Spotless cleans up in P&O takeover deal

By Graeme Kennedy

Friday 9th June 2000

Maurice Nicholson

Catering company Spotless Services has doubled in size after taking over rival P&O Services.

Managing director Maurice Nicholson, who got into the commercial catering and cleaning business after swapping a block of flats for a coathanger factory more than 20 years ago, said the P&O takeover would raise turnover to about $275 million - but the company would not stop there.

"There will be a period of consolidation to make sure we keep our customers," he said.

"Then we will look for more acquisitions, although we must decide what part of the service market we want to get into now.

"We are already big in catering and laundry and through P&O have become a major cleaning operator as well.

"We will continue to grow those areas and expand into building and ground maintenance and perhaps waste management."

Spotless Australia, which owns the New Zealand operation, picked up P&O Services' Australasian operation as its London-based owners divested the business worldwide.

Spotless New Zealand then bought the local operation.

"The acquisition means we can put more facilities into the business," Mr Nicholson said.

"It gives us more critical mass and makes us the biggest in the New Zealand market - besides, if we hadn't bought P&O, someone else would have."

Mr Nicholson said P&O was about the same size as Spotless, with a turnover of about $110 million spread between commercial cleaning and hospital catering.

Spotless, he said, did about $60 million in commercial catering, $40 million in laundry - of which $25 million was to hospitals - and $20 million in building maintenance.

Spotless has expanded mainly by acquisition since entering the New Zealand market in 1970 as Nationwide Food Services.

It bought Huntsbury Food Services in 1988 and last year bought the $22 million-turnover Company Catering Co before adding P&O to its stable.

Spotless last year raised its holding in Taylors Laundry Services from 55% to 65%.

Mr Nicholson joined Spotless as managing director in 1986 as part of an acquisition deal when the Australian parent bought his Glenfield plastic coat-hanger factory, Cirman Sales.

Spotless began in 1946 as a single dry-cleaning store in Melbourne and imported coat-hangers from Cirman.

Originally an accountant, Mr Nicholson had swapped a block of Browns Bay flats for the plant because "it seemed a good idea at the time."

"It was the worst thing I ever did in my life," Mr Nicholson said.

"I knew nothing about it but wanted to go into business for myself and ran it for six years. It was hard work and I was pleased when the Australians turned up to do a deal."

Mr Nicholson said the commercial cleaning business was very competitive due to low entry levels - "anyone can get a mop and bucket and off they go" - while catering was more demanding with strict Health Department regulations.

"But cleaning is a good growth business," he said. "All the bigger players are taking more market share and P&O added to the set of services we can offer - that's why we bought it."

Spotless had continued to grow with increasing outsourced catering in hospitals, boarding schools, airport cafe-
terias and sports venues, he said, although the business was under pressure as numbers of on-site commercial and industrial outlets dwindled and lifestyle changes raised demands for higher quality and standards from staff cafés.

Comments from our readers

No comments yet