A Letter from Edward Federman on the Financial Year 2020
“It was the best of times,
it was the worst of times… “
Charles Dickens – A Tale of Two Cities
“I cannot think of a better description of this time we are living in than the introduction to A Tale of Two Cities. This past financial year has been a tale of before COVID-19 and after COVID-19.”
Edward Federman, Executive Chair and Managing Director
The first six months of the financial year were the best of times, whilst the second six months of the financial year was a significant challenge. When the COVID-19 pandemic came to the shores of Australia and New Zealand, we were unsure of what was going to happen to the business. It was incumbent upon the management of ARA to demonstrate leadership in dealing with the effect of the pandemic to ensure the safety of our employees and our customers and also to preserve the value of the company for our shareholders.
We immediately formed a Pandemic Committee consisting of the Executive Directors of ARA, the Chief Financial Officer, the General Counsel and the Compliance Manager. We established protocols of operation within the confines of government guidelines and our own judgment given the industries where ARA operates. The Senior Management Team met every day to determine how each business was performing given the government-mandated lockdowns and to make sure our employees and customers were safe and healthy. The daily meetings ensured that the company could react quickly to make certain that health and safety were the first priority and we were doing everything possible to maintain the profitability of ARA.
The majority of ARA businesses are essential services and thrived during the past six months whilst other ARA businesses struggled once the pandemic came to the Australasian shores. ARA Electrical had an exceptional year as they did a lot of infrastructure work and those sites continued to be open. ARA Property Services also had a very strong second half of the financial year as a result of extra cleaning requirements for our customers. ARA Manufacture did well as a result of the need for Australian manufactured products. ARA businesses that perform non-essential services struggled at times as customers restricted contractors from their premises.
Many ARA employees worked less hours or took pay cuts for a period of time due to the uncertainty of the pandemic. I will be forever grateful to the entire ARA team for their personal sacrifices during the initial period of uncertainty.
Managing during this pandemic has made ARA a better company. The collaboration and communication between senior managers have improved significantly. The daily meetings at the senior management level has encouraged a secondary level of collaboration with managers, salespeople and business development personnel around ARA. The emphasis of all the meetings have been cross-selling and introducing all of ARA services to existing customers.
19 Years of Sales
Despite dealing with the effect of a pandemic, ARA has completed this financial year in a very strong position. 2020 was the tenth consecutive year of record sales and the fifth consecutive year of record earnings. Earnings per share increased to $.46 per share in 2020 as compared to $.42 per share in 2019. Revenue grew from $555 million in 2019 to $621 million in 2020, an increase of $66 million or 12%. Revenue has grown at a compounded growth rate of 11% during the past ten years. The company had 4% organic growth in 2020.
ARA’s businesses have demonstrated the benefit of its diverse, but related, group of essential building services it has in the Group during the past financial year. It took a great effort by a lot of people for ARA to achieve our record operating results in 2020. I will be forever grateful to the ARA employees, the Senior Management Team and the ARA Board of Directors for the support we gave to one another during the trying times of 2020.
A special thank you to the Unsung Heroes 2020
They work hard and rise to the challenge. They lead through example, uplift their teammates and provide extraordinary customer service. They embody the resourceful spirit of ARA and they are indispensable to our success. These are some of the unsung heroes of our Group.
We are proud to share in their achievements, so please take the time to read through the ARA Group Annual Report for 2020 and watch out ARA Group Annual Report Summary Video 2020.
Co-founder, Executive Chair and Managing Director ARA Group Limited
With more than 30 years of experience in the building services industry, Edward Federman co-founded ARA Group in 2001 with a vision to build the business through organic growth and strategic acquisitions. Since 2001, Edward has helped to grow the business to employ over 2,000 people across a diverse range of product and service divisions.
Edward Federman currently serves as the Executive Chair and Managing Director of the ARA Group.