Cleaning up the competition

Jim Noort’s experience with a filthy portable toilet was the catalyst for creating a multimillion dollar a year business renting out portable loos. By Mark Camm.

THE OLD SAYING is that there is money in muck but as Jim Noort is proving there is also money to be made in hygiene and cleanliness. Noort’s rapidly expanding Viking Rentals supplies portable loos for all situations – weddings, parties, building sites, race meetings – you name it.

Despite not having any background in the industry, he has won over his band of customers by renting out extremely clean loos. Dunnies with dignity, Viking calls it.

Jim Noort’s Viking Group has grown its portable toilet business rapidly
by providing superior service. His introduction to the industry came when he hired one while he was building his house.

“I owner-built my house,” Noort said. “I had to hire a toilet for the site and it was just no good. The toilet was irregularly serviced and it stank. It was pretty horrible and you just wanted to get out of the damn place as quickly as possible.”

He says he’s always been a stickler for clean toilets, even complaining to his father when a child about the state of public toilets. “When I see these things, I probably get a little bit more offended than a lot of people, but then I know most people are not much different than me.”

With a lot of research to back-up his gut feeling, ringing builders and asking them what they thought of their site toilets, he knew he was sitting on a winner. The universal reply was that the site toilets were disgusting. “Doing that gave me the confidence to invest the money and get started. No one likes a dirty toilet.”

The business plan was “always pretty simple” and Viking Rentals was set up in 2006 in Brisbane. It’s grown rapidly – last financial year the company grew by 200 per cent – and now has 2500 US-sourced portable toilets and 20 trucks for delivery, pick-up and servicing.

The business began servicing Brisbane then grew to take in greater Brisbane, including Ipswich, the Sunshine Coast and the Gold Coast in 2007 and Melbourne in 2008. It employs 24 people.
Each toilet costs Viking about $2000 and each truck about $100,000, making sufficient capital at the early stages crucial. “Unfortunately for me, the banks don’t recognise portable toilets as collateral,” Noort said. “They can’t recognise them as a resalable asset in case of a bankruptcy.”
Oddly enough, if he had been renting air compressors or trucks, the banks would have been happy to lend him money. “Basically, the banks weren’t much help to me at all,” he says. “I had to use my own money [by mortgaging his house] and quite early in the piece I got a private equity company involved to help me,” said Noort.

Brisbane-based equity investor, Blue Sky Private Equity, provided the substantial funds to grow the business and is a major shareholder. “It’s a very capital intensive business. Like any rental business, you’ve got to cough up the big bucks in the beginning to build your rental fleet and then you have to recoup that money over the years.”

Eventually, the company will have to undergo a transformation to reflect its financial situation. “I’ve got private equity on board and they have an expectation that there’ll be some liquidity at some stage, whether a trade sale or a float on a stock exchange,” he says. “Something will have to happen for them to realise their investment.”

People would love to believe that Kenny, the film about a man obsessed with portable toilets and their cleanliness, was his inspiration for Viking’s business model.

“No, not really, but it did lift the public perception of the industry. When the drivers go onto building sites they kind of have a laugh with the guys there. The guys know the driver’s probably just a knockabout bloke having a go in life. I think the drivers appreciate that.”

The details of keeping the toilets clean might not be to everyone’s taste, or stomach, but they are what makes Viking popular and sought after. The waste tanks are pumped out and the toilets are given a thorough clean. Toilet paper and soap are restocked, chemicals put into the tank and the interiors are sprayed with a perfume­deodoriser.

There are two types of portable toilets to rent – the ultra clean and sanitised for parties and weddings and models for building sites. “It’s a different pricing structure and a different sort of value proposition altogether,” Noort said. “While we seek to give all our customers as clean a toilet as possible, for a party hire we require it to be spotless inside and out.

“For building sites the standards are still very high, but you can’t always get rid of paint stains and stuff like that. We have two fleets for short-term party hire and building hire.” Their use rate is an impressive 90 per cent.

Through a subsidiary, Viking Elite, the company also caters for major events where large numbers of toilets and hand-washing stations are needed. But the event fleet stays in the yard until it’s needed.

Viking turns over more than $5 million a year and plans to continue growing strongly. While Noort sees it growing in size and the areas it covers, there’s no likelihood of Viking becoming a franchise. “The business model doesn’t really work with franchising,” he says. “It needs scale and therefore I’m not much interested in franchising into smaller territories like Rockhampton. I’m really only interested in big cities where you’ve got good scale and I don’t want to franchise into that one when I can do it myself.”

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