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Tue 5 Jan 2010 04:00 AM

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On guard

Transguard MD Mike McGeever talks about the group’s latest sterling results and its acquisition of MEP contractor MACAir.

On guard
Mike McGeever, MD of the Transguard Group.
On guard
Park Inn, Yas Island, where Transguard has clinched a cleaning-service contract.

Transguard MD Mike McGeever talks about the group’s latest sterling results and its acquisition of MEP contractor MACAir.

Your latest figures record an increase in turnover of 57% to AED607 million, and doubling profit to AED75 million, during the last financial year?

The dramatic increase in profits last year was because we effectively went wholeheartedly into hospitality and then our FM business, so we grew from nowhere the soft services and FM part. The business is split into three divisions: outsourced services, FM and cash-handling services. The FM business saw a significant increase. I expect 2009, certainly in our outsourced services division, to be lower, simple because of the downturn in terms of the construction industry and business in Dubai generally – and, of course, worldwide. Everything we expect, I am sure, will happen – it is just going to take a bit longer.

How has the downturn affected Transguard?

Yes, to a certain degree the current situation has impacted Transguard. As I say, on the outsourced services we have not been so busy. Growth, while it has been impressive historically, has slowed this year simply because the size of the marketplace has decreased, and people are taking a little longer to make decisions in terms of their contracting.

Our outlook for the future is positive. The acquisition is a strong vote of confidence in Dubai and the UAE. We are bullish about the future. The infrastructure being set up here in Dubai and the UAE in particular includes such notable achievements as the Dubai Metro, and the F1 at Yas Island in in Abu Dhabi, which was superb. So we have every confidence we will be continuing our growth into the future.

What was the reasoning behind the acquisition?

MACAir is a considered strategic move. What we have done in FM is decided that, as well as having the soft services, we want to offer the full package – proper FM, self-performing, so we can control quality, efficiency and the expediency. We are very, very keen on making sure that when we have a client we can provide and anticipate everything that they will require.

I think it is an ideal time for people to be thinking about and anticipating what the future will hold, very much as we are doing within our training division at the moment. There are some very exciting developments on this front. We are putting together some significant packages that will be available in the marketplace within four to five months. So I think now is an excellent opportunity for people to think and plan. At the moment we do training for security guards in Dubai, but are looking more broadly at APL security training.

The acquisition has expanded your market and customer reach?

Clearly it gives us a whole new client base. There is the dichotomy between contracting and maintenance. We are very supportive of the contracting side of MACAir. We have a significant forward order book of about AED550 million on the contracting side. We are bringing in Mike Callender as MD of MACAir. As well as the contracting side, his remit is to be build the maintenance side, where he has been very successful running a maintenance company for the last ten years, an MEP company in the UK.

Geoff Frost [the former MD of MACAir] will be very much involved with the company in a business development role, and helping to foster and nurture the relationships he has built up over the last ten years. The day-to-day management of the business will be with Callender.

FM and MEP are essentially two sides of the same coin?

I think MEP maintenance is a sub-set of FM. I do not think you can be an FM company if you are not able to provide the full package. What we are doing is making ourselves a supplier of choice. Many MEP companies have aspired to, and some have managed to become, FM companies, particularly in Europe. Similarly, you have single-trick ponies – catering and cleaning companies – moving up the value chain to FM. I think MEP is just another example of this.I do not think we are in the business of compromising on quality. I do not think you can, particularly with MEP, as health and safety issues are wrapped around it. I do not think we can cut corners. Short-termism is inimical to long-term quality.

We are looking at bringing operating lease type of ideas to the market. We are very keen on off balance sheet solutions. My intention is ultimately to be able to talk to developers about equipment supply, whereby we would be able to put equipment in at our own cost in return for a long-term operating lease. If you like, a quasi-EFI type deal.

So I think our differentiator will be that, because we are a government-owned company, and because we have the quality brand of Emirates associated with our name as well, people know exactly what they are buying when they buy Transguard. They know exactly what they are getting; they know who we are and where we are; they know we will be here tomorrow. And clearly we are in a position to stand by what we promise and deliver on it.

Transguard will retain the MACAir name?

The MACAir name is currently being retained. We see an intrinsic value in the name at this moment in time, simply because of the association it has had with quality in the MEP business over the last ten years. It will be the fourth division within Transguard. We have already put our mobilisation and transition team into play to allow MACAir and its staff to bridge, hopefully bump-free, into Transguard.

So we have mapped across things like HR, finance, IT, estimating, quality control, health and safety and security. These things are quite easy to do; we are already an established organisation.

MACAir will be a very important part of the business, and it will certainly be very important in terms of its relationship with our overall FM service offering.

What is your overall growth strategy?

We have been asked by customers in Oman, Bahrain, Qatar, Saudi Arabia and many African countries, as well as India, Pakistan and four European countries, to go and open Transguard internationally. We have not done so because the marketplace in Dubai, and the extraordinary growth we have had since our inception seven years ago, has suggested we are much better off to build on what we have and know, and that is across the UAE.

We will be moving internationally, and we will be selecting somewhere within the GCC to open first and foremost. Internationally, outside of the GCC, we are in discussions with several organisations about taking on a Transguard franchise. We will supply the knowledge, know-how and, in some instances, the opportunities and leads for the business; they will supply in-country knowledge and infrastructure. So that is very exciting for us.

Any final message?

I would like to extend a sincere thank you to the historic customers of MACAir and the Transguard group. All of you will understand that change sometimes brings uncertainty – that is not our intention at all in this instance. We would like the customers of MACAir to acknowledge and understand the benefits of the deal. We look forward to servicing them in the future, and introducing MEP to our existing customer base.

Transguard’s FM division

Transguard’s FM division delivers carefully-tailored and bespoke FM solutions built upon a solid foundation of global best practice. The division’s operational service delivery is designed along the FM continuum or whole lifecycle of a building or facility. Its FM consultancy team ensures that, from conceptual design through to construction phase, the principles of cost-efficient, sustainable buildings are delivered to the client. The operational team then ensures that the assets, infrastructure and appearance of the building are maintained to the highest standards and in compliance with the client’s and constructor’s guidelines, municipality instructions and globally-recognised standards.

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