Molokomme wants aggressive growth for G4S
After the profile of Distell Botswana grew under his stewardship that drove volumetrics and shareholder value, the man who had come to be known as the face of Botswana Alcohol Industry Association is now the MD of G4S Botswana where he is already mulling over the issue of how job reservation for majority citizen- owned companies may not always be such a good idea. He spoke to KITSO DICKSON.
Q: As the new MD of G4S Botswana, kindly give us a feel of how things are so far for you?
A: I have been in the role for seven weeks now, hence it might be a bit early to have a 360 degree view of the entire business. However, I and the senior management team have a strategic direction that we have embarked on to ensure we achieve strategic goals for the company and its shareholders. We have recently released our 2020 financial results and they demonstrate the challenges that the sector is faced with, particularly during a
pandemic year. While the landscape is expected to remain the same in the short-term, we have learnt many things from the previous year that make us believe we can fare better and can be more resilient this year.
Q: Before joining G4S, you were MD at Distell which is an entirely different market from your current one. What attracted you to G4S and how did your previous role prepare you for your current one?
A: My role as MD for Distell Botswana was one of my most fulfilling experiences. I had joined it in late 2014 to find a group of talented employees with great brands. All that was needed was pulling the resources together with a formulated strategy for sustained growth. Of course, it sounds easy but it wasn't at the start. I had to convince the shareholders to invest in some new talent and also an opportunity to grow our own corporate identity. Most people at the time did not really know about Distell Botswana but mainly just the brands in our stable. So we set out on a course that eventually would see us double the size of the business (revenue-wise) in five years and had it not been for the effects of the pandemic (with the closure of the industry), we would have achieved a feat of doubling our volumetrics. Simply translated, we would have organically doubled the size of the business in a five-year period. Added to this were the external factors, particularly from a regulatory point of view. I had assumed the chairmanship of the liquor industry two years into my role at Distell Botswana. So there were challenges with engaging with the regulator during the period, be it related to the alcohol levy and/or operating during the pandemic. So to answer your question, that role prepared me well enough to understand what is key in building a successful business and stakeholder engagement. As for the attraction, my purpose is to transform business and deliver on shareholder value, hence this seemed like a good challenge to do that and an opportunity to lead a service business. I believe business leaders can also transverse any industry as the skills we acquire are not necessarily industry specific.
Q: So far what can you say about the market you are in?
A: The security industry is a key industry in any economy. Unfortunately most clients realise the importance of it only when they have experienced a risk-related incident or have come across it. So in essence, its usually more reactive than proactive. In as far as trading is concerned, the industry is liberalised, with government having enacted legislation that in principle was aimed at creating opportunities for citizen participation. However, in the process this has created limitation for companies that are not majority citizen-owned despite the fact that they have some citizen shareholding and in the main employ a lot of citizens. Such is the case with G4S Botswana that has over 2600 employees, 99 percent of whom are Batswana but the company is barred from partaking in public sector security tenders. We strongly believe that there are other ways of addressing this more equitably.
Q: When you arrived at G4S, what was the state of the company?
A: I found the company in good shape, thanks to the previous executive management and the strong support of the Board of Directors. It has been stable over the years and will continue to be so. It has faced challenges, most of which are external but have an impact on its operations, one of which I just alluded to.
Q: Since you came, are there any changes you have made? What can shareholders look forward to that is aligned with your leadership and business strategy?
A: It is always best to learn the business first to ensure an understanding of existing gaps that may need to be plugged or in some areas of improvement. So I am still in that phase. In reality one deep-dive to gauge what is critical to the business and its continued operations. What is impressive is that the strategic
direction as set out at Board level is sound and relevant for the period we are in and any changes, should there be any, will only be for realignment to enhance what is in place. Shareholders can look forward to continuity and sustained growth by approaching new opportunities in the market with more vigour to ensure that we grow the top-line of the business. We also will work on ensuring that we retain existing clients in our portfolio.
Q: Kindly share with us the direction of the business under your stewardship.
A: In essence we will continue to grow the business more aggressively and continue to strengthen the capability of our teams to execute. Top of our list is to serve our customers better, so customer service will be key in driving this business forward.
