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Crest Licensing Systems Ltd
Profile
 Crest Licensing Systems Limited is a high growth licensing company with a proven business
model, established cashflows, and clear expansion opportunities.
Crest Licensing Systems Limited ('CLSL') generates multiple income streams from owning
licensing systems. The popular terminology is franchising. Revenues are derived from
royalties on turnover, franchise sales, master franchise sales, and interest on financing.
The Company is expanding its licensing businesses in the domestic market by opening
new regions and launching new franchise concepts under the Crest brand. The Company
will seek to position itself as a holder of a portfolio of licensing concepts. It aims to deliver
shareholders profits from multiple licensing systems.
The Deloitte / Unlimited 2001 Fast 50 Index ranked Crest as New Zealand's 25th fastest
growing company. Crest achieved 36th place in the 2002 Deloitte / Unlimited 2001 Fast 50 Index
and 42nd in the 2004 Deloitte / Unlimited 2001 Fast 50 Index.
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"Crest's exemplary dedication to achieving growth
is evidenced by its regular placements on the
Deloitte/Unlimited Fast 50 index, a ranking of the
50 fastest growing firms in New Zealand,"
said Brent Chambers, Partner, Deloitte.
"We salute Crest's exceptional accomplishments
in today's very competative marketplace."
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The Company is experiencing strong growth and has established a robust licensing
business model in New Zealand. It is looking to expand its New Zealand presence further
and also target Australia with the sale of state licences. In the longer
term, the Company aims to expand into the Asia Pacific region by selling country licences for
its proprietary systems.
The Company's board of directors are experienced, qualified and have a broad range of skills well suited to
the group's business. The board has established a Corporate Governance protocol.
This company provides shareholders with the opportunity to gain exposure to the dynamically expanding franchising sector.
With significant established cashflows and revenue streams, CLSL is well positioned to follow its business plan of
becoming a multi-faceted licensing company, delivering shareholders higher than average returns. |
| The Company
 Crest Licensing Systems Limited was incorporated in October 2000 to act as the holding company for Crest
Commercial Cleaning Ltd and Franchise Finance Ltd. CLSL's subsidiaries generate multiple income streams
from franchise sales, master franchise sales, royalties on turnover and interest on financing.
Crest Commercial Cleaning Ltd ('CCCL') is an
established franchise company that provides services in the commercial cleaning sector. It is represented
in Auckland, Hamilton, Tauranga, Rotorua, Taupo, Wellington, Christchurch, Dunedin and Invercargill. CCCL began operations
in 1996 and has a website at www.crestclean.co.nz. CCCL is profitable and experiencing strong growth. CCCL's
franchisees are security vetted owner-operators offering high quality commercial cleaning services to SME's,
corporate property companies, property managers, schools, institutions and corporates.
By October 2004, CCCL had 131 Franchisee's and 8 master Franchisees. This company is under an expansion plan that
will see it open new regions in New Zealand during the 2003 year. The meduim term goal for this subsidiary
is 250 franchisees.
 Franchise Finance Ltd, also incorporated in October 2000, is a specialist finance company that provides
loans to franchisees to facilitate the purchase of a Crest franchise and related equipment. The provision
of financing creates another revenue stream for CLSL. |
| Corporate Structure
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| Mission and Vision
CLSL's mission is to be the most successful and recognised licensing company in New Zealand. The mission
will be achieved through continually striving to improve systems and service levels, increasing earnings
and profitability for franchisees and shareholders, attracting and retaining intellectual capital from
industry experienced master franchisees, and conducting business with high ethics, integrity and professionalism.
The long-term mission of the Company is to be recognised as a successful international franchisor with
licensing activities in Australia and other countries in the Asia Pacific region. |
| Statement of Corporate Governance
Overview
The board of CLSL is committed to introducing corporate governance principles to the operation and
management of the group. The guiding values of the Company are: high ethics, integrity and professionalism.
The board of directors governs the Company in the best interests of all shareholders, and it is vested with
building shareholder value. The board is responsible for the proper direction and control of the Company's
activities, including setting
strategic direction, approval of significant expenditures, policy determination, stewardship of the
Company's assets and monitoring of performance.
Constitution
CLSL has adopted a new company constitution, which is similar to a listed company's constitution. By adopting
this constitution the Company is readying itself for a later main board listing. The constitution affords
shareholders with various protections.
Chairman
The directors have recently appointed an independent director, Mr Martin Perkinson, to chair the CLSL board.
Martin is an experienced director who will provide considerable value to the Company.
Meetings
The board meets six times per year. In addition to reviewing normal operations of the Company, it approves
strategic plans and operational budgets.
Appointments
The board currently comprises four directors, including an independent chairman. It may consider the appointment
of up to two more independent directors in the future, to broaden the mix of skills and experience and to add
value to the operations of Crest.
Reporting
The board reports on a six monthly basis to shareholders and to the market. Additionally, further
updates will be emailed and posted on this website The board recognises the importance of disclosure for market
analysis, and it submits information for broker and institutional analysis. |
| Future Opportunities
CLSL's key growth opportunity lies in the establishment of new "Crest" branded franchises, and the
further expansion of CCCL's business by opening new regions in New Zealand. In the long term there is a clear opportunity
to export licence systems to Australia
and the Asia Pacific region.
CLSL is investigating a number of new franchise developments aimed to diversify the markets serviced. These new
developments will provide an opportunity to cross sell services to CLSL's existing customer base and offer packages
of services. The Company will continue to develop and expand the support systems and training programmes for
existing franchisees in New Zealand. The ability to offer finance to potential franchisees will serve to accelerate
the growth of the franchise network.
