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OES grows 383 per cent a year to top Fast 100

18 December, 2015

This article was was originally published by BRW.

Australia’s fastest-growing company over the past three years is a joint venture between Swinburne University of Technology and online employment giant SEEK.

Known as Online Education Services (OES), the business has grown at more than 380 per cent a year since 2011-12, delivering tertiary education to more than 5000 students, three-quarters of whom are studying part-time, and one in four of whom live in regional and rural locations.

After Swinburne and SEEK each contributed $5 million four years ago, OES was cashflow positive almost immediately and turned over $78.7 million in 2014-15, but general manager Mark Doughty says the JV is likely to soon require a fresh cash or debt injection to fund further growth.

While the online education market is booming, Doughty admits that being owned by both a large corporate and a university creates a dilemma when the needs of each shareholder are so different – OES was, after all, Australia’s first public-private partnership in online higher education.

“The board and management team work hard to ensure both parties receive constant communication and early involvement in decision making,” he says.

Now in its 26th year, BRW’s Fast 100 ranks entrants’ revenue growth based on auditor-verified data from the previous four financial years. This year, entrants must have turned over more than $500,000 in 2011-12 to qualify, and must be Australian-owned.

“The board and management team work hard to ensure both parties receive constant communication and early involvement in decision making”
Mark Doughty, General Manager

Metro Property Development’s 2014-15 turnover of $492.5 million, up from $176.5 million the year before, was enough to place it second on this year’s Fast 100. Metro has 50 sites on its books across the country, including a recent $120 million housing deal with Adelaide Pony Club.

Chief executive Luke Hartman attributes the growth partly to greater foreign investment and the company’s ability to forecast market trends.

“We can put some of our success down to the selection of our sites and those sites coming on to the market at the right time to maximise our return. We have also continued to adapt and change to market pressures,” Hartman says.

“There’s enough sites within close proximity of the cities around the country in areas we’re focused on out there to fuel our intended growth, and we see very good buying opportunities in the market.”

Metro has also expanded its senior debt funding partners, which has managed risk and enabled it to get the best possible deal on debt. “You don’t want to be beholden to one lender,” Hartman says

Third on 2015’s Fast 100 is national data centre NEXTDC with 238.5 per cent average revenue growth over the past three years. The firm is experiencing strong momentum on the back of the extraordinary rate of adoption of cloud computing, chief executive Craig Scroggie says.

“The requirement for data and IT services to be hosted within the Australian jurisdiction has been a major topic for our industry and a driver of foreign investment in domestic capacity.”

Since its launch in 2010, NEXTDC has built five next-generation data centres and a partner network of more than 200 enterprises.

Meanwhile the continuing growth of online shopping is fuelling growth for 2015’s fourth-fastest growing company, Pet Circle.

The pet etailer’s chief executive, Michael Frizell, says his biggest challenge is educating Australians that the pet vertical is “shoppable” online.

With a $3 million capital raising from last year, he is eyeing the more established market in the United States.

That raising was also used as an opportunity to ‘collar’ some of Pet Circle’s founding team, which included the likes of a founder of Groupon and former financial controller of Virgin Mobile, with an employee share scheme.

There have been no capital raisings at all for the Fast 100’s fifth-ranked firm, NGage Technology Group, which doubled its revenue to $13.3 million in 2014-15 despite funding it “on the smell of an oily rag”, according to director Jarrod Bloomfield.

One of the positives of not raising capital through investors or banks is that the founders of the end-to-end IT solutions providers retained full control of the direction of the company.

“The key learning from the early days would be to not sweat the small stuff, to know that we’re going to make it and try to minimise the doubts and fears that did arise at different times,” Bloomfield says.

The start of its fourth year resulted in a couple of consecutive softer months of sales, which coincided with investment and expansion into a larger facility.

“The timing of the move couldn’t have been worse,” Bloomfield says.

However he says the NGage team “went back to basics in terms of existing customer service”, which ended up being a blessing in disguise because the firm generated record revenues in the second half of 2014-15.