Posted on Thursday 14 October 2010 byUlster Business
Belfast’s Resource Group believes impending cutbacks in the public sector will create opportunities for outsourcing companies and is looking to niche markets to provide growth
Dave Seaton admits he’s not the “gregarious salesman” type.
But he says there are already plenty of good salesmen at Resource, the Belfast-based security and support services company of which he has been chief executive for almost a year.
A non-nonsense Scot, Seaton was previously chief executive of US-based protective security contractor Armour Group and had also spent 12 years with oil and gas services giant Schlumberger before joining Resource.
He arrived at a time when the company had grown quickly and after bolting its various acquisitions together its board had begun to appoint senior managers with experience of running bigger companies.
“What this business lacked was a bit of larger business discipline and structure,” Seaton told Ulster Business. “What I bring is a significant amount of commercial nous, hopefully some financial skills and a broad understanding of dealing with investors, bankers and senior clients.”
Resource was founded in 2006 by Terence Brannigan and Paul Bean after a management buy-in of Maybin Support Services. Four acquisitions followed in the space of 18 months and Seaton says that sort of rapid expansion meant the company was always likely to experience a few “growing pains” as it integrated operations.
While the company’s cash position remains strong it has made an operating loss for the last three years due to debt repayments, and has been working to restructure its balance sheet.
“The way this business was set up was that it was primarily debt funded. That is not a good model in today’s day and age,” says Seaton.
“When the business was set up with the acquisitions in 2006 and 2007 it may well have been an acceptable structure, but it is certainly not an acceptable structure now. We are well down the road of doing a restructure of that balance sheet that will give us a very strong position to grow the business in the manner we want to.”
While it continues to compete with large players such as Interserve, OCS or G4S for standard security, cleaning, car park management and grounds maintenance contracts – markets in which it has several big contracts in Northern Ireland – the company is now focused on finding niche markets where it can be a market leader.
These include infection control in hospitals, bundled services such as security, maintenance and cleaning in colleges and universities, and government sector outsourcing. Its work to improve hygiene standards at Beaumont Hospital in Dublin saw the hospital’s infection control rating move from the bottom five to the top three of local rankings.
“We’re certainly not going to walk away from broader services but where we see the growth is in establishing a foothold in these niche services,” says Seaton.
“We realise that we can’t be the biggest and we certainly can’t compete with the big boys purely on price. Therefore what we are focusing on is key sectors of the market where you can command a slightly better margin because you are providing a higher level of skilled service,” the Resource boss adds.
While many private sector firms are panicking about the impact public sector cutbacks will have on them, Seaton believes the new cost-sensitive environment will create opportunities for outsourcing companies such as Resource.
He notes that the company already has several significant contracts with public sector organisations in Northern Ireland, including the PSNI, for whom it provides support and security services that allow warrant carrying police officers to focus on police work.
“I don’t think there is a public body that is not going to be touched by the trimming if not massacring of their budget,” says Seaton. “That to us is a very real opportunity to grow the business, modestly here in Northern Ireland but certainly over in Great Britain.”
Seaton, who splits his time between Resource’s offices in Bolton, London, Belfast and Dublin, notes that because of Maybin’s established position Resource’s business is currently split 60/40 between Ireland and Great Britain, with 5,000 of its 8,000 employees in Northern Ireland and the Republic.
He wants to balance that to 50/50 and believes particular growth opportunities still exist in London and the South East of England.
“It is a massive opportunity and up until this year we didn’t have an office in London. We had a strong presence here, a pretty good one down south in Dublin, North of England and Scotland were okay, but London and the South East was ignored. It was partly driven by the acquisitions the business made, which had regional presence, rather than London presence,” he explains.
“I still think there is growth here in Northern Ireland and Southern Ireland’s budget constraints may also drive some further outsourcing.”
With the market for cleaning and security alone worth billions of pounds a year Seaton says the firm still has a long way to go to achieve what it wants to in terms of market share.
But he adds: “We have a clearer vision of where the business is going to go and where it is today. It is only in the last nine months we have focused on these niche markets - government sector outsourcing, infection control, education sector bundled services, financial sector. The route map is now in place.”