenging consumer market is very evident in the travel cluster, which had another tough year of lower rebate rates driven by reduced demand. Numerous, innovative, technological systems are being rolled-out to drive efficiencies and enhance flexibility.
- Within the Industrial Services unit, BidAir's lounges and cargo activities delivered very strong results. The project-based industrial cleaning and related maintenance business, TMS, experienced a poor year and the potential sale of the business is being negotiated.
Strategic focusThe Noonan and USS businesses have refreshed their respective structures and have bedded-down well into the Bidvest way of doing business. Exciting synergies are evident, and there are significant opportunities for growth in this market, specifically in the core offerings of cleaning and security. Acquisitions are therefore being considered in the UK, while in South Africa, opportunities are also being assessed and due diligence processes are underway for possible bolt-on businesses. Large new contracts were secured over the last year, and the division is aligning to continue this growth. Additionally, efficiencies, processes and innovative systems are also being implemented to continue extracting better margins to enhance future profitability. |
TransformationThe majority of the division's businesses have achieved a Level 1 or Level 2 B-BBEE status. The hard work and dedication into transformation over the years has certainly delivered the result. The best possible credentials are essential for this division's businesses as they operate in a space that is extremely competitive. The appointment of black executive and management is satisfactory while improvements are also being made at other top management levels. Skills development in this division is exceptional with the total spend on black people amounting to R308 million for the year. Enterprise and Supplier development, which includes procurement, is again at good levels as with socio-economic development. |
OutlookIt is fully expected that the market will remain challenged, pedestrian growth is being anticipated and management is, therefore, planning for this eventuality. However, this division's diversity is its strength and it will continue the strategy of scaling-up and consolidating its wide range of businesses to ensure continued focus and growth. This is done by enhancing the delivery of product and service value with better options to customers. Some bolt-on acquisitions are being planned, while larger, more transformational-type opportunities will, at this stage, be considered internationally. |
Our story
Still healthy after all these years
When Steiner Services was purchased in 1991 by Bidvest for approximately R90 million, the business consisted of larger branches in Alrode, Durban and Cape Town, with smaller branches in Port Elizabeth, Ermelo, Potchefstroom and Bloemfontein.
Bidvest Laundry Group launders in excess of 50 tons of work a day and generate revenue in excess of R600 million
Bidvest Steiner employs 1 650 people operating out of 30 branches
G Fox employs in excess of 2 000 people
Today G Fox's revenue is in excess of R750 million
Steiner was made up of laundry services (mostly for roller towels and nappy services), trading sales (toilet paper, basic janitorial chemicals) and some hygiene rental (primarily sanitary bin services and soap dispensers). The nappy service was very big in Johannesburg as there were no disposable nappies in those days. Nappies were made of cloth and the dirty ones were collected from households, laundered and returned.
Post the Bidvest acquisition Lindsay Ralphs became the CEO of Steiner and set about splitting the business into its core functions. First Garment Rental (FGR) was purchased from the Fainman family and Boston Launders was bought from the banks to form the only national laundry and garment rental business in South Africa, employing in excess of 3 500 people.
Today, the Bidvest Laundry Group launders in excess of 50 tons of work a day and has a revenue in excess of R600 million. The business processes hotel and healthcare linen, guest laundry, roller towels, mats and of course workwear for every industry in South Africa.
In line with the Group's vision, the trading business was split, and Bidvest acquired Commercial Sundries, a large distributor of paper products throughout South Africa that had been bought out of liquidation. Commercial Sundries eventually merged with G Fox which was acquired after the tragic death of Gerald Fox in 2003. Today G Fox is national, employs in excess of 2 000 people (including over 800 in Swaziland) manufacturing workwear with revenue in excess of R750 million.
The hygiene businesses were split away from the other two businesses and eight branches were opened countrywide, employing about 400 people. Today Bidvest Steiner employs 1 650 South Africans operating out of 30 branches in South Africa as well as Botswana, Swaziland and Lesotho. Like G Fox and FGR they are now the leaders in their industry. All growth has been organic – only one small hygiene business was acquired which added less than 2% to profits.
Steiner's range of equipment and services includes hundreds of products and services covering pest control, fumigation and hygiene services and all types of paper dispensers and related products.
The vision of buying Steiner and then splitting it into its core businesses resulted in the creation of Bidserv, which is today's Bidvest Services – the largest division within Bidvest. The recent acquisition of Noonan in Ireland and USS in the UK is just another step on the 'Steiner path' that Bidvest started in 1991.
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