Divisional reports

Services

Sustainability

48% of employees are women

R171m spend on training, learnerships and bursaries

Regrettably two Protea Coin security guards lost their lives

Electricity generated from renewable resources trebled

“	The division delivered an exceptional result in a price sensitive, stagnant market.”
Alan Fainman, chief executive

Salient features

Review of the year

The division delivered an exceptional result in a price sensitive, stagnant market.

The majority of the division’s businesses delivered good growth with excellent contributions from Noonan, which continues to exceed expectations, Bidvest Facilities Management (FM) and Protea Coin. For the South African operations, this performance is laudable, considering the severely constrained economic environment, margin pressures, the impact of abnormally high fuel costs as well as legislated changes to the labour broking model, which all had an impact on the results.

Three acquisitions made over the year, namely Aquazania, ClickOn and United Drone Services (UDS) are performing according to plan and have already contributed positively to profits. Cost containment abilities across businesses were exceptional. New business development remains a key imperative and there was good success over the year with major contracts awarded in key business areas.

The International Cluster, comprising Noonan, continues to exceed expectations. A strong margin improvement was delivered, and the overall result from the businesses operating in Ireland was exceptionally good.

The FM Cluster, which is the division’s largest contributor, also delivered good results. The facilities management services and Steiner performed remarkably well, and the overall return on funds was extraordinary. The Prestige business improved dramatically in the second half of the year, but Bidvest Catering’s profits were lower year-on-year.

Steiner is introducing a sales application and an on-line contract signing and route optimisation system, all at various stages of rollout. Prestige is rolling out off-site monitoring of cleaners and Bidvest FM is developing a facility management App for users that link all services and requests.

Operating and financial results within the Security and Aviation Services cluster were very pleasing. Protea Coin did well with its numerous specialised units contributing positively. The integration and possibilities with the new UDS business are exciting. BidTrack performed well, but Vericon was impacted negatively following contract losses. GPT’s trading profit was up and management continues to closely manage margins, while ClickOn remains in line with expectations. BidAir performed satisfactorily and grew profits with Services, Lounges and Cargo all contributing positively.

The Travel Services Cluster was well down on last year, mainly due to lower transaction volumes across most brands. While revenues were higher, and costs we were fairly well maintained, overall margins and profitability are constrained as consumer and corporate spending pressures escalated over the year. A number of strategic interventions, including an improved technology and digital base, are underway to counter this decline and green-shoots are already evident in certain businesses.

The Allied Services Cluster delivered good growth in trading profit, even excluding the recently acquired Aquazania water supply business. With Aquazania, trading profit growth doubled. Each of the businesses within this cluster, which include Puréau, Execuflora, Masterguard, Steripic, Hotel Amenities, King Pie and Top Turf, among others, delivered bottom line growth and excellent cash flow, good asset management and overall returns.

Looking forward

Noonan is planning for continued growth, specifi cally, with the imminent acquisition of a cleaning business. Although the FM, Security and Aviation, and Allied Services clusters will be affected by the current market conditions, all are expected to maintain the momentum. Travel is forecasting another diffi cult year, but certain initiatives underway will offset the negative results. Various opportunities, in South Africa and internationally, are being assessed and certain possibilities are being advanced. A more economically stable South Africa, with a less volatile currency, and a solution to Brexit will serve this division exceptionally well.