Torre’s business model involves the value added sale and rental of branded capital equipment, the distribution of high quality aftermarket parts and the delivery of critical support services to our customers expansion programmes.
We are highly focused on the expansion and optimisation of our subsidiaries. In this regard we focus on:
- Product mix and business model;
- Customer spread and sector diversification;
- Geographic expansion; and
- Integration with other group subsidiaries in order to share resources and infrastructure
In addition to our organic growth strategy, we are committed to a systematic acquisition strategy. All potential transactions must meet the following criteria, amongst others:
- Target companies must operate in identified market sectors in which Torre seeks to operate and must have an established market position with the inherent ability to grow sustainable earnings and cash flow once they become part of the Torre group
- Transaction must be earnings accretive for Torre shareholders within the first year; and
- Torre should have a high degree of confidence in the forward earnings profile as a result of the deal structure or the contractual nature of future revenue forecasts.
The Torre business model has already evolved from one that was driven primarily by acquisitive growth to one that is focused on organic initiatives, with acquisitions as an additional growth engine. Over time it is expected that the growth attributable to acquisition activity will continue to decrease as a proportion of the overall growth of the business.
Torre has a decentralised operational management philosophy. The managing directors of each operational entity are given autonomy to run their businesses within the framework of an authority matrix that has been established by the Torre board.
The managers are monitored against agreed KPI’s that combine a focus on profitability and cash generation with longer term strategic initiatives, including BEE compliance, that are required in order to ensure that each of our businesses maintains a durable competitive advantage.
The role of the Torre head office is to support our subsidiaries in order to maximise performance and shareholder value. In order to achieve this we centralise certain functions where economies of scale can be realized and where high levels of capacity and expertise are required which are not normally found in the medium size businesses that we typically acquire.
The key functions that are centralised are:
- M&A and Capital raising