Proactis Holdings Plc (LON:PHD) Chief Executive Officer Rod Jones caught up with DirectorsTalk for an exclusive interview to discuss their agreement with Flintshire County Council
Q1: First off, can you explain the significance of the recent Flintshire County Council announcement?
A1: Yes, if you remember a couple of months ago we announced the deal with Screwfix and Screwfix is a very go-ahead sort of company whereas a county council has got a sort of different connotation to it. So this is Proactis Holdings’ strategic initiative that brings through electronic trading to the supplier base of our customers and charges them a very small amount of money, non-tariff based, to get some significant benefits, the first valuation of the concept from a forwarded thinking public sector body really, and they’re looking at innovative ways of generating income for themselves as part of this process.
Q2: What are the deliverables and how will it affect the council and its suppliers?
A2: Well firstly we’re providing some very innovative software and some software extensions that enables suppliers to adopt self-service, much like we did in our private lives ourselves, and so this is going to allow customers to, if you like, trade electronically and this is enforcing and enabling that to thousands of supplier relationships that the council is having to manually manage. It will provide some real added value services to the supplier including electronic invoicing and giving the account visibility where their invoices are and the due date on that visibility. Secondly so we’re providing a pretty revolutionary non-contracted ‘spot offer’, if that’s the right term for it, that allows suppliers to have that accelerated payment so they can support their own working capital position so that’s pretty unique because it’s our first ‘spot offer’. Obviously the council if they wish to can see obviously the benefits of the automation and efficiency savings from the supplier records and electronic trading but they can also benefit by participating in that accelerated payment plan, on a non-contracted basis as well so it’s a good deal all round.
Q3: OK, what kind of scale are we talking about in terms of opportunity that’ll be provided by the agreement?
A3: It’s always a bit of a rattle when you try and work out how many suppliers people have got but we estimate that conservatively Flintshire have 5,000 suppliers and the amount of spend going through those suppliers is about £130 million per annum. So we estimate that what we’re going to be able to do by this agreement is to improve our revenue from each client by five times, possibly as much as ten times, the current account spend with us and these ratios would apply in principal with every other client commitment we have so it’s a great proving concept when we have close on 500 public sector clients. Obviously the council want to protect their investment going forward so they’ve agreed a five year extension on Proactis Holdings’ software and everything else going forward so that’s pretty good as well.
Q4: What’s the timing for the project to go live?
A4: Could be pretty quick, we’re still working on a few of the final configurations and tweaks to the system to make it really efficient but we should have it rolled out and complete by the end of our financial year which is end of July so we’ll be on track with our internal targets, proof of concepts and things like that.
