Which Are The Best Service Sector Companies & Managements?

Each year  the  Broadwalk  Services  Awards  recognise  outstanding  achievements  by  quoted  companies  and  their  management  teams  in  the  broadly defined business services sectors. The sponsors are Broadwalk  Asset  Management that manages  the  Broadwalk  Select  Services  Fund, Europe’s  first  absolute  return  fund  to  focus  on  the  services  sectors (the  fund  has  risen  almost  90% since  its  inception  in  June 2008). The  business  services  sectors  are  one of  the  less  well  known  success stories of the UK economy, and these awards are another step towards raising their profile.

This Year’s Winners

Here are the citations for each winner:

While the  European  macro  environment has not  been helpful, easyJet has done an outstanding job in winning market share by exploiting its wide European network, low cost advantage and strong financial position. CEO Carolyn McCall has laid out very clear targets to ensure  the capital structure remains robust while also efficient.
Cost discipline is also very tight which will help mitigate uncontrollable increases in fuel, foreign exchange and airport charges.


The picture shows easyJet CEO Carolyn McCall receiving the firm’s award from Broadwalk founder Charlie Cottam.


Miles Roberts CEO and executive team, DS Smith
Roberts joined DS Smith as CEO in May 2010. Since then the  company  has  been  transformed.  In  2010  corrugated packaging company Otor of France was bought for €247m. In  2011  Spicers  the  wholesaling  business,  was  sold  for ‚200m.  In  January  the  company  announced  the  purchase of  SCA  Packaging  for  €1.6bn,  partly  funded  by  a  skilfully handled ‚466m rights issue. DS Smith became the leading corrugated packaging company in Europe and was strongly earnings  enhancing.  In  October  Roberts  and  Finance
Director Steve Dryden announced the  integration  is ahead of  expectations  with  higher  synergies  and  a  faster  debt reduction schedule.

Sir Ian Wood, Chairman, Wood Group (retired November)
Sir Ian joined the business in 1964 and as Chief Executive since  1967  pioneered  the  group’s  move  into  oil  and  gas engineering  and  support  services  as  reserves  were discovered in  the  North Sea in  the  1970s.  Sir  Ian  build  a global energy services group with 42,000 employees in 50 countries. This included  well integrated  acquisitions of  JP Kenny, Mustang and PSN, as well as the $2.8bn disposal of  the  well  support  business  in  2011.  CEO  Allister Langlands  has  taken  over  as  Chairman,  with  Bob  Keiller becoming CEO.

Invensys sale of Rail to Siemens in November for £1.7bn
With  a  single  transaction  CEO  Wayne  Edmunds  has effectively  neutralised  the  pension  fund  issue  and  focused Invensys  on  its  core  industrial  software  and  systems businesses. The price of ‚1.7bn was good representing 15x historic EBIT. After  two ‚625m returns to  shareholders  and to  the  pension  fund,  it  allows  for  ‚400m  of  bolt  on acquisitions  without  going  into  debt.  Invensys  is  now  very well  positioned  to  act  as  a  consolidator  in  the  fragmented industrial software market in particular.

DKSH CHF 903m raised in March at CHF48                                                                                                                        Joint Global Coordinators: UBS, Deutsche Bank. Joint Bookrunners: Berenberg Bank, Credit Suisse.
Zurich  based  DKSH  is  the  leading  market  expansion  services group  focused  on  Asia  with  over  24,000  staff  and  sales  of  CHF 7.1bn.  It  distributes  products  in  the  consumer  goods,  healthcare, performance  material  and  technology  sectors.  Chairman  Adrian Keller and CEO Dr.Joerg Wolle have overseen the doubling of net sales  and  the  quadrupling  of  profits  since  the  merger  of  two  150 year old Swiss trading houses in 2002. The maiden interim results as a listed company in the summer showed 16% growth in sales, and 24% rise in net profit.

Under  founder  Chairman  Jeremy  Pilkington  and Managing  Director  Neil  Stothard  capital  discipline has been impressive, with  a  tender  for 7% of  the outstanding  share  capital  undertaken in  February. The  specialist  focus  on  Vp’s  rental  fleet  has enabled  it  to  grow  despite  a  continued  difficult operating  environment.  Strong  cash  flow  has continued  to  ensure  a  strong  balance  sheet  that supports  re-investment  in  the  fleet,  share buybacks and further bolt on acquisitions.

Chris Cole, CEO WSP Group (now Executive Chairman, GENIVAR)
Cole and his fellow partners founded WSP in 1969. He floated the company in 1972 with  sales  of  ‚1.9m  and  50  people.  Through  organic  growth  and  well  integrated acquisitions WSP grew to 9,000 employees in over 30 countries generating ‚717m of  annual  revenue. The company was particularly  strong in  high  rise  building,  Rail, Bridges  and  the  environmental  sector.  In  June  Canadian  GENIVAR paid  a  67% premium  to  WSP’s  closing  price  with  a  ‚343m  cash  bid.  The  435p  per  share  bid represented around 13x current year earnings forecasts which was a very good price given the depressed stock market conditions.