Catering Insight caught up with Simon Pointon, group MD of Aggora, 12 months after it joined the Bunzl stable, to see how the dealer is progressing and look ahead to a new merger.
Now it’s nearly 12 months since the Bunzl Lockhart takeover, how has this changed Aggora?
There has been little change in day to day operations for Aggora as the Bunzl model is decentralised and all decisions are made locally. The biggest change for us has come from access to a much wider customer base. What’s more, we now have the opportunity to provide a broader range of services to both Lockhart and Aggora customers due to the services offered across the joint portfolio. This provides us with huge opportunities and 12 months on we’re still just scratching the surface.
I’m pleased that we’ve also been able to provide enhanced terms to Aggora employees since becoming part of Bunzl, as well as delivering on the promise of very little change. Even more pleasing is that we’ve had no employee losses due to the changeover.
How has the business performed over the last year or so?
In what has been a difficult economic environment the business has performed well, and we’ve exceeded our annual target. Aggora Technical, our service division, and our three divisions within Aggora Projects: equipment sales, design and build, and retail brands – have all delivered above expectations, with overall sales up by over 8% and margin consistent with the previous year.
One of our biggest achievements during 2018 has been the completion of a supply and installation project within the new East Stand at Twickenham Stadium for £3.4m.
What would you say the biggest business challenges are currently?
For Aggora our main challenge has been continuing to expand our engineering base in line with customer growth. Our new in-house training and development programme will be critical in supporting this in the future.
From an industry perspective, the word ‘disruption’ is something we have heard a lot about, and managing disruption in uncertain times is a challenge, especially around capital projects.
Our clients have had to face many disruptions, for example the introduction and increase in the living wage, consumers demanding more choice such as street food or veganism and issues surrounding disposable packaging to name a few. All of this puts more pressure on the catering equipment industry to provide more cost effective and innovative solutions. Our ability to provide a forward-thinking, customer-centric approach has helped us to deliver growth in disruptive times.
How do you ensure that Aggora remains financially stable?
Aggora is fortunate to have secured long term contracts with most of our key partners. This, in addition to be being part of Bunzl, an £8.6bn Plc, gives us confidence in our financial security.
What is the composition of the company?
Aggora is split as follows: 50% servicing and maintenance, 17% equipment sales, 15% design and build and 18% retails brands. All divisions have seen growth over the last 12 months, however there has been very little change in how our services are split compared with last year.
2019 sees the merger of Lockhart Design with Aggora Projects, forming a new division: Aggora Lockhart Projects (ALP). Lockhart Design has always operated semi-independently to Lockhart Catering Equipment and the formation of ALP will see the design and build division within Aggora double in size. Bunzl Lockhart Catering Equipment will continue to be the parent company for Aggora.
What kind of asset management do you offer end users?
Aggora Technical offers customers a complimentary asset management tool which is a bespoke system created by our in-house developers. As far as we know this provides more in-depth analysis than other systems offered by our competitors. Crucially, our system is centred around giving complete transparency to the customer to help them make informed choices around their catering equipment spend.
We’re continuously improving and updating our asset management system and we’re excited about the imminent launch of our new asset management app, which in the future will host our asset connectivity platform as well as an energy efficiency module.
Have you made any recent investments?
Much of our investment this year has been directed towards service engineers and our IT infrastructure. All our PPM programmes are now completed electronically, providing instant reporting for our clients. This was the last area of the business to go fully digital following the recent implementation of our live F-Gas programme and timesheet app.
People are the key to a successful business and Bunzl places a high emphasis on investment in employee development. Aggora staff now have access to a wide range of personal development and training options, which is really positive for our workforce.
What kind of relationship do you have with the supply chain?
We have years of industry experience and longstanding relationships with key suppliers to the industry. This gives us a huge amount of insight into tried and tested equipment and we continue to recommend core products we know are reliable. We focus on cost of ownership as well as upfront purchase prices. We’re clear to customers that a low initial cost isn’t always the best option as the maintenance costs and spare parts availability can end up becoming an issue.
We also recognise that the needs of the industry are constantly changing so we’re always looking out for new, innovative products. Our equipment team regularly attend events and product training to make sure they stay on top of new developments and are knowledgeable about the products they are selling.
What criteria do you look for when considering signing up suppliers or manufacturers?
There are a number of criteria we look for: innovative solutions/new products to market, sustainability/energy efficiency, increased productivity/multifunctionality, and reliability/fit for purpose.
We pride ourselves on delivering exceptional products sourced from around the globe, all of which must adhere to all industry standards and Bunzl’s corporate, ethical, environmental and sustainability policies.
What’s your staff headcount?
Currently Aggora employs 210 people and we’ve expanded employee levels by over 10% every year for the last 10 years. With the formation of ALP from 1 January 2019, our numbers will increase to 241.
What kind of planning have you done ahead of Brexit?
Bunzl UK is acutely aware of the need to try and minimise the potential effects of a disorderly Brexit on its customers. Clearly it’s very difficult to predict at the moment what might actually happen as 29 March approaches. However, we are taking sensible steps including significantly increasing our stock levels, making sure we can utilise all ports around the UK, and creating a customs warehouse to help speed-up the process of getting goods from the ports and into stock so they’re available for customers to order.
In addition, we know that the majority of our key suppliers have also increased equipment stock levels and key spare parts distributors are following suit. So as an industry, I believe we are as ready as we can be to cope with whatever challenges Brexit ultimately creates.
What direction can you see Aggora moving in?
We have exciting plans for 2019 – firstly with the formation of ALP and secondly the continued expansion of Aggora Technical.
The formation of ALP will enable us to offer a superior design and build solution to our foodservice customers. ALP will also house our equipment sales and retail brands divisions, both of which will benefit from the increased infrastructure within ALP.
Aggora Technical will continue to grow its refrigeration division in 2019 following great success since its implementation 3 years ago. Another dedicated service team making significant progress is our new warewashing division operating in London, which is improving our KPIs in new sectors such as restaurants and hotels.
With the addition of new asset management functionally on Aggora Online, the launch of the new app and employee development programs in motion, there is a lot to be positive about at Aggora for the year ahead.