Spotless’s EBIT declines but CE set to boost cleaning services

Dateline: 22.02.2010
Author: Press release

The Spotless Group’s ‘Cleaning Services’ business experienced a 9.2% EBIT decline to $6.9 million for the first half 2010 although sales revenue rose 7% to $133.1 million. Much emphasis is being placed on the financial benefits expected to accrue from the recent conditional agreement to acquire the $140 million p.a. turnover CE Property Services Group.

“CE Property Services Group is a natural fit with Spotless and would enable us to offer additional services to existing and potential clients, improve outsourcing efficiencies and ultimately increase value for our clients. Importantly, its international footprint would deliver an important building block in our growth plans,” said Spotless Group CEO Josef Farnik.

“Our organic growth continues to be supported by an active acquisitive agenda with strict strategic and financial filters. We will continue to identify and assess opportunities that provide Spotless with a competitive advantage in terms of scale, geographical expansion or technical expertise,” added Farnik.

The Spotless interim report, announced 19 February, pointed to Cleaning Services’ revenue growth driven by recent business wins in the education, industrial and hospitality sectors; and a strong contribution from Arrix (which had been acquired June 2009). However, growth was tempered by a continuation of temporary de-scoping of major contracts due to the economic downturn.

In turn, EBIT decline was driven by the de-scoping of major contracts and the result is after expensing all Arrix integration costs. The company noted that labour productivity rates have been maintained despite a number of award changes.

The full report can be downloaded at www.spotless.com.au

Spotless’s EBIT declines but CE set to boost cleaning services