Quoted company awards

Achieving your goals in a recession is far more testing than thriving during a boom. The Quoted Company Awards 2009, held at a packed Grosvenor Hotel in London’s Mayfair, gave ten shining examples of how the omnipresent economic gloom can be beaten (not to mention the £7,410 raised for the charity for young people, Get Connected, in the process).

For Entrepreneur of the Year Kate Bleasdale, timely specialisation into niche areas where demand continues to outstrip supply, has been vital. After selling her first business, which recruited every category of healthcare worker, in 2001 to ‘retire with four kids’, the former nurse launched Healthcare Locums two years later with a very different model.

‘This time, we focused only on key staff positions, which meant we needed no branch network and so could achieve much better margins,’ she explains. Bleasdale saw that Britain’s ageing population would lead to a rise in the demand for healthcare, while the pool of local skilled staff would shrink. Cleverly, she developed contacts overseas, with countries from Sri Lanka and South Korea to Poland and Germany which could supply trained nurses and other staff.

AIM-quoted Healthcare Locums sources 70 per cent of the staff it supplies from 65 countries and is expanding further to other regions such as the Middle East and US. Bleasdale sees a ‘soaring’ of nurse vacancies across the Atlantic, where the average age of an indigenous nurse is 45.

Market forces
The company, with annual sales of £176 million and profits recently rising by more than 200 per cent, initially grew by acquisition, but it is now chalking up organic growth rates of more than 40 per cent. Bleasdale says the next ‘big opportunity’ is the internet, which is likely to double its contribution to healthcare placement this year to 20 per cent, with more to come.

Online business is the fastest-growing area at groceries supplier Booker Group, run by senior retailer Charles Wilson, named Chief Executive of the Year. A high flier at Marks & Spencer and Arcadia, he returned to former employer Booker with ‘a very simple plan’ in 2005, when it had ‘£365 million debt, falling sales and no profit’.

Turning it round to today’s position, with £3 billion-plus turnover, debt of £29 million and rising profits, required sticking to Wilson’s plan: ‘We had to focus the business, manage the cash and listen to the customers – we survey 45,000 customers regularly on price, choice and service.’

Broadening the business was another part of Wilson’s design. This involved reversing into grocery wholesaler Blueheath and building online sales from £15 million to £300 million so far.

Wilson expects the market will be difficult ‘for quite a while’, but argues the new-look Booker will win a larger share of what consumers do spend. ‘We are in a better place even though the economy is far worse.’

Pleasantly surprised
Motivating staff is a crucial element of success in today’s markets, insists Chairman of the Year David Rasche, of insurance software specialist SSP Holdings. He did not plan the AIM-listed company’s £162 million takeover by private equity group Hellman & Friedman, but he can claim shrewd acquisitions, solid organic growth and a strong focus on customer service. That no-nonsense approach has seen this Halifax-based company float in 2006 and attract that satisfactory bid two years later.

Originally part of a Barclays-backed buy-in at the Computer Science group, which Rasche later bought back, SSP hoisted profits 38 per cent to £8.8 million on sales up 67 per cent to £64.4 million before the takeover. ‘We’ve always given every single member of staff shares and options and they had three take-outs,’ he explains.

Rasche insists a strong board with ‘good non-executives’ has been crucial for governance and team building. SSP’s senior independent director, Grenville Folwell, a former director of Halifax Building Society, certainly fulfilled that role, as well as leading the all-important negotiations with Hellman & Friedman, which explains why he won the Non-Executive of the Year award.

A good mix
Integrating acquisitions once they are made has provided particular challenges for testing group Software Quality Systems’ Rene Gawron, who bagged Finance Director of the Year.

The Cologne-based AIM player has been growing by acquisition, mostly with target-related earn in payments to keep the vendors pulling their weight.

‘You need the acquirees to retain some financial freedom to meet their targets, but you also need to integrate them,’ he explains. As yet unaffected by credit crunch or recession, Gawron says he saw the dark clouds gathering a while ago and opted for a debt-free policy, only using shares for takeovers.

Selling businesses can be as important as buying them and timing is no less crucial.

Tony Sage, chairman of Australian AIM counter Cape Lambert Iron Ore, describes overcoming boardroom opposition and selling its key asset to China Metallurgical Group for A$400 million (£183 million) in the Deal of the Year – without false modesty – as ‘a master-stroke’.

With metal markets in retreat, ‘you would not get A$50 million today, if you even got an offer,’ argues Sage. A fund manager by background, he has Cape Lambert using some of the proceeds to take high-yielding convertible debt secured on vulnerable mining companies’ assets, which will fall into Cape Lambert’s lap if they default.

No less well timed was the £66.7 million AIM float in February last year of Jersey-domiciled, energy-focused Irish engineering and construction group Kentz, named IPO of the Year. Chief executive officer Hugh O’Donnell and colleagues had been discussing a float for the previous 12 months, to enhance the company’s credibility and facilitate takeovers.

‘There had been some uncertainty in the market even then,’ he recalls, ‘but institutions with oil and gas experience were keen. Trying to do it this year would be very different.’

With an order backlog at some £700 million, £100 million cash, no debt and big oil customers so far still spending, Kentz is looking for acquisitions, though ‘now is a cautious time’, warns O’Donnell. ‘Being a public company makes clients look at us differently. It has raised our profile and won us business with smaller exploration and production companies.’  

In the money
Timing is, of course, the key to investing in growth companies or any other sort. Last October, Gervais Williams, named Investor of The Year for his performance running Gartmore Growth Opportunities Investment Trust, booked ‘very substantial profits on FTSE puts [options to sell the FTSE 100 Share Index]’.

