The making of a company that is different.
In 2001, I teamed up with Leo Browne. We had a company called ARA Investments Pty Ltd that we had taken off the ASIC shelf a few years before. Our initial office where we worked was Leo’s kitchen.
Right from the beginning we had the idea of building a multi-divisional industrial and commercial services and manufacturing business. The very first company we purchased was Sealeck Doors and Windows in Adelaide in May 2001. During the first twelve months, we established four of our platforms. We had a manufacturing business – Sealeck and Monarch Doors, a security integration business called AIC Solutions, an industrial electrical business – Bass Electrical, and a fire protection business – Automatic Fire Protection. These were all acquired businesses.
We had set a goal at the beginning of our journey to grow ARA into a $100 million a year business in five years. In addition, the objective was to get to a 10% EBIT and no bank debt. We came really close. We got to $97 million of revenue with an 8% EBIT and no bank debt. This gave us confidence to continue to grow ARA in a meaningful way. We look fondly upon those first five years. As we did not have a bank facility to provide funding, we funded the various businesses we purchased for their working capital requirements. If ARA did not do well, retirement would be challenging. We were very determined to be successful.
As the business developed in those first five years, the journey was like a simultaneous equation. We had to have funding, we had to purchase strategically, we had to manage the balance sheet to keep it strong and most importantly, we had to be profitable. It was all a dream come true.
In December 2006 we took a giant leap forward. The Advanced group of companies went into Voluntary Administration and we were asked to become the licensee of the Administrator. This was one of the first pre-packaged insolvency transactions in Australia. We traded Advanced through its voluntary administration and even made a profit. ARA was now a business doing approximately $150 million per year.
In 2007, ARA became an employee-owned company as several managers began purchasing shares in ARA.
Since the start of ARA, in the first six years and for the next nineteen years, we have grown ARA consistently. Revenue has grown at a compounded rate of 19% per annum. The ARA strategy is a combination of strategic acquisitions and organic growth. Only twice in our twenty-five-year history did revenue decline from the prior year. The first-time revenue declined was in 2010. Revenue went from $201 million to $197 million. This was a result of the global financial upheaval. The second time was in 2021. Revenue went from $621 million to $576 million. Although this was during COVID, the decline was due to finishing a large infrastructure job in 2020 that was not replaced until 2022.
These results told us that the ARA base business was solid and was comprised of services and products that are required even in difficult economic times.
We completed a very strategic acquisition in 2017. We acquired our cleaning business, but most importantly, we acquired the 49% ownership in Michael O’Loughlin’s Indigenous Services business. This acquisition, coupled with Michael’s leadership, jump started ARA’s focus on reconciliation in Australia. We have a Reconciliation Action Plan which we take very seriously. We work hard to make certain the ARA Australian work force has provided meaningful employment opportunities for First Nations People. We have the opportunity to help our customers achieve their Reconciliation goals by delivering our services through ARA Indigenous Services.
From a very early stage in the ARA journey, we wanted to be transparent to our customers. To that end, we have continuously invested in service software that allows our customers to see directly that we have fulfilled our contractual obligations. The technology has changed significantly in our 25 years. We have graduated from large tablets to mobile phones.
Along with continuous growth, we have tried to create a unique company. Our brand has visually evolved and changed during the past 25 years. Although the visual brand has changed, our core values have not changed.
Ralph Waldo Emerson said, “To be yourself in a world trying to make you like everyone else is a great achievement.”
ARA is a company that wants to deliver top notch service and products to our customers. We want to be transparent, admit a mistake if we have made one, then tell our customers how we are going to fix that mistake, and most importantly do exactly what we say we will do.
We want to stay true to ourselves and our values.
It’s different here.®
