REACT’s final results for the year to September 2020 show strong revenue growth, due to the dedication of colleagues and business partners.
It’s always a pleasure to share good news, however difficult the backdrop. Our RNS trading update with final results for the year ended 30th September 2020 is a case in point. The REACT Group plc made strong progress in the period, and we achieved a 41% growth in revenues to £4.36 million. REACT is an AIM-listed company (ticker: REAT.L), and we’re proud of the progress we made in meeting the challenges of the year as a whole.
Strong revenues are a sign of REACT’s developing business
REACT reports three main areas of business. The first two are driven by contracts. First, we have Contract Maintenance, where we deliver regular deep cleaning regimes (such as in the healthcare and public transport sectors). Secondly is Contract Reactive, where REACT is the first responder to an on-call emergency response service operating under a formal contract or framework agreement, typically 24-hours a day, 7-days per week, 365-days of the year. The third area is Ad Hoc, where REACT provides a solution to typically one-off situations outside a framework agreement, such as for fly-tipping, void clearance, and Covid-19 decontaminations. Because of the relatively short- to mid-term nature of Covid-19, our annual report records all Covid-19 decontamination work in the Ad Hoc category of business.
Our 2020 revenue growth has been the result of both strong underlying performance in the contract business and ad hoc demand driven by Covid-19 decontaminations. As our RNS trading update states: “Excluding the increase in revenue from Covid-19 decontaminations and despite the negative impact of lockdown in some key business segments, the core business still grew revenues by 26%”.
During the year, REACT won a small number of material contracts, all of which were announced via RNS. We also expanded our services with existing customers and won a number of smaller projects, none of which alone were material enough to formally announce, however all contributed to this period of success. These included the award to carry out a deep cleaning programme to twelve care home sites for one of our newly appointed nationwide customers. We also delivered deep cleaning programmes at a number of prestigious manufacturing sites, distilleries, film studios and offices throughout Great Britain.
Excerpt from the Executive Chairman's Statement
“I am delighted to report strong progress in the year to 30th September 2020, the second trading year reported by this management team and the first full year since the business restructured. The Board of REACT Group is pleased to report that the Company has delivered significant organic growth in the period under review and continued to deliver material improvements in operational performance and profit contribution.”
“A key focus has been to maintain the resilience of the Company's service and to keep our workforce safe. We rapidly moved operational and support staff to working from home and deployed equipment, improved methods, and reinforced training for all our specialist operators. Despite coming into close contact with contaminated property, I am pleased to report that at the time of writing we have not had any of our specialist operators or operational and support colleagues at REACT test positive for COVID-19. Our strategy for growth is clear; we will continue to build a leading position across our business through fast-paced organic growth and if the right opportunities present themselves, via strategic acquisitions, to support our goal of becoming the country's most trusted name in the provision of specialist cleaning, decontamination, and hygiene services.”
Commenting on the results Shaun Doak, Chief Executive
"We are pleased to report a strong financial performance with improvements across the board on all key metrics alongside a year of substantial progress in developing our business through accelerating organic growth.
"The new financial year has begun well and the outlook for the Group remains positive. We believe REACT is well-positioned to continue to support its customers' critical requirements.
"On behalf of the Board I'd like to thank all of our colleagues and business partners for their contribution, our results are a measure of their commitment, hard work and dedication throughout this challenging period - thank you!"
You can find the full RNS trading update on our website.
To find out more about the REACT Group plc, REACT Specialist Cleaning and our full range of specialist cleaning services, contact one of the team today.