The good oil

Date: 14 Jan 2014

Bellingham Wallace

From our first meeting I was confident Bellingham Wallace were what I had been looking for - Bob Weston
Entec is in the hot spot of the oil and gas industry and with the demand for energy in New Zealand expected to at least double before 2050, Entec's future looks positively growing. Bellingham Wallace are proud to provide accountancy and business advice to such a forward thinking company.

Since oil was first found to be flowing off the coast of Taranaki nearly 150 years ago, the oil and gas industry has grown to become New Zealand's fourth largest export sector, pumping $2.5 billion into the economy each year.

Turning the wheels of the industry is no small undertaking, requiring not only a significant investment in state of the art infrastructure and equipment but also the engineering know-how to make sure the lights stay on.

Entec is one such company and has been helping power New Zealand's energy industry since 1982. Its core business has predominantly been focused on the provision of mechanical services to the oil and gas industry, together with some interesting project work in the area of renewable energy.

Managing Director Bob Weston says the company has worked with city councils and waste companies from around the country to successfully generate power from their local landfills. "Our job is to design, supply, install and commission the plants that make all this possible," he says. "A landfill project we worked on for the Dunedin City Council last year is expected to reduce their electricity bill by $350,000 per year."

A landfill project we worked on for the Dunedin City Council is expected to reduce their electricity bill by $350,000 per year

The methane produced as the unwanted rubbish breaks down has more than 20 times more impact on climate change than regular CO2, so projects like these also have huge environmental significance.

Organic growth came naturally as word got out about the quality and integrity of Entec's work. However, the company had bigger plans and a few years ago it started on an aggressive growth path, through acquisition, to expand its portfolio.

"We recognised an opportunity to broaden and strengthen our business by diversifying into specialised instrumentation, electrical and gas detection services," Bob says. "This has given us access to projects that were previously out of reach, such as the construction of significant new infrastructure expansion projects with key customers such as Methanex, Origin Energy and TAG Oil."

However, the rapid increase in revenue and the growing complexity of the business brought with it a new set of challenges. Entec has since been working with specialist accountancy firm Bellingham Wallace, which has provided significant input into the company's strategic direction, acquisition pathway and governance structure.

"There wasn't one particular issue that we were facing, but I was conscious that I had a business that was growing quickly, and that I needed some external input to make sure it remained robust during this journey. From our first meeting I was confident Bellingham Wallace were what I had been looking for," says Bob.

Bellingham Wallace Director Mike Atkinson says the partnership has been growth focused from the start. "We have been working with Bob to unlock further growth potential and to provide some guidance and rigour to their strategic and financial planning."

First off the mark was a strategic planning session with Entec's leadership team. Out of this came clear financial goals for the next five years as well as a plan to ensure the company's internal infrastructure had the capacity to handle future growth.

 

Entec Power Gen Power generation from landfill gas at Hampton Downs Landfill

 

"It's a sad truth, but often when companies get a chance to supercharge their growth, they fall short of evolving their back room procedures to keep up with their revenue gains and growth opportunities," says Mike. "Entec recognised the importance of having better forecasting and reporting."

Bellingham Wallace senior accountant Asha Tierney has been instrumental in implementing a more rigorous reporting format as well as top class forecast models that have allowed Entec to increase its bank facilities to fund its most recent acquisition, a Taranaki-based industrial maintenance specialist called Total Automation.

"We have really benefitted from Mike and Asha's insight and experience during this journey, particularly when it came to making sure all the necessary due diligence had been done," Bob says.

With the company firmly in growth mode, Mike has also helped implement an advisory board to attend to strategic and risk matters.

"We worked with Bob to put in place the appropriate governance framework, provided some recommendations regarding the initial appointments and chair the company's board," Mike says.

"Entec has since adopted a very powerful mindset by acting as the company it wants to become, not the company that it currently is." And Bob wants the best people on his team.

"The labour market is getting even tighter in our specialist fields, so attracting and retaining the best people is critical. This starts at the top and our strengthened governance structure has proven to be an asset so far."

Today Bob and the team meet monthly, with Mike fulfilling his role as a sounding board and providing strategic advice while Asha keeps her finger firmly on the financial pulse, to ensure Entec remains on the path to sustainable growth.

Bob is pleased with the results. "We've already noticed a positive difference since working with the accountants at Bellingham Wallace and it's been satisfying to see the professional growth of our in-house accounts person."

Entec is now well-positioned for continued growth. "There are some exciting opportunities ahead for Entec in a range of markets that will ultimately future proof the company," Mike says.

With the demand for energy in New Zealand expected to at least double before 2050, Entec's future looks positively glowing. Visit Entec's website www.entec.co.nz. Contact Mike Atkinson to find out how Bellingham Wallace can make a positive difference to your business.

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