The Strata Benchmarking Trends and tips

Transcription

1 The Strata Benchmarking Trends and tips

2 What is your role in the business? Owner 45% Principal 35% Average # lots managed , ,275 How long has your business been operating? 11+ years 51% 4 to 10 years 31% <4 years 18% On average, businesses operate from 2 offices

3

4

5 23% 22% 30% 27% 32% 30% At least 20% higher 10-19% higher 1-9% higher Revenue Profit

6 Current proposed unit developments On this assumption Strata firms require new staff Melbourne 123,622 Sydney 88,013 Brisbane 34,353 Perth 14,643 Adelaide 6,450 Melbourne 475 Sydney 338 Brisbane 132

7 1. A strong growth outlook New developments already in the pipeline look set to underpin growth for years to come. But that can make it difficult for increasingly stretched businesses to keep pace, especially as wellfunded new entrants appear on the scene. So it s important to position your business now to achieve profitable growth. 2. Evolving business models Increasingly, the best-performing businesses are seeking to streamline systems to provide a more responsive service at a lower cost. By separating account management from service delivery, you can free experienced people to become relationship specialists, creating happier staff and more satisfied clients. 3. A drive towards specialisation More sophisticated developments have created new scope for specialist providers catering to large, high-value schemes. At the same time, small scheme specialists are carving a profitable niche by providing a highly efficient, standardised service.

8 Revenue

9 $1,855,049 $969,169 $1,439,415 $912,082 NSW VIC QLD WA Median figures NSW $ 733,881 VIC $ 350,000 QLD $ 442,771 WA $ 480,000

10 NSW VIC QLD WA 82% 92% 83% 76% 17% 9% 17% 24% Increased Decreased or stayed the same

11 79% 86% 97% 76% 100% <1,000 1,000-2,000 2,001-5,000 5,001-9,999 10, % 14% 3% 24% 0% Increased Decreased or Stayed the same

12 NSW VIC QLD WA Base contract management fees Insurance commissions received Fee for service Disbursements Property management (on behalf of lot owners) Facilities management (common property)

13 90% 89% 82% 77% 63% 68% 54% 45% 35% 29% <1,000 1,000-2,000 2,001-5,000 5,001-9,999 10, % 19% 18% 21% 16% 18% 21% 12% 10% 11% 14% 6% 8% 2% 4% 6% 5% Word of mouth Strong relationships with developers Active marketing ie. advertising, cold calling etc Acquisition of other businesses or client books Other Have not grown

14 Lots and plans

15 Average lots managed Average plans managed NSW VIC QLD WA NSW VIC QLD WA

16 $193 $207 $215 $239 $160 $169 $250 $276 NSW VIC QLD WA

17 29% 24% 19% 22% Large schemes Small schemes High profit Lower profit

18 3,424 lots across 224 plans 9.4 full time staff including 2.7 strata managers (other than the principals). 364 lots per staff member

19 Profit

20 44% 40% 16% 18% 15% 25% 21% 21% <10% 10-19% 20-29% 30+%

21 25% 22% 38% 32% 30% 25% 27% 26% NSW VIC QLD WA Average Median

22 Profit performance In general, high profit businesses don t generate a higher turnover than their lower profit competitors. They simply operate much more efficiently, earning 91% higher median profits from 54% of the revenue.

23 76% 61% 60% 48% 39% 40% 52% 24% Increased NSW VIC QLD WA Decreased and Stayed the same

24 Salary and wages (including on costs but excluding training and development costs) 44% Rent and premises costs 9% IT (Hardware and software)/communications costs 7% Training and human resources costs including recruitment 4% Marketing and business generation activities including advertising 3% Other 11%

25 Revenue growth Efficiency improvements NSW VIC QLD WA Cost cutting Employment of new staff

26 Top three factors impacting profit Lower profit businesses 1,000+ lots, profit margin <30% of revenue High profit businesses 1,000+ lots, profit margin >30% of revenue Retaining quality staff 69% 78% Customer service 51% 69% Client relationships 51% 60%

27 Staff

28 Combined full-time and part-time 1,000 2,000 2,001 5,000 5,001 9,999 10,000+ Strata managers (excluding principals) Other administration Accounts payable and accounts receivable Sales and marketing staff General manager Accountant/ financial controller Insurance broker or authorised representative Other Total

29 1,000-2,000 2,001-5,000 5,001-9,999 10,000+ Lots per strata manager (all managers) Lots per strata manager (excluding principals) Lots per staff member Plans per staff member

