Bury St Edmunds-based Servest sets sights on European expansion
PUBLISHED: 06:00 02 March 2016 | UPDATED: 09:09 08 March 2016
Facilities management giant Servest has set its sights on Europe after a year of ambitious growth in the UK which saw it snap up a series of smaller rivals.
The EDP Top100 firm, which employs 3,500 people in Norfolk and Suffolk, wants to double its turnover within three years and launch a similar operation across the continent, according to chief executive Rob Legge.
But it also has its eye on expansion at home, with hopes for bolstering its East Anglian base and launching a coffee shop chain to take advantage of the artisan coffee trend.
Mr Legge said: “We are actively looking for something locally and in London. We would like to see that turn into a chain.”
The Bury St Edmunds-based business, part of a larger group based in South Africa, saw turnover grow 12pc to £240m for the year ending September 30, 2015.
It took on more than 1,600 new staff and made two acquisitions during the year, Cambridge-based pest control business Pest Patrol in February 2015 and Bury St Edmunds-based Llewellyn Smith in July.
And it further expanded its catering division in January this year with the purchase of Accuro Catering, part of the London-based Accuro FM Group.
Mr Legge said the hunt for acquisitions would continue in 2016, ranging from landscaping businesses to catering, electrical engineering and pest control.
And he said the business had been working on its European offering for the last year, and was likely to reveal its plans within the next month.
“We would like to be in all of Europe in some shape or form,” he added.
It is part of a plan to grow turnover to £500m within three years through acquisitions and organic growth.
Mr Legge added: “There are a number of other opportunities we are looking at. We are open-minded about anything. As long as it has a good revenue.”
But rather than relying on banks for funding, for the last two years the business has looked to the Canadian Pension Plan for investment.
“Traditional bank funding doesn’t work for us anymore,” said Mr Legge. “There is a surplus of cash in the market and greater opportunities for borrowing in a cash-generating business.”
“Most people would like to get away from banks if they can. Banks are trying to come back into the market because their order books are drying up.
They are realising without lending money to businesses like ours they are going to dry out.”
While international expansion and further work in Ireland are part of the plan, Servest is also looking to move its business in Bury St Edmunds, bringing its three separate sites under one roof.
Its head office staff of 300 is likely to grow to 400 over the next four years, according to Mr Legge.
The company recorded a pre-tax profit of £349,000 for the year to the end of September 2015, down from a profit of £2.3m the year before. But it pointed towards increased finance charges for the year and highlighted EBITDA (earnings before interest, taxes, depreciation, and amortization) of £16.7m, up from £13.4m the year before.
Servest offers a range of facilities management solutions to clients in sectors including retail, leisure, public, commercial, construction, transport and logistics.
Contract wins during the last year include Homebase and Argos owner Home Retail Group and the London
It is 73pc owned by South African-owned Servest Group PTY, which sold a 51pc stake to investment firm
KAGISO Tiso Holdings in June last year.