Q: How should the market measure your performance as the MD of G4S?
A: I have a performance contract in place which has been agreed with the Board. So delivery of that will be the guide. This is tied to the normal metrics that shareholders and potential shareholders expect, which is to grow the business in value, both top line and bottom line, and both retain and increase our market share. Our financial results will ultimately show this.
Q: Income lines for the business have been under pressure. Where do you see growth of the business coming from?
A: Correct. All our service lines have been under pressure, some more than others. Unfortunately, when it comes to our man- guarding business, the current legislation tied to ownership has resulted in non-participation in some areas that historically we participated in while the other lines are purely more on the competitive landscape evolving. I still believe that even as this is the case, we can still grow the service lines by leveraging our technological offerings and improving on our customer service. Ultimately that is what customers consider.
Q: What opportunities have you identified for the business?
A: There are opportunities all across the spheres of the security industry. G4S Botswana offers an integrated security solution coupled with a good corporate reputation and high service levels. The opportunity is to go out and sell this value proposition to potential customers. To existing clients, we must ensure we value their loyalty by going out of our way to continue to serve them diligently. Competition is fierce, and that can only serve to benefit consumers as industry players continue to innovate and offer high-value security solutions. That where we believe we will position ourselves.
Q: How will you position G4S to compete in an industry where citizen ownership requirements are ever-increasing in tenders?
A: We are a Botswana-grown business and a considerable percentage of our shareholding is held by Batswana with the foreign ownership element positioned to help this business leverage on international security standards and new technologies. This is not unique to G4S Botswana but is so across the world around the security space and indeed other industries. While the citizen ownership element is important for any country, it must be balanced with exceptions of what the business stands for when it comes to employment creation and enterprise development. G4S Botswana is one of the leading private sector citizen employers in terms of numbers and it is my considered view that this element should be considered in that regard. So we will continue our engagement with the regulator on this issue through our private sector representative, Business Botswana, to find common ground.
Q: What does the acquisition of the parent company mean for this subsidiary? What should shareholders expect?
A: As advised to our shareholders, on the 6th of April 2021 the acquisition of G4S PLC by Allied Universal was concluded. This transaction affects us at the parent company level and there will be no structural and operational changes for its subsidiaries, at least not in the foreseeable future. Allied Universal offers us the opportunity to leverage more sophisticated technologies in the security industry. As you are aware, it is from North America and their forte and strength is in the technological space.
Q: As the new MD, what will you do to address staff turnover which we have seen in the past five years?
A: As an executive team together with the Board, we are addressing this through a retention strategy. It is critical that we provide an environment that is conducive and encourages team members to want to stay longer.
Q: On the BSE, the stock price of the business has been facing turbulence. How do you plan to address investor sentiment to boost confidence in your leadership?
A: I would not refer to the movement in our share price as turbulent. It has moved up and down within an acceptable range compared to other listed entities on the exchange. The recent decline - close to 12 percent - was probably linked to our latest financial results for 2020 that we released end of March 2021 and
the main issue was that the Board took a strategic decision not to pay dividends linked primarily to the business’s performance as affected by the pandemic and the foresight to re-invest some capital into the business to help boost our performance for this current year. This is not isolated as we have actually seen many entities follow the same route from banks to other entities. We will continue to engage investors and other stakeholders and our next engagement is our planned AGM in late June.
Q: Please share any extra information that may help this publication understand things better.
A: We continue to seek more opportunities in the market and our value proposition to clients is way higher than what our competitors offer across our service lines. Let me also highlight that while most clients purely make pricing the ultimate consideration for their choice of supplier (regardless of the fact that the assets under consideration for security provision are high- valued), this shows that they are actually undervaluing what they ultimately provide security for. In many instances, clients sign up with some of our competitors but when there is a breach, they engage us for our consistent high service levels. In that scenario, for the client the total cost of service tends to be much higher than if they had engaged us at the start. Our value proposition is based on a comprehensive risk assessment, then a tailored solution, which in many instances can combine both the human element of man-guarding with technology deployment, resulting in an optimal cost structure for the client. So in the end, it is an optimal cost to serve for our clients.