30 NSW 34% VIC 27% QLD 35% WA 31% High profit 29% Lower profit 37%

31 80% 73% 63% 62% 50% 50% 40% 45% Strata managers (excluding principals) NSW VIC QLD WA Other administration

32 $51,033 $72,395 <3 years $60,500 $89, years $70,233 $108, years

33 365 lots per staff 32% of total spend on salary

34 High profit Lower profit Hard to find staff with the right skills 53% 36% Hard to find staff with enough experience 16% 27% Salary expectations 5% 18% Too many applications from people who are not suitable 2% 10% None of these, it s easy 19% 4%

35 Future growth

36 45% 44% 39% 36% 36% 36% 36% 18% 27% 11% 14% 22% 22% 22% 18% 18% 18% 18% 18% 9% 9% 25% 18% 0% Facilities management Property management NSW VIC QLD WA Utilities Financial services Insurance Other

37 High profit Lower profit Facilities management 57% 39% Property management 36% 26% Utilities 29% 16% Insurance 14% 19% Financial services 7% 26%

38 State summary Capturing new growth 2016 Strata Benchmarking Results

39 State outlook: Queensland Charging directly Key insights Queensland businesses were least reliant on base contract management fees, preferring to charge directly for disbursements and facilities management. Base contract management fee $169 Biggest issues in the next 12 months Staff retention and recruitment 40% Average number of lots managed 3,382 Total revenue collected per lot $421 Spending too much time with lower value clients 34% Capturing new growth 2016 Strata Benchmarking Results

40 State outlook: Victoria Optimism blooms in the garden state Key insights Victorian businesses were most likely to have increased profits, with 76% earning higher profits in the 2015 financial year than the year before. Base contract management fee $239 Biggest issues in the next 12 months Attracting enough new Target clients 34% Average number of lots managed 2,247 Total revenue collected per lot $431 Spending too much time with lower value clients 30% Capturing new growth 2016 Strata Benchmarking Results

41 State outlook: New South Wales Strongest fee earners Key insights With median revenues of $733,881 in the 2015 financial year, New South Wales businesses were the strongest fee earners in the country. Base contract management fee $207 Biggest issues in the next 12 months Legislation 70% Average number of lots managed 4,462 Total revenue collected per lot $416 Staff retention and recruitment 29% Capturing new growth 2016 Strata Benchmarking Results

42 State outlook: Western Australia Improving efficiency Key insights While other states relied on revenue growth, 83% of Western Australian businesses said efficiency improvements accounted for profit growth. Base contract management fee $276 Biggest issues in the next 12 months Legislation 35% Average number of lots managed 2,305 Total revenue collected per lot $396 Staff retention and recruitment 30% Capturing new growth 2016 Strata Benchmarking Results

43 Achieving best practice Key take outs and things for you to think about 1. Maximise productivity High profit businesses invest in productivity, including staff training, technology and systems to support client service. 2. Focus on relationship management By turning strata managers into relationship managers, high profit businesses nurture and sustain the client relationships that underpin referrals and future growth. 3. Retain talented staff High profit businesses see skilled staff as the key to profit growth. By focusing on engagement and retention, rather than cost cutting, you can secure the outstanding people you need to build high quality relationships. Capturing new growth 2016 Strata Benchmarking Results

44 Office locations Connect with us on LinkedIn and follow Business expertise for Macquarie for more Benchmarking insights. Tim MacKenzie National Head of Strata Macquarie Business Banking T

45 Legal disclaimer This presentation has been prepared by Macquarie Bank Limited ABN AFSL and Australian Credit Licence no ( Macquarie ) for general information purposes only, without taking into account any potential investors personal objectives, financial situation or needs. Before acting on this general information, you must consider its appropriateness having regard to your own objectives, financial situation and needs. The information provided is not intended to replace or serve as a substitute for any accounting, tax or other professional advice, consultation or service and nothing in this presentation shall be construed as a solicitation to buy or sell any financial product, or to engage in or refrain from engaging in any transaction. The information is current as at May Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Statistics and information have been sourced from the Macquarie Bank Limited, Macquarie Business Banking Strata Management Benchmarking survey The economic analysis is based on information obtained from sources believed to be reliable but Macquarie does not make any representation or warranty that it is accurate, complete or up to date. Macquarie accepts no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. No member of the Macquarie accepts any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this information. Copyright is reserved throughout. The information contained in this presentation must not be copied, in whole or part, or distributed without the express permission of Macquarie. Capturing new growth 2016 Strata Benchmarking Results PAGE 45