The SCV Group Australia's Toughest Village Job

On paper, Andrea Slingsby has the toughest job in the village industry. But with just 12 weeks behind the desk, she is already demonstrating she is up for the challenge and full of surprises.

Slingsby is CEO of SCV Group, Australia's largest village operator. Little known within the industry - largely because it runs rental, not DMF, villages - SCV currently operates 87 communities across the country. Also worthy of note is its projected operating loss of $27 million for the past 12 months - with no identifiable shareholders'funds remaining in the bank.

SCV markets under the original Sunny-Cove and somewhat infamous Village Life brands. Slingsby has moreover been quick to snap up the Village Care brand - bringing talent and systems, as well as the management of 18 villages, to SCV. She met with us at their offices in Maroochydore and revealed why she took the job - her "dream opportunity." "I come from Flight Centre, a high-volume / low-margin business, which was my home for 14 years, the last four of which were spent in the United States and Canada.

There are a lot of similarities between the two industries; my past experience has shaped me well for this role. Flight Centre is quite a mean and lean machine with a lot of expertise in a decentralised model that is highly replicable and scalable. I feel the same principals of business hold true at SCV. With Flight Centre, I started as a travel planner and then moved through the organisation to become the Global Human Resources Manager for the group. As we expanded the company, I was given the job of heading up all the North American operations and found myself living between Vancouver and Los Angeles.  My parents' well-being became a factor in the last few years - in my last 12 months in North America, I found myself commuting every two weeks back from the US to Queensland and something had to give. I decided to return to Australia  to be closer to my family, and soon commenced building a home between Brisbane and the Gold Coast. That was when I was approached to do some consulting work at SCV.

What I found were some fantastic backers who are truly committed to developing SCV as an expert in the asset management of seniors accommodation. There are two predominant groups of investors who identified the great potential of the SCV Group. The first is Michael Gordon and his Bydand Group; he started the Peppercorn child-care empire and then sold out at the right time to ABC. Also involved is boutique Sydney fund manager, Co-Investor. Specialising in drawing out the value of smaller listed companies, they are an investment vehicle for Melbourne's Smorgon family plus a number of others and have successfully re-launched companies such as travel.com.au

What we see here in Australia is a lack of understanding of the rental model's benefits. In North America, the rental model works really well across varying demographics - in fact, it is the dominant model. In Australia, the vast majority of villages operate under the DMF model. Yet, the reality remains that most Australians haven't planned adequately for their retirement. It is a little bit scary - only a small percentage of the population here are self-funded and then only to a small degree. With our rental model, they can sell their family home and have the balance to invest and use for the lifestyle of their choice while they rent with us. I believe we have to really educate Australians on the benefits of the rental market, plus broaden the range of attractive rental options for both consumers and investors. We need to create greater flexibility so residents and investors alike can pick and choose the services they want. This could potentially be a suite of userpays services, from basics like food and linen, right through to comprehensive options of lifestyle or care packages. It's all about freedom, a better quality of life and more choices for residents.

In my first few weeks at SCV, we set up an operating committee and developed a solid plan to move the business forward. This involved rationalising our staffing structure to optimise the outcomes for all of our customers and also refining our systems, processes and product range in each area. Every employee from the community level through to our head office staff has been involved in developing the new business plan. We are all engaged, excited and passionate about what the future holds for SCV Group. With 87 villages (prior to the acquisition of Village Care and its 18 management contracts), we now have a total of 215 staff, including village managers, 25 relief staff, nine regional managers and two catering specialists.

I believe in the necessity of really strong communications systems within a geographically diverse business - I am a communications nut. I have conference calls with our village managers every three weeks to ensure they are totally in the loop of what is going on in the company and get their input. We are quickly developing industry-best practice in all aspects of training, catering and community systems and processes. By September or October, you will see a much different company with a much different feel and buzz to it. Food is an example of where we create great value for our residents and investors alike. 50 to 60 percent of our residents are reliant on government pensions and rent assistance for income and are living on $180 - $200 per week. Our buying power allows us to provide a great range of menu options at a discount of more than 50 percent of what it would cost them if they purchased the same food down at Coles. Even so, we are currently trialing an exciting new range of menu options in South Australia and Western Australia as part of ongoing reviews and product improvement. The feedback so far on this new menu offering has been excellent.

There has been a lot of discussion about the Village Life group and its impact on SCV. The reality is that the Village Life model as it came across to us had many inherent problems. Basically it was a fairly distressed asset and the transaction itself was problematic in many ways - it has taken eight months of hard work to get  it all across the line. But that is now behind us and we are excited about moving forward to maximise the return on these assets for all of the investors. Our turnover is about $28 million a year.  We aim to reach a ‘break even' run rate as quickly as possible then to move into profit. My priorities - in no particular order - are to pay down debt; to establish a solid business model that creates great returns for both investors and SCV; to have an excellent management model we can easily scale; and to move forward with an exciting growth strategy. With the solid investor backing we have at SCV, all of these goals are very achievable.

My goal is to become a role model of excellence in asset management of seniors accommodation and what can be done.  I want SCV Group to become the clear industry leader. We can do it. We are doing it.

SCV Group

SCV Group is currently a rental provider whose business model is targeted at the asset management of all classes of seniors accommodation.  SCV communities aim to provide residents with friendly surroundings and have a professional atmosphere.

Listing as SunnyCove Management Limited on the ASX in 2004, the company adopted an IP for Rights strategy that enabled it to partner with qualified developers in order to expand SunnyCove communities across Australia.

In late 2006, the company changed its name from Sunnycove Management Limited to SCV Group Limited.  On February 28, 2007, it was announced that SCV would acquire the management rights to all Village Life Limited villages (other than those leased from the MFS Diversified Trust) throughout that calendar year. In November of that year, Village Life Limited changed its name to Fig Tree Developments Limited.

To learn more about the SCV Group please visit their website

SCV Group believes its rental services benefit retirees as they:

1. Free up their capital.
2. Allow them to achieve greater disposable income, more certainty in budgeting and the freedom to spend or invest more money however they want.
3. Have no general maintenance activities like household repairs, making retirement hassle-free.
4. Provide flexibility for residents, as renting with SCV allows them the opportunity to enjoy different lifestyle options associated with freeing up their capital.

Want more information?

• Read an interview with an SCV Village Life, Wynnum resident, David Stephenson here.
  

• For more information you can browse SCV properties around Australia here or visit any of the SCV Group websites, SunnyCove, Village Life or SunnyCove Plus.

This article originally appeared in The SOURCE, published by Villages Publishing in July 2008.

 

 

 

Other stories in this section:

• Christine Daly - Reducing Residents' Costs and Saving the Environment
• Stuart Nicholson, the CEO of Becton's Retirement Business
• Dr June Heinrich, the CEO of Baptist Community Services
• John Martin, Managing Director, Babcock & Brown Communities
• Ken Barber and ARV - The Business of Providing Better Care

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