Divisional overviews – Services

Alan Fainman     Bidvest Services

Alan Fainman
Chief executive

Bidvest Services is a large and diverse unit operating in numerous sectors across the South African business environment. While the division’s larger business and contributors performed well, with stellar performances from the Security and Facilities Management (FM) divisions, overall trading profit increased by only 3,0%. This is indicative of the demanding markets in which many of the divisions’ businesses operate.

 

Contribution to
trading profit

26%

Excellent FM result
Strong performances from Protea Coin, Royal Mnandi, BidTrack and Allied services
Corporate travel pressure driving travel diversification

Salient features

  • Excellent results from the FM division, driven by increasing diversification, and securing several new customised solution and integrated bundling deals.
  • In the security services cluster, Protea Coin was the star performer for the second consecutive year.
  • BidAir, driven by airport lounges, delivered a good result.
  • Allied services’ results were excellent across the board.
  • Travel’s services started diversifying largely as a result of a pressured corporate travel market. The acquisition of Cruises International aligned to this strategy.
Driving innovation

As we steadily increase market share and capitalise on new opportunities, we have become more innovative in our marketing and sales strategies. Internal specialists with strong industry knowledge and expertise are working more closely with our clients as we drive customer centricity throughout the division.

We are continually innovating in the way we bundle our products and services. We are enhancing the services we provide, for example, a single service into a new reality where a bundled offering becomes an integrated service. There remains further potential for a total facilities management opportunity, for many of our clients. In the current, low growth climate, we are actively seeking growth from existing clients as well as growing market share.

Various other technological initiatives and innovations are ongoing, such as in the vehicle tracking and travel sectors, this adds value to traditional offerings, and improves the customer experience. We continue to evolve with changing markets to remain competitive and relevant.

The catering sector is growing and we are participating in that evolution through, primarily, corporate catering where we have refocused our efforts and are already seeing good progress.

We are heavily exposed to the corporate travel sector, where additional focus and innovation will be a feature going forward, while opportunities exist in the leisure travel area. We are actively pursuing opportunities and we have secured the right to market and sell cruises in various parts of the world to an enlarged customer base across Africa.

Synergies with other parts of the Bidvest Group are materialising. For example, www.renniestravel.com has been launched. This offering integrates a diverse range of people, products and services to deliver comprehensive travel solutions in a sustainable way.

Sustainable growth

Renewable energy offers exciting opportunities for us, primarily within our laundries where we are innovating in terms of our water usage. We are also working with Bidvest Electrical to introduce an energy generation innovation to significantly reduce emissions.

Our waste management and recycling initiatives are ongoing and offer opportunities for greater supplier development involvement.

In terms of our employment equity levels, we have progressed well and obtained improved ratings at our larger business. However, more needs to be done and work on transformation is progressing.

Going beyond

We have acquired Irish management services group Noonan for R2,7 billion, a significant step in our strategy. The Noonan business model is complementary and will help us improve services, increase our client base, and support further growth. Similarly, we can share our experiences and certain areas of our business model with the Noonan team to enhance the offering going forward. There is certainly scope for Noonan to offer a broader range of services in a self-servicing, bundled way.

Noonan has bolt-on acquisition possibilities that is currently being assessed. The opportunity for growth and further diversification in Noonan’s existing markets, and in other areas, is significant.

Our focus for the future is to continue our aggressive pursuit of market share by delivering and enhancing the offering for our existing and new customers, by diversifying geographically as well as in our product and service offerings. This strategy has seen us already diversifying our travel portfolio, for example.

We will continue our growth strategy, acquiring South African businesses while also positioning ourselves for international growth.

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