INTERVIEW
Shaun Doak
React Group
React Group Plc isn’t your typical cleaning company. Alongside conventional services like the regular commercial cleaning of windows, facilities and facades, it looks after what you might call ‘extreme’ cases: ad-hoc specialist cleaning of crime scenes, railway fatalities and biohazards.
A global pandemic understandably made for interesting times, given the latter, but React doesn’t owe its position as the UK’s fastest-growing cleaning provider to Covid. Instead, it is a classic business turnaround story.
When Shaun Doak joined the AIM-listed company as MD in March 2019, React was turning over £3.3m, but making an operating loss of over £600,000.
“We were always very good at delivering the service, and had a great portfolio of blue-chip and large facilities management customers. But our back office function was lacking – we didn’t have the correct people, systems or procedures to facilitate the CRM [customer relationship management] required for growth – in all honesty it was a bit of a mess,” says Doak, who became CEO in February 2020.
A two-pronged turnaround
His first task was professionalising the business, bringing in key people and processes across the board. Doak integrated sales and marketing, improving campaign efficiency so the team could spend more time with customers, to understand their challenges.
It paid off as expected, with organic growth averaging over 20% since 2020. For the first time in years the company was profitable too, which enabled the second phase of Doak’s turnaround strategy: strategic M&A.
After raising £1.25m through the public markets in June 2020, React bought West Midlands-based contract cleaner Fidelis in 2021, and a market-leading UK-wide commercial window and cladding cleaning company LaddersFree in 2022.
The logic was to create a more reliable revenue mix. As the name ‘React’ suggests, the company’s historic specialist cleaning business relies on contract reactive (irregular work under an on-call framework) and ad hoc work.
“We were lacking recurring revenue through contract maintenance work, and Fidelis gave us almost £5m of recurring revenue straight away,” Doak says, adding that recurring revenue has risen to 87% of the group’s total, from one third. He also correctly believed that the team could professionalise their new acquisitions much as they had React’s core business.
A platform for future growth
Fidelis has been a particular success, increasing revenue so quickly that it had to pause sales and marketing for six months last year as it expanded its capacity and made the necessary improvements to facilitate the growth. Divisional sales still doubled since acquiring the Fidelis business in 2021.
Including M&A, React Group grew at a compound annual rate of 77% between 2020 and 2022. Its annual results ending September 2023, published outside Growth Index’s reporting period, showed 43% sales growth to £19.6m, with adjusted EBITDA hitting a record £2.3m.
So did the short-lived Covid-era obsession with cleanliness make any difference? Doak paints a mixed picture, with new Covid decontamination assignments counteracted by declining contract reactive work in the judiciary sector (with fewer arrests, for example) and less ad hoc work as lockdown shut buildings across the nation.
Where the pandemic really helped was exposure, lifting React’s brand to the forefront of the industry. The group is actively looking for further M&A opportunities, but next time is likely to use its own cash reserves.
“We’ve got the model right with Fidelis, and think we
can do similar, smaller acquisitions in different locations. We’re also focused on specialist players,” Doak says.
“My target is for us to achieve over £5m free cash-flow per annum within the next three to five years.”
