Dorset economy report 2013

DORSET ECONOMY RepoRt & Accounts pResented by

“They fell 86% to £72million,” reports David l’Anson, managing partner at the Poole office of chartered accountants and business advisers Mazars. “Actually, though, there’s a very good reason why you can remain standing. Fitness First reported a £451million impairment of assets, while Bournemouth International Airport have a £38.5million impairment, and if we take those two companies out of the equation, actually pre-tax profits rose by 32% to £786million.”

The biggest company in the county, in terms of turnover, is LV – Liverpool Victoria Friendly Society, with sales of £2.2billion, up 27%. Next is Cobham plc with £1.7billion, which represents a 5.7% reduction, with Meggitt plc much closer on their heels at £1.6billion as a consequence of a 10.3% topline improvement.

The biggest independently-owned company is Lush Cosmetics. The cosmetics manufacturer and retailer achieved sales of £272million, up 3.8%. Leaving aside companies which have gained turnover as a consequence of acquisitions, the biggest increase was achieved - organically - by New Earth Solutions Group. Their sales increased 122% to £24.7million, and during

the course of the last financial year developed its own patented technology which can convert waste-devised fuel into a high calorific gas which in turn can be converted into electricity.

The last year has seen some consolidation, notably in agricultural machinery supplies where Dorchester based C Smart Ltd lifted turnover by 60% to £19.8million, mainly as a consequence of acquiring Ashworth Farm Machinery And there could be signs of improvement within the construction industry. McCarthy & Stone managed to improve sales by 14% over the year

to £234.7million, while most contractors who filed full or medium accounts managed double digit percentage growth.

The biggest pre-tax profit? That was achieved by Meggitt plc with £292million, and a margin of 18.2%, followed by Cobham with £206million and a margin of 11.8%. The biggest percentage increase in pre-tax profit was achieved by Sunseeker International. The luxury boatbuilder converted pre-tax losses of £7million to a profit of £17million.

And special mention should be made of Merlin Entertainment. While the registered office of the private-

DORSET EcOnOmyREpORT & AccOunTS

TOP 150 COMPANIES IN DORSETOn each individual company: Financial data - turnover, pre-tax profit, profit margin: Employment data - staff numbers, average salary, productivity; together with previous year comparison.

Available to download at www.decisionmagazine.co.uk

The collective turnover of the top 150 companies in Dorset was £13.6billion, an increase of 10.6% over the year.

But maybe you need to be sitting down before seeing the collective pre-tax profit figures.


equity owned top company is based in Luxembourg, the long-established and consistent management team led by chief executive Nick Varney have built Merlin to become the second largest visitor attraction in the world – the largest in Europe – from offices here in Poole. Over the year they upped their pre-tax profits from £25.5million to £95million.

The current assets of the 200 largest companies in Dorset totalled £5.3billion, an increase of 1.5% over the year. Current liabilities rose 1.4% to £3.6 billion, while combined assets of £15.3 billion outstripped current liabilities by 31%. If we look at net assets of £4 billion, that figures represents a decrease of 5.5%. But that figure is mainly the consequence of a further fall of 672 million in the net asset value of Fitness First. If we pare that figure back level with last year’s figure for that company, then net asset values for the other top companies collectively rose 10%. The company which achieved the biggest percentage increase in net assets - and we’ve taken £1million as the starting point - is AIM Aviation, up from £1.9million to £6.2million.

“While Dorset is home to the headquarters of a number of companies with a global reach, our research provides empirical evidence of the importance of growing the SMEs in the county because of their mission critical importance to its economic prosperity,” explains Jonathan Sibbett, managing director of property advisers Sibbett Gregory.

“The top 25 companies in Dorset employ 91,998 staff. The next 175 companies contribute another 20,333. Even if we factor in the 4000 jobs at JP Morgan in Bournemouth, a company not included in the ranking because it isn’t the head office of either the group or one of its subsidiaries, the top 200 companies in Dorset contribute the equivalent of 26% of the actual jobs in the county.

