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Impel strengthens its foundations. Increase in profit and more stable legislation.

18 f 2015

In its consolidated annual report for 2014 the Impel Group disclosed an increase in the operating result by more than 27 percent. The largest provider of outsourcing services in Poland recorded also an increase in sales and net profit.

 

The Impel Group closed the year 2014 with revenue at the level of PLN 1,686.4 million, representing an increase of 8.1% in comparison with the previous year. Sales in the largest business segment – Facility Management – increased by 11.6% (to PLN 1,203.8 million), while the Security segment remained at the same level.

 

Grzegorz Dzik, President of Impel S.A., commented that “The Facility Management segment was the driver for the last year’s growth. The Group companies strengthened their position not only in the area of cleaning services (significant contracts: Szpital Wojewódzki in Zielona Góra, Poczta Polska, Szpital Wojskowy in Żory, Komunalne Zasoby Lokalowe in Poznań and Szpital Zespolony in Konin), but also in technologically advanced facility maintenance services, where Grupa Lotos, Bombardier, Eiffage Budownictwo Polska and Uniwersytet Ekonomiczny in Poznań confided in us. The Security segment faced another difficult year characterised by a fierce competition and an adverse impact of the Public Procurement Law, resulting in the lack of valorisation of contracts and the application of the lowest price criterion. An increase in labour costs related to the reduction in subsidies for the disabled postponed the prospects for improving results to the following year. The implemented sales strategy, based on the selective approach to contracts, halted the growth of the segment’s revenue. Despite the negative result, in our opinion the potential for achieving the operating margin at the level of 3-4% is high. The amended Public Procurement Law will be conducive to it, as it ensures the valorisation of contracts from 2015 and the withdrawal from the imperative of obtaining the lowest price, which, in turn, will make it possible to set the market in order and put a bigger focus on quality. Based on the observation of the market, a further consolidation and an increasing role of the leaders can be expected on the security market in Poland, owing to which margins will return to European standards. Over the last months of 2014 and in the first months of this year a noticeable recovery in the segment was underway. Impel has been looking for new markets and implementing new solutions relying on a larger share of technology in the provision of services. The four-year contract concluded with the Ministry of Justice for the service consisting in the development and operation of the System for Electronic Surveillance of Prisoners, estimated at the total of over PLN 214 million, can serve as an example of the above. We signed major contracts with Jastrzębska Spółka Węglowa, a network of Stokrotka supermarkets, the Jaworzno power plant and PKP. We are more optimistic about the prospects for 2015. We have also noticed a change in the attitude of our Clients and their understanding of the situation – recently signed contracts are more profitable”.

 

The Impel Group’s consolidated operating profit totalled PLN 53.1 million in 2014 and was higher by 27% than the last year’s figure. We can be pleased by the fact that an increase was achieved, despite the reduction in subsidies by more than 20% for an average disabled person, in effect since 1 April 2014, directly increasing the costs of labour.  

 

Wojciech Rembikowski, Vice President of Impel S.A., stated that “The difficult and changeable legal environment of our business causes that an improvement in efficiency represents the critical element of all undertaken activities. The results of 2014 show that such approach has proven beneficial”.

 

In 2014, the Impel Group’s consolidated net profit amounted to PLN 30.4 million, outperforming the figure recorded in 2013 by more than 80%.

 

Grzegorz Dzik, President of Impel S.A., explained that “In 2015 we intend to enhance the economic efficiency by the use of operational synergies and the development of increasingly complex service packages and to proceed with consolidation through capital mergers and strategic alliances. We want to continue the specialisation in the area of highly processed services, defined as business process outsourcing. It should be noted that in 2014 an IT company specialising in SAP implementations joined our Group. At present, our Group is looking for innovative solutions in each area. We anticipate the development of the segments relying on the wider application of advanced technologies. We believe that as a result of legislative changes other evaluation aspects, apart from the price, will gain in significance in public procurement procedures, which will translate into better pay conditions for employees, and thus into the quality of provided services. It will stabilise significantly the Group’s situation”.

 

It has to be remembered that in 2014 a change in the social insurance system occurred, imposing social security contributions on civil law agreements up to the level of the minimum wages, which, as a result of wide-ranging discussions between representatives of the business environment and the legislator, will come into force on 1 January 2016, after a one-year period of vacatio legis. Concurrently, while the works on social security contributions applicable to civil law agreements were progressing, the possibility of valorisation for ongoing contracts was introduced and in the case the client and the contractor fail to reach an agreement, the contract can be terminated without any negative consequences for the contractor. In new public procurement contracts the price will no longer be the only criterion for selecting the bidder. The provisions of law will be in effect that will make it possible to terminate a contract concluded on the basis of the Public Procurement Law in the case where the parties thereto are unable to agree on a change in remuneration related to the increased costs of labour.

 

Wojciech Rembikowski, Vice President of Impel S.A., commented that “Legislative changes restore the order in the market to a considerable extent and create more favourable conditions for the development of companies that rely on a large base of employees and seek contracts through public procurement procedures. I am convinced that it will be reflected in the Impel Group’s increased value. Furthermore, together with Simon-Kucher & Partners, a consulting company, we have developed a new strategy for sales and the provision of services in the Group. We will present to the market a new pricing policy and a product offer that will ensure the enhancement of quality of provided services and business profitability. We do care about an improvement in the image of the whole outsourcing market, where we have had the unquestionable leadership position already for 25 years.”

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Impel strengthens its foundations. Increase in profit and more stable legislation. (189.83 kB)
In its consolidated annual report for 2014 the Impel Group disclosed an increase in the operating result by more than 27 percent. The largest provider of outsourcing services in Poland recorded also an increase in sales and net profit.