‘We covered our portfolio 100 per cent from July 2007,’ explains Williams, who had grown appropriately fearful of where the credit boom would lead. By moving early, ‘we bought the puts at record-low premiums’.

He does see plenty of nuggets in the growth company sphere: ‘The economics are not good and the recession won’t go away soon, but the markets are exceedingly cautious and small-caps offer “bonkers” once-in-a-generation value’.

Particularly keen on resources, software and IT, Williams argues ‘risk appetites are starting to improve and many small-caps are performing well. All the ingredients are there for a stampede back into them’.

The credit crunch has a distinctly positive side for Steve Read of environmentally focused Ventus Venture Capital Trust, managed by Climate Change Capital and named Specialist Investment Vehicle of the Year. ‘Many small and medium-sized corporate developers can no longer use 100 per cent debt or internally generated funds; strong interest is coming back for external investors or joint venture partners.

‘Project equity is back in fashion,’ proclaims Read, an ex-Barclays project financier who joined Climate Change Capital in 2005. He says Ventus has carved a niche in joint ventures with private landowners in renewable energy and kindred projects.

‘We have a good brand name and deals come to us,’ comments Read, who says the Ventus trusts project is building to an 8p dividend five years from launch, concentrating mostly on private deals that are shielded from stock market turbulence. He has recently been raising another £20 million and insists ‘the pipeline of deals goes from strength to strength’.

Man for all seasons
Smaller public companies are the delight of Andrew Buchanan, winner of the Lifetime Achievement Award. ‘I was in at the start of AIM,’ he explains, having launched Beacon Investment Trust in 1994, while at Rutherford Investment.

Another finance group, Close Brothers, later bought Rutherford and Buchanan launched the first Close AIM Venture Capital Trust in 1998. ‘We returned a dividend of more than 30p three years later,’ reflects Buchanan, pointing out that the trust both moved into tech stocks and sold out in time.

After some time as a fund manager with Close Investments, Buchanan is now at another investment group, Octopus, and argues AIM began as a venture capital market and should not lose sight of its roots. ‘It is not really a market, but more a quotation platform.’

He insists fund management is different with small companies. ‘We are partners with their management teams, who often have few other places to turn to for opinions about the outside world. ‘You’re there for quite a time when you’re a shareholder of a smaller company – especially now’.

2009 Winners and Shortlist

Sponsors:

CEO of the Year
Winner: Charles Wilson, Booker
Shortlisted:
Martin May, Cape
Ben Langdon, Digital Marketing Group
Peter Whitbread, Lamprell
Iain Ferguson, The Mission Marketing Group
Rami Treger, Amiad Filtration

Sponsors:

Chairman of the Year
Winner: David Rasche, SSP
Shortlisted:
George Elliot, Craneware
David Evans, Immunodiagnostic Systems
David Jackson, Redhall Group
Pierce Casey, getmobile Europe
Geoff French, Scott Wilson Group
Alastair Beardsall, Emerald Energy

Sponsors:

Specialist Investment Vehicle of the Year
Winner: Ventus VCT – Charles Conner
Shortlisted:
ProVen VCT/ProVen Growth & Income VCT – Stuart Veale
Elderstreet VCT – Micheal Jackson
Chrysalis VCT – Chris Kay
Close Technology & General VCT – Patrick Reeve Ludgate Environmental Fund – John Shakeshaft
Crystal Amber Fund – William Collins

Sponsors:

Non-executive of the Year
Winner: Stuart Doughty, Scott Wilson Group
Shortlisted:
John Matthews, Diploma
Grenville Folwell, SSP Holdings
James Corsellis, Concateno
Jo Connell, RM Group
Bob Geldof, Ten Alps

Sponsors:

FD of the Year
Winner: Rene Gawron, SQS
Shortlisted:
David Templeman, FDM Group
James Ormonroyd, Telephonetics
Apostolos Binomakis, Helesi
Richard Logan, Iomart
Rex Orton, Latchways
Paul Roberts, Wynnstay Group

Sponsors:

Investor of the Year
Winner: Gervais Williams, Gartmore Growth Opportunites
Shortlisted:
Anthony Cross, Liontrust Intellectual Capital Douglas Brodie, Baillie Gifford British Smaller Companies
Harry Nimmo, Standard Life UK Smaller Companies
Richard Smith, Invesco Perpetual UK Smaller Companies
Daniel Nickols, Old Mutual UK Select Smaller Companies

Sponsors:

Deal of the Year
Winner: Anthony Sage, Cape Lambert Iron Ore
Shortlisted:
Peter Bance, Ceres Power
Simon Farrell, Coal of Africa
Dennis Woods/David Port, GNE Group
David Hickey, Lighthouse Group

Sponsors:

IPO of the Year
Winner: Hugh O’Donnell, Kentz
Shortlisted:
Dick Johnson, Phibro Animal Health
John Shrimpton, Vietnam Property Fund
Simon Vivian, Marwyn Materials
Simon Riddell, Animalcare Group
Alan Clifton, Japan Leisure Hotels

Sponsors:

Entrepreneur of the Year
Winner: Kate Bleasdale, Healthcare Locums
Shortlisted:
Nick Robertson, ASOS
Zvi Marom, BATM
John Hayward, Pressure Technologies
The Honourable Charles Wigoder, Telecom Plus
Hugh O'Donnell, Kentz

Sponsors:

Lifetime Achievement Award
Winner: Andrew Buchanan, Octopus Investments