“Now a number of the leading companies based in Dorset employ people across the world, not just here, and we haven’t factored in public sector jobs. But the point is that public sector jobs aren’t going to be the future, and it isn’t likely, because of their sphere of operation, that Dorset will be the beneficiary if some of our major employers create more jobs.”

“Overall, the number of people employed by the top 200 companies in

Dorset is 112,331, an increase of 4.4%“The largest independent company

in terms of staff numbers is Lush Cosmetics, with 5007 staff, an increase of 9.3%. The total salaries paid by the top 200 companies, leaving aside national insurance contributions by both parties is £2.7biillion, compared to £2.4billion the year before. The average salary, shorn of NI and pension contributions, is £27,766, which is a slight decrease of 0.3%.

“The remuneration of the highest paid directors at the largest 150 companies in the county decreased as well – by 8.5%. The average remuneration was £261,000.”

BuSInESS pORTRAITS

History provides theleadership platform

“We’ve always used our heritage as a foundation, the base from which we can more firmly see the way forward,” explains Anthony Woodhouse, managing director of brewers Hall & Woodhouse (established 1777).

Absolutely they’ve being doing that. But even given the location of their head office in the more rural climes of Dorset, it would be hard to assemble the number of bushels the company has somehow kept its lights under over the years.

Hall & Woodhouse have tended to take the leadership role among regional brewers - establishing Badger as a brand, the first to produce bitter in cans. The company opened the (perhaps unfortunately named) Badger Steak Houses before a more famous national name served their first prawn cocktail, as well as creating a national soft drinks brand, Panda Pops, which Hall & Woodhouse sold to Nicholls plc in 2005. Today the company still produces its Rio range of fruit-based sparkling water.

Innovation in terms of the estate as well; one of its latest pubs, in Portishead, is built out of twenty-eight shipping containers.

“Whether it’s a property or a brand, our approach has always been - will this still have the ability to thrive in years to come?” Woodhouse explains. “There has always been change in the licensed trade. Two centuries ago,

rural pubs looked much like someone’s home. Workers would come in off the fields down a few pints, and then go home. Today, that workforce is a tiny percentage of the population, and it isn’t socially acceptable to drink that much and then go home to the family.

“Today, 75% of our pubs are food-led. Fifteen years ago our beer sales would have been 75% through the on-trade, but today the majority comes through supermarkets. But we only supply Badger cask ale to our own pubs to give them a point of difference.”

“We’ve been entrusted with the family silver to polish,” says Anthony Woodhouse. “Our role is to add more lustre with active and responsible stewardship so we can then hand it on to the next generation in even better condition. Whether you have a long-term or short-term view fundamentally alters how you run a business. But any business has to expect the unexpected, and every year we take two days out to review strategy. We’re brewers and proud of it, it is our life and soul, otherwise we’d just be another any old pub company; but that doesn’t mean we stop looking at where our capital is parked so we don’t become dependent on any one activity.”

That commitment to brewing is demonstrated by a £5million investment in new production facilities, funded by the sale of land owned by the company in Sussex - which took seven years to get through planning.

“We are always looking for the equivalent of a Waitrose niche in a market dominated by large managed operations that have vast economies of scale,” explains Anthony Woodhouse. “Our vulnerability to the vagaries of the weather comes from the predominantly rural position of our houses; metropolitan locations still fare well despite the weather. Demographics are on our side in that the south and south-west are affluent, and have fared relatively well, and we are bolstered by the attractiveness of the area as a tourist destination and a place to retire.”

Expansion naturally would come from consolidation, with one independent acquiring another. Fullers acquiring George Gale & Co is one example, and Hall & Woodhouse bought Sussex-based King & Barnes, which added fifty-house


pubs to their estate. It used to be an attractive way of expanding, but Hall & Woodhouse are more cautious than before. “If you look at what could be gained now, how many could provide us with the houses of the future rather than the ‘tail’ pubs that nobody really wants? muses Anthony Woodhouse. “I think we are better investing in specific locations than an estate.”

Having been an investment banker for twelve years, Anthony Woodhouse left the City to set up a cricket coaching academy for children and a charity for the homeless. When his brother David died suddenly in 2009, Anthony Woodhouse became managing director of Hall & Woodhouse. Why hadn’t he joined before? “Because the business is there to generate wealth, not to create employment for the family,” he explains.

