Macquarie Drilling Ranking: 46
Founded by Dr Michael Petrozzi, Macquarie Drilling returns to the fast 100 this year after ranking 53 last year. Revenue is growing strongly, rising to $21 million from $12 million last year. Petrozzi expects turnover to double over the next year. Macquarie Drilling moved its rigs from other areas into the mining sector once the boom took hold. Petrozzi says cash-flow management, safety and staff are the key determinants of success in his industry.
"There is no shortage of people," he says. "There is a shortage of people you know, trust and who understand the business."
Satisfying client demands is also a challenge given the market conditions. Rather than turn away clients, Petrozzi says he prefers to manage their expectations. "You don’t say ‘no, go away’,"Petrozzi says. "It is a case of being open with them and advising them of our capabilities." Building the confidence of clients is critical. "Clients have very high expectations," he says. "They are not inclined to have you learn on the job. They have productions targets so as a contractor you have to perform."
GET THE MONEY RIGHT - Thinking outside the bank is just one of the lessons learned by the BRW Fast 100 companies.
Raising the right sort of capital in the right way is often the greatest challenge facing emerging companies. A company may be successful in the marketplace but if it has raised the wrong sort of equity or relies too heavily on the bank debt and the bank calls in its loans, it can still fail. What Petrozzi says he has learned from being in the Fastest 100 growing companies in Australia is "the company had to learn to use longer-term facilities with less ‘cash impact’. "We own a lot of our gear and we have a lot of equity on that basis, so we don’t need very high rates of repayment," he says. "In the early days, we used cash flow to buy assets and a lot of our hire purchase agreements were too short." He says the company has moved from two year facilities to five-year facilities. The company’s net debt to asset ratio is 35 per cent. "We are doing a lot of it from retained earnings." Petrozzi says he is moving away from banks. "The equipment finance people are much more able to do better deals."