Cape is doing ok, says boss

INDUSTRIAL services company Cape plc has seized on the renewal of a major maintenance contract with Alcoa as evidence the company is performing well.

Cape's executive director Australia Stephen Murdoch was responding to criticism of the company following three acquisitions in 2007 worth $430 million.

Managers from Perth companies PCH Group and TCC Group have since left Cape in order to establish three new competitors - Giovenco Services, Modern Access Services and International Formwork & Scaffolding.

Cape has also taken legal action in the federal court against 10 people involved in the new ventures.

Mr Murdoch insisted he was pleased with the integration of the three acquisitions, despite the loss of most of their former managers.

"I'm extremely proud of our executives and management team and how they have managed that," Mr Murdoch said.

He said the turnover of the merged group during 2008 would be "about the same" as the combined turnover of the three acquired businesses when they were independently owned.

"We've been able to defend our business and market share."

He is positive about the future prospects for Cape, which has about 1,500 people in Australia and operations based in four regional locations around the country. "No one that we are competing with has that footprint," he said.

Mr Murdoch said Cape had done a lot more than combine the three acquired businesses, though this was significant. The integration had allowed the merged group to cut costs from the business and achieve greater economies of scale.

It now has the capability to move formwork and scaffolding equipment around the country, which he says will help it achieve better utilisation rates.

Mr Murdoch said renewal of the Alcoa maintenance contract showed the success of Cape's sustainable partnership model.

"It's about understanding the key drivers of our clients business and building a partnering relationship."

He cited the introduction of a new invoicing system, which has cut the number of monthly invoices sent to Alcoa from more that 1,000 to three, as an example of its new approach.

Mr Murdoch said the acquisitions had delivered some unexpected bonuses.

TCC Group had a training business, which he said "never got to its potential".

"We will take that regional business to the national market. That will help to differentiate Cape in the market."

Cape was also planning to support the growth of Scaftech, a profitable software programming business previously owned by Concept Hire


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