PHS delivered a result that exceeded pre-acquisition expectations. Noonan produced a solid result in underlying currency, augmented – for only part of the second six months of the financial year – by the inclusion of its recent acquisitions:
- Axis, a UK-based security and cleaning services provider;
- Cordant, a leading UK cleaning and security company;
- Amber, a specialist cleaning company; and
- Interact, a provider of technical services.
Despite the COVID-19 impact on South African businesses, particularly as it pertains to reduced office occupancy in mainly the professional services sector, the division’s facilities management services continued to deliver significant growth, and produced another good financial result.
The Security & Aviation cluster performed strongly across virtually all its businesses, with stand-out performances from BidTrack, Protea Coin, Bidair Cargo and GPT.
Within the Allied cluster, which includes products and services to corporate offices and hotels, trading profit was slightly down, but the strategic changes made over the last year as well as system and customer integrations, are starting to show real benefits.
The Travel Services cluster remained under pressure due to pandemic restrictions, but some indication of stronger domestic travel was evident in the last quarter. The return of international travel is a prerequisite for enhanced profitability. The significant investments in technology and the rationalisation of back-office function are expected to yield benefit when demand returns.
Across the division, some businesses benefited from COVID-related work, but operations were tempered by suspended customer contracts. The reversal of both these aspects are expected to be broadly neutral going forward.
This division successfully disposed of BidAir Services to a Black consortium, with existing management becoming shareholders in this new consortium.
Looking forward
Numerous cost management and efficiency initiatives are underway within the division, which are expected to enhance profitability.
The sales teams’ focus has been strengthened and better aligned to increase the pipeline and new client conversion rate. There is also a process underway to convert non-contractual sales to contractual revenue.
Facilities management service expertise in niche sectors such as food and ICT is being augmented, and the continued integration of existing soft and hard service clients is being pursued.
There is also a process underway to extract synergies and value from the recent Noonan acquisitions, and management is continuing to pursue hygiene opportunities that PHS have identified both preand post-COVID. Successful strategic interventions with Bidvest Steiner in South Africa continues.