In the last couple of years the company set up the Hall & Woodhouse Academy (with two full-time trainers)

to promote what it calls its DNA - which stands for Development of technical and behavioural skills, Nuturing the culture, Acknowledgement of positive performance. Every member of staff goes through the academy - no matter how many years they have been with the business - so that the Ways of Woodhouse (the name of the pocket book which goes with the course) are embedded.

“It’s important to explore, develop, and implement the company culture,” says Anthony Woodhouse, “but it can’t be a fad. The truth is rooted in our history, and this just enables everyone to understand those fundamental front-line values.”

But this isn’t a company using history as a comfort blanket. The Hall & Woodhouse board includes Tim Clarke, a former CEO of Mitchells & Butler (a pub operating company), and Mike Street previously director of customer service and operations at British Airways as non execs. “The board room isn’t a

cosy place,” says Anthony Woodhouse.Not surprisingly, Hall & Woodhouse

take a view on tied houses (where the landlord is obliged to buy all of the beer and other drinks from the brewery or pub operating company) which isn’t the industry norm. “It should be obvious that if you are a member of a ‘club’, you should be able to buy things cheaper rather than dearer,” says Anthony Woodhouse, “so if the arrangement meant our tied landlords are having to pay more for their beer, wine, and spirits, it would mean we would lose our most entrepreneurial people. We see them as business partners, not tenants, and establish a fair trade figure. It wasn’t the tie which was the problem but the share of the pie. It meant that we took a £500k hit on our P&L but we did it because it was the right thing to do.”

www.hall-woodhouse.co.uk

Anthony Woodhouse


planning creates themarket leaderHow does one of the country’s leading planning consultancies manage to keep its flag flying when its offices were nowhere near most of its clients and projects.

“We always enter projects for awards as we want to be the best at what we do and recognition from the industry helps that process,” explains managing director Tim Hancock.

Among those received is the Royal Town Planning Institute planning consultancy of the year award, although the practice had been in two minds about putting themselves forward. “We are happy to promote the quality of a project but we didn’t want to shout about ourselves,” explains Hancock. “But the award re-affirmed our position as a national practice which happens to be based in Bournemouth rather than a peripheral, regionally-focused consultancy.”

Although how predominantly London-based potential clients should think otherwise is a bit of a mystery. Because on the master-planning roll of honour is the McLaren Technology Centre, Woking, (built on Green Belt land with the support of the local authorities concerned), the Rolls-Royce car plant (nestling in to the South Downs, again with local authority approval), the Warner Bros Leavesden Studios (Harry Potter), a proposed new town at Northstowe, near Cambridge, and the Mercedes-Benz World project at Brooklands.

“Fundamentally,” says Hancock, “our approach follows the belief that planning problems are there to be solved.”

As well as opportunities to be identified. Hancock recalls persuading industrial conglomerate Hanson to let the practice undertake a land review in one particular region of the country for one of his companies. Three possible development schemes were identified within three months, including a motorway service area. Six months later, Terence O’Rourke gained the necessary planning permission and the site was was sold on. Impressed, the client gave the practice the contract to review the company’s national land assets. Twenty years later, Terence O’Rourke are still working on projects which came out of that review, such as the site of some old gravel workings outside Cambridge.

“Our mantra used to be good developments should happen,” Hancock explains, “but we now talk about creating successful environments. Planning is still at the core, but design and sustainability are key elements.”

And he can provide an example of how that all comes together. At the 650acre former airfield at Kings Hill, Kent, Terence O’Rourke put together a mixed-use community for a US-based developer, with four million sqft of BI building, 500 houses, community facilities, and retail. “We created an integrated community, what the developers describe as total life experience, where people can live, work, and play,” says Hancock. “Today, nearly 20% of the people who live at Kings Hill work at Kings Hill.”

A forensic, almost investigative approach to find a link between a proposed development and the locale was certainly in evidence at Brooklands. “When the racing circuit opened in 1907,” says Hancock, “our research found that the founder of Mercedes-Benz donated a trophy for the first race, which incidentally was won by one his cars. Suddenly we had the link between the company and the location for their proposed development. What that enabled us to do was to demonstrate the relevance of Mercedes-Benz to the site, that they cherished the location, and that we had added some restoration of the old track as a consequence. We also built in a covenant that if the company should ever leave what is now called Mercedes-Benz World, the driver experience part of the site would revert to the local council.”

Localism is part of the Terence O’Rourke approach. “In addition to producing a robust masterplan, we need to be able to identify the key people,” says Hancock, “the influencers who could be there for us, those in the middle, and those who will be against the project. The strategy is to put ourselves in the shoes of the objectors.”

Although Hancock talks about the company having a strong brand which is associated with complex, challenging projects, one word could encapsulate his description - incinerators. And they’ve got planning permission for eight of the nine schemes they were involved with.

“We are only associated with schemes where the operators have an integrated waste strategy which encompasses

recycling facilities and energy recovery,” he says. “Our ethos is sustainability, so we we have to be satisfied about the risk to the environment.”

But the desire to have a London presence preyed heavily on the company, which opened offices there last year. “I think we needed a presence there if only to get work from new prospects based in London, even if they then use us for schemes outside of the capital,” muses Hancock. “It has also been more difficult to recruit graduates in Dorset.”

To address that, Terence O’Rourke sponsor them to gain post-grad qualifications. “It buys us goodwill, and it means they have bought into our culture and want to be here for the right reasons,” says Hancock. “The constraint of this is the effect on the pace of growth we can achieve.”

www.torltd.co.uk

planting the question to discover inspirationInspiration, says Warren Haskins. He pauses after answering what had been rather a direct question - what is the main reason why people drive to one of his company’s four garden centres?

“We’re here to stimulate their thinking,” continues the chairman of Haskins Garden Centres. “They might have a project in mind, bedding plants for a border for example, but they haven’t a shopping list like they would have for the supermarket. Yes; I would say they are looking for inspiration.

“Twenty years ago garden centre businesses would still be describing themselves as plantsmen, but although the customer wants and expects informed advice and service, we have to be retailers first and foremost because the customer wants to same experience as when they go to a John Lewis. I try not to use the word gardening when I describe our offer. When you buy a meal, it’s all about the flavours, the aroma, not the frying pan and the stove.

“This is a touchy, feely, aromatic business, and you can’t replicate that on the internet.”

When Warren Haskins took over as the fourth generation of the family in 1969, he focused on retail, relinquishing the nursery, the landscaping business, and the


annual obligation to exhibit at the Chelsea Flower Show. All for one reason. “Retail generated revenue more quickly than growing plants,” he explains. “It meant we could stock a bigger range of plants and focus on the best quality available rather than the best we were able to grow. When we stopped growing our own plants the quality of our stock improved because we could buy from specialist growers. If you grow your own, that’s what you stock, regardless of quality.

“So shrubs are hand-picked by our buyers mainly in the UK but we also select them from all over Europe - and the growers know we will only unload

top quality product from their lorries.”He didn’t leave anything to chance.

Haskins brought in a consultant from California to help design what was then the flagship garden centre, the consequence of J Sainsbury acquiring its original site. Touches included moving volume goods (compost for example) as close as possible to the goods-inwards door so that there’s no disruption to the shopping experience if re-stocking has to take place during store hours. Outside, covered walkways encircle the plant displays - so the customer can still inspect the plants when it rains. Twenty years on, the master plan was

reviewed, and although the visuals have a contemporary feel, the conceptual thinking is pretty much the same.

The range has expanded to include garden furniture, clothing, and the barbecue, but Haskins hasn’t blurred the borders by adding kitchens and double glazing concessionaires. But everything else is large scale - the restaurant at Ferndown, for example, has 450 covers, and includes a traditional pizza oven and a carvery. At Christmas the garden centre stocks a range of gifts and decorations in place of the barbecues and furniture which nobody contemplates buying at that time of year.

Warren Haskins


It was in 1996, after another of his retail therapy trips