Report from the CHIEF EXECUTIVE: Selvan Govender | Annual Report 2022
The past year has been extremely rewarding with new milestones reached and surpassed.
The important work we do as a consortium is a consequence of our joint collaborative efforts, and I am very proud of and grateful for the support of our Member and Supplier community, and our PURCO SA team.
The Consortium achieved exceptional results in 2022.
We breached R2.2 billon in spend through our contracts, achieved cumulative savings in excess of R2 billion, and delivered strong financial results on the back of concerted attention to our core mandate.
2022 was a particularly busy year, with much effort invested in supporting our Members while re-affirming PURCO SA’s role as a bulwark against rising costs, limited resources and the repercussions of the pandemic.
ISO 9001:2015
Our ISO certification confirms that our organisation consistently provides products and services that meet internationally recognised quality, customer and regulatory standards.
PURCO SA successfully completed our 3-yearly ISO 9001:2015 re-certification assessment in 2021.
MEMBERSHIP
We value our Member institutions. The 27 public universities in South Africa and Namibia, three private Higher Education providers and thirteen Members from research, standards and associated bodies continued their longstanding support.
There was some movement with TVET colleges, but with the addition of new Members we ended the year with 22 TVET Colleges enrolled. Two additional colleges joined shortly after year-end.
Membership growth is testimony to the quality of our systems, and the important role that we play in saving our Members money and making their jobs easier.
Once again we were able to deliver auditable, procedurally sound processes and ensure there were no finding made by the Auditor General in regard to our work with TVET Colleges.
KEY FINANCIAL OUTCOMES
Although the financial year was conducted in the aftermath of the COVID-19 pandemic, the Consortium continues to surpass our 5-year Strategic Performance Targets, with strong year-on-year financial results.
Net Profit before Tax for 2021-2022 was 44.5% up on the prior period, while the R58.4 million after tax result was 43% up year on year.
In the face of the challenging environment we delivered a 45% increase in Surplus for Members. The record high of R59 million included R16.5 million from our PURQ business and a solid contribution from consulting work.
Our investments in the Consultancy Division and acquisition of the PURQ business continue to contribute positively to our finances, while offering Members value.
CONSULTANCY SERVICES
The PURCO SA Consultancy service was launched at the end of 2016 and has increasingly added value to Members each year.
Consulting revenue grew by 13% this year and contributed 18% to PURCO SA revenue. The division supported 15 institutions on a range of strategic and operational projects.
PURQ
PURQ, our wholly owned subsidiary, provides a centralised online platform for academic information.
Acquired in 2018, PURQ again delivered excellent value to our Members and their students during the past twelve months.
The subsidiary achieved annual revenue growth of 125%, and significantly increased the surplus due to Members from R5 million in the previous period to R16.5 million in 2021-22.
TENDERS
On average our team manages 1.2 tenders every working day of the year.
While our TVET business unit is responsible for the bulk of tenders managed by PURCO SA - 181 of 303 tenders in the period - our University Business Unit increased the number of individual tenders they managed by 37.5%.
Our efforts to engage with more prospective suppliers continues to be successful. On average 13 suppliers purchase each tender document.
ONLINE TENDERS GAIN TRACTION
The total number of tenders managed during the year increased by 4%, while online bid submissions were 73% higher than the prior year as Members and Suppliers adapt to the online paradigm.
Tenders with online bid submissions have increased from 36 in 2020 to 68 in 2021 and 95 in 2022, with more than 1000 individual submissions uploaded during the year.
Almost all tenders for University and Associated Members are managed online, and the system has proven accessible and user-friendly for both large as well as startup suppliers.
We are working to encourage TVET’s to leverage the efficiencies afforded by the e-Tender system.
The consistent year-on-year increases in online tender submissions reflect broader technology shifts and are a reflection of the system’s ease of use, security and standards compliance.
CONTRACT SPEND
Spend by Members via PURCO SA contracts was sharply up for the year, reaching R2.2 billion and exceeding the highest pre-pandemic amounts ever transacted through PURCO SA contracts.
Our TVET Members continue to grow their PURCO SA related spend. Their total spend reached R562 million for the year, up 16% on 2021.
SPENDING TRENDS
The top four categories of spend in 2021-2022 were Security, ICT, Catering, and Student Transport. The overall spend patterns are a strong reflection of students being back on campus.
• Security remains a key focus for Members, and is a category in which PURCO SA has developed strong expertise. Spend grew 12% YoY and 12.4% compounded since 2018.
• ICT, Catering and Transport are on a similar upward trajectory. Year on year growth was 47% for ICT, 46% for Catering and 68% for Transport.
• Travel related spend began to recover after the pandemic caused a dramatic decline in spend from R220 million in 2018 to R40.5 million in 2021. In the 2021-2022 period travel-related spend increased 62% YoY to R75.8 million.
• Office costs saw strong recoveries. Printing and copying increased YoY by 61% to R75.5 million while Stationery, Furniture and and Office increased R59.7% to R69.1 million.
SAVINGS EXCEED R2 BILLION
Savings derived from the use of PURCO SA-negotiated contracts grew 14.5% from R238 million to R272 million in the past 12 months.
Total rebates attributable to Members received a strong contribution from our PURQ subsidiary, resulting in a 45% increase to R59 million. In total, R2.1 billion in cumulative savings and rebates has been achieved for Members since PURCO SA began measuring savings in 2012.
TECHNOLOGY
Ongoing improvement and technology advancements are baked into the PURCO SA ethos.
A comprehensive redevelopment of the PURCO SA online ecosystem was launched at the beginning of 2022, and development is underway to launch the 3rd iteration of the integrated website, CRM, e-tender and contract management system.
MEMBER TRAINING
Changes in how Higher Education is delivered and the business pressures on suppliers has reaffirmed the importance of our Member training and supplier development initiatives.
Once again we rolled out sector specific training courses for our Members and hosted the 2022 Online Supplier Development programme for emerging suppliers from across the country.
Our ESD strategy is designed to empower small businesses so they can compete with established businesses while creating jobs and generating economic growth.
BURSARIES AND INTERNSHIPS
PURCO SA funded bursaries for six Supply Chain students at the Tshwane University of Technology in the past year, with the recipients potentially feeding into our PURCO SA Internship Programme.
The Internship Programme has been a success for the Consortium and the broader Procurement and Supply Chain sector. Our interns regularly take up permanent positions at PURCO SA or secure employment with Members or other organisations.
This past year two interns graduated from our programme and a further three were enrolled.
STAFF DEVELOPMENT
We are very proud that our staff are committed to improving their skillsets and academic qualifications.
This year I am particularly proud of Meshal Moonsamy, whose MBA dissertation has been selected for presentation to an international audience in Mauritius at the end of the year.
VIRTUAL EVENTS
Training courses for our Members and suppliers and online bid submissions are far from the only thing we have redesigned for online delivery.
We launched our new virtual PURCO SA Ponder series in the last quarter of 2021 andfFifteen Ponder events were hosted during the year, reaching 1413 attendees.
Ponder was implemented in response to the limitations on hosting face to face conferencing events, but has been such a success that it was retained when physical events resumed in 2022.
ANNUAL CONFERENCE
The 2022 PURCO SA Annual Conference was hosted at the Sandton Convention Centre in August, shortly after the end of the financial year. The event was a significant and successful come-back after missing two physical conferences due to the pandemic.
GOOD CAUSES
PURCO SA continues to support our preferred charity, the King’s Hope Development Foundation, through contributions of staff time, goods and funding.
This year we celebrated the King’s Hope 20th anniversary and were very pleased to be acknowledged as a long-term supporter. The Foundation does amazing work in supporting the Olivenhoutbosch community.
THANK YOU
I am grateful for the strong support from all our stakeholders during the past 12 months.
I extend my thanks to our community of Members and Suppliers, our National Office team, Regional Committees and our Board of Directors.
I am confident about our prospects for the coming year, and that we will continue to increasingly add greater value to the higher education sector, our Members and their supplier partners.
Selvan Govender
Chief Executive Officer