React Group PLC (LSE:REAT) chairman Mark Braund joined Proactive's Stephen Gunnion with details of the company's interim results to 31 March 2024 and the growth trajectory going forward.
Braund explained that the company focuses on three main areas: emergency cleaning, janitorial cleaning under the Fidelis banner, and commercial window cleaning through the LaddersFree. Emergency cleaning, its original core, deals with events like trauma clean-ups and anti-social behaviour. The Fidelis segment, acquired in 2021, provides long-term contracts in sectors such as healthcare and education, maintaining high-profit margins. The LaddersFree acquisition in 2022 expanded its services to commercial window cleaning across the UK.
Braund emphasised the company's shift towards increasing recurring revenue, which now exceeds 85%, compared to below 30% four years ago. This growth is driven by both organic means and strategic acquisitions. Over the past four years, the company has averaged 24% organic growth annually. Moving forward, React Group plans to continue this dual growth strategy, balancing new acquisitions with organic growth initiatives.
Financially, Braund noted React Group is performing well, with significant increases in gross profit and free cash flow. The focus remains on growing gross profit rather than just revenue, with a strategic approach to operational efficiency and market expansion.
