As Business News' Rising Stars search draws to a close, the founder of a contracting company that expanded through the GFC, but had a “disastrous” last financial year and more recently lost $1 million through its dealings with Forge Group, is pursuing growth again with a new strategy.
The founder of a contracting company that expanded through the GFC but had a “disastrous” last financial year, and more recently lost $1 million through its dealings with Forge Group, is pursuing growth again with a new strategy.
“I’m not glass half full or half empty, I’m the glass is half full, what do we have to do to fill it up? Maybe even get a bigger glass,” APTS founder Paul Newbound said.
Henderson-based APTS is eyeing bolt-on acquisitions and new sectors to expand its piping pressure-testing and cleaning business.
The company won a Business News Rising Stars award in 2011 after Mr Newbound expanded it to 140 staff and a turnover of nearly $40 million.
Employee figures fell to a low of 60 in the 2012-13 financial year, but a focus on diversifying from a few major contracts to many smaller contracts has helped APTS claw back to 140.
Mr Newbound said the past two financial years had been tough after it finished a major contract on Woodside Petroleum’s Pluto LNG project.
He described the following year spent waiting to start work on other delayed projects as disastrous, forcing him to lay off staff.
In the past few months, APTS has re-hired most of those employees and increased the work it does in the mining, power generation, petrochemical and water treatment sectors to reduce its reliance on the oil and gas sector.
“We’ve had quite good growth,” Mr Newbound said.
“Some of it’s from diversification, we’ve started to look to other markets and also different regions. We’re now doing work in PNG and we’ve been looking at work in South Korea and Indonesia.
“One of the things we (now) do is increase the number of smaller projects. To decrease risk not only for upcoming work, but also for things like Forge happening.
“Some (projects) are quite small, but that’s decreasing our exposure in the marketplace so if one of them fell over ... then that’s one out of 30.”
The impact of engineering company Forge’s collapse has been widespread and for APTS it meant $1.1 million worth of work it had already completed had to be written off.
Mr Newbound said a new management team had been put in place that set about changing the company’s approach to development.
General manager Kevin Wilson has moved into Mr Newbound’s chief executive role and APTS has added state-based business development managers to spend more time with clients.
Mr Newbound has stepped into a new executive director role to focus on finding contracts, new markets and acquisition targets.
He said APTS was on the hunt for companies making between $5 million and $10 million in revenue that it could acquire to expand its service and maintenance offering.
Mr Newbound said extending its service offering was something several of its clients had asked for and he envisioned, if carried out, would put APTS in a stronger position to win contracts in new markets, particularly in South Australia.
APTS is also pursuing registered training organisation status to grow and formalise its current training program.
“In the next 12 months I’d like to see (APTS) double again. I’d like us to get to around 300 full-time staff. That would push us up to $70 million to $80 million revenue a year,” Mr Newbound said.
“Because we’re project driven, obviously our revenue has massive peaks and troughs.
“If we can level some of that out a little bit with maintenance type work it will allow us to offer our people more stable employment.
“It also helps to smooth out our revenue and (will) allow us to grow in a more sustainable fashion.”