BENNETTS BUOYED BY MORGAN STANLEY CHILDCARE DEAL

Written on the 26 March 2015 by Nick Nichols

BENNETTS BUOYED BY MORGAN STANLEY CHILDCARE DEAL

WHEN Morgan Stanley bought a fledgling childcare centre developer earlier this year, the fortunes of Gold Coast businessman Robbie Bennetts took a turn for the better.

Bennetts, the founder and former CEO of Professional Investment Services (PIS), has been forging a new path in diverse fields in recent years with a strong focus on IT services through his onPlatinum ICT.

The business operates in a sector that is growing in importance for businesses looking to cut costs and streamline backroom operations by pooling their telco and technology needs under a single umbrella.

OnPlatinum was established three years ago and has taken a pragmatic approach to the confusion that still surrounds IT, particularly with cloud systems.

"We have won a lot of business by offering both traditional IT and cloud solutions," says Shannon Overs, onPlatinum's chief information officer and a team member who has been with Bennetts since the PIS era.

"In some cases we provide a traditional solution and then hold the clients hand as we move them into the new era of cloud-based solutions. It's essentially about taking the big corporate mentality and making it affordable for smaller businesses."

The growth of the sector was reflected in Telstra's latest profits which showed its IT services division posting more than $1 billion in revenue for the first time up 18.1 per cent from a year earlier.

Jay Newcomb, the onPlatinum ICT solutions manager, says Telstra's results highlight a broad trend by businesses both large and small who are looking for a unified approach to their technology needs.

Telstra is one of the companies onPlatinum competes against, although its growing client base, which includes the Frizelle Automotive Group, is increasingly making that task easier.

Earlier this year, onPlatinum's profile was buoyed by a childcare business buyout deal that was led by global funds manager Morgan Stanley.

The deal struck between Morgan Stanley Real Estate Investing and the Brisbane-based Australian Childcare Projects (ACP) is expected to drive significant growth for onPlatinum over the next four to five years as ACP ramps up plans to build between 20 to 30 childcare centres a year.

This represents a development pipeline of between $50 million and $100 million a year with the centres to be managed by listed Gold Coast childcare centre operator Affinity Education Group (ASX:AFJ).

ACP chief executive Craig Napier says that with the backing of Morgan Stanley the group is targeting areas of undersupply, arguing that market growth remains robust in key regions.

"The opportunity to provide services for child development is a fantastic space to be in," says Napier, who has extensive experience in the childcare sector.

"The Morgan Stanley balance sheet also offers scope to accelerate our growth and take a freehold position."

ACP, which operates the Petit Early Learning Journey and the Master & Miss Early Learning Academy brands, has 12 childcare centres on the eastern seaboard with a total of 1300 childcare places.

Napier says the agreement with onPlatinum, which was in place prior to the Morgan Stanley buyout, will complement the company's growth plans.

"We aren't large enough to have an in-house IT department, and we don't have the expertise, so it made sense for a fledgling business like ours," he says.

The onPlatinum team currently manages the IT services of two new ACP childcare centres, but it is currently preparing for the rapid growth expected from the agreement.

"Our role is everything for the site from internet connectivity, to iPads, computers, phone systems and photocopier, then brining that back to their offices in Broadbeach and Brisbane, the head office," says Overs.

Robbie Bennetts Enterprises, along with James Cooper and Greg Whimp, last year teamed up with the Qantas Frequent Flyer program to create the Qantas Golf Club.

Bennetts' head office now has a total of 17 staff. Eight of them are in IT alone and the company has just added two new staff to handle growing volumes.

The company also has investments in manufacturing, financial services and marketing, all with their own separate workforces on the Gold Coast.

OnPlatinum, which was established three years ago, has doubled revenue over the past six months. This comes after a significant outlay by Bennetts in the first year developing systems.

"The second and third year we have been building a reputation in south-east Queensland and now have clients ranging from Cairns to Adelaide," says Overs.

"Everyone's trying to save money at the moment, so we get a lot of referrals. We do have some big companies on our radar, but we're being somewhat strategic about who we are dealing with."


Author: Nick Nichols

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