In its former incarnation, Hastie Services Group provided maintenance for Hastie Group products – mechanical, electrical, fire and refrigeration. This is something it can continue but is no longer confined to doing. “Hastie was not a service-centric organisation. Services hung off the edge of the construction business. We will change the way we sell our services, with revamped ‘field force efficiency’. We have hundreds of technicians on the road, and we can be more efficient with the way we get them from one customer to the next, and billing their time, to reduce dead time while they are travelling and revisiting if they get the job wrong the first time.”
Its parental ties have kept the services group working on jobs with low margins, such as installations. “That is part of the ball and chain the group dragged along,” Jowett notes. “The transactional service work we can invoice and be paid on time.”
Working in the stagnant retail and commercial construction sector, Hastie Group’s market, has also restrained the services business from seeking contracts in the areas of health, education and telecommunications that are “still spending”.
Jowett’s first year revenue target of $200 million is lower than last year’s performance of about $275 million. “During the period of receivership, we let go project work and other parts of business, so we are consciously downsizing and realigning,” he says.
“We are looking for a higher margin on lower numbers.”
Which is all well and good, but any venture bought out of administration or receivership is a risky one, and executives work very hard for private equity investors because they have their own money at stake.
“All four of us have written cheques and done their own due diligence. The chemistry for Allegro is that they need leaders who believe in the business, are committed and have skin in the game.”
The reward for the hard work is a big payout when the investors sell the business or list it on a stock exchange. Jowett says the exit hasn’t been discussed. “None of this is happening quick. No one has said it will be in two, three or even five years that it will be sold.”