The Company also has an opportunity to use its accumulated knowledge in managing licensing businesses to secure
country licences for international franchise brands not currently represented in New Zealand.
CLSL will also investigate acquisitions of other companies that present an opportunity to grow revenues and
gain strategic advantages. The Company will look for acquisitions where it has expertise or can partner with
expertise, and where it can add value by influencing the strategic and operational direction of the companies. |
| Customer References
"Crest Commercial Cleaning Ltd have been cleaning
our offices for the last two years and during this time
we have found their services to be of a very high
standard.
The franchisees who carry out our work have been
going the 'extra mile' in their cleaning, which is very
satisfying. We recently doubled our work area and the
cleaning was expanded very smoothly at the same
standard."
Denis Paterson
Premises Administrator
South Link Health Inc |
"We have contracted Crest Commercial Cleaning Ltd for
three years to clean the majority of our school.
I have been very impressed with their level of service
and performance, in terms of both the company and
the franchisees themselves.
A concern for all schools is the security and locking up
of buildings. Our cleaners have proven themselves to
be professional and trustworthy in all facets of their job,
I have no hesitancy in recommending them to other
schools or companies."
Bryan Raymond
Principal
Mosgiel Intermediate School
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| Strategic Alliances and Associations
 CLSL is pursuing strategic alliances with corporate property companies, facilities management,
and other property service providers in order to develop a high quality integrated service.
This concept offers one point of contact for a basket of services. There is an opportunity
to provide better management of services via the franchise business model.
 The Company is a member of the Security
Association of New Zealand and is registered
with the Registrar of Private Investigators and
Security Guards as a security company. All franchisees
hold certificates of approval as the
responsible employee (contractor) of a security
company.
The Company is also a member of the Franchise Association of New Zealand. The Association
promotes a Code of Practice and a Code of Ethics by which all its members must abide. There
is no specific franchise legislation in New Zealand, however the Association's Codes provide
for an independent scrutiny of relevant material, and a full disclosure of information to potential
franchisees in order to allow them to make realistic and informed decisions. |
| Intellectual Property
CLSL has its brand name registered in New Zealand, and it has two registered trademarks, being
the Crest shield, and the Crest horse and shield logotypes. |
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| Profile of Directors |
| Chairman |
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Martin Perkinson, M Com (Hons), C.A. DipTchg
For 29 years until 2000 Marty Perkinson lectured at the University of Auckland, for the last five years as director of the Graduate Diploma in Business Programmes. He then became an Adjunct professor at UNITEC. Marty has a huge amount of practical and commercial experience, having owned his own businesses and been on the board of several small to medium sized companies. He teaches the very popular “Understanding Accounting” short course at the University of Auckland Business School, where he is consistently rated as an outstanding teacher. |
| Executive Director |
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Grant McLauchlan, B. Com, C.A.
Grant is a Chartered Accountant. He is also the managing director of subsidiary Crest Commercial Cleaning Ltd. As a founding director of Crest, Grant has guided the company’s development from a concept back in 1996 to the healthy business it is today. Grant has led the development and implementation of the company’s financial and information systems. He’s responsible for the overall growth and direction of the company, and implementing business plans as set by the board. Grant has a wide experience in accounting, finance and business development. He is a strong supporter of the franchise sector. |
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The Company has indicated it is willing to appoint further independent directors to the board
provided they bring an appropriate mix of skills and experience and can add value to the operations
of Crest. |
| Directory and Advisors |
| THE COMPANY
Crest Licensing Systems Ltd
Level 1, 401 Moray Street
PO Box 740
Dunedin
Tel - 0800 273 780
Fax - 0800 273 781
info@crestsystems.co.nz
AUDITORS
PricewaterhouseCoopers
Forsyth Barr House, The Octagon
PO Box 5848
Dunedin
Phone (03) 477 8784
Fax (03) 477 1186
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SOLICITORS TO THE COMPANY
Anderson Lloyd Caudwell
Level 9, Otago House
481 Moray Place
Private Bag 1959
Dunedin
Phone (03) 477 3973
Fax (03) 477 3184
ACCOUNTANTS
GS McLauchlan & Co
PO Box 743
Dunedin
Phone (03) 477 8192
Fax (03) 477 2450
BANKERS
National Bank of New Zealand Ltd
11 George St
Dunedin
Phone (03) 474 6734
Fax (03) 477 3195
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| Glossary
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| CLSL |
Crest Licensing Systems Ltd, (or the 'Company', or 'Crest'). |
| CCCL |
Crest Commercial Cleaning Ltd, a subsidiary of CLSL |
| FFL |
Franchise Finance Ltd, a subsidiary of CLSL. |
| Royalty |
A percentage of the income derived from the
revenues of licensed or franchised business
units and systems that is paid to the owner. |
| Licence |
An agreement that gives permission to a specific
person or group to own something or do
something. |
| Franchise |
An agreement or licence to sell a company's
products exclusively in a particular area, or
to operate a business that carries that company's
name. |
| Licensor / Franchisor |
A company that grants somebody an exclusive
licence to sell its products or operate under its name in a stated area. |
| Franchisee |
A person or a company granted a licence to
sell a company's products or operate under a
company's name exclusively within a stated
area. |
| Master Franchise |
The right and obligation to open and operate
a certain number of franchise units in a
defined area, and the right to sell franchises
to other people within the territory. |
| Country Licence |
The rights or exclusive licence to operate a
franchise system in an area defined by a
country (or state), and the rights to sell
master franchises and franchises in the
defined country (or state). |
| SME |
Small and medium sized enterprises. |
| The words licensing and franchising are often interchanged in modern language.
from Encarta® World English Dictionary © 1999 Microsoft Corporation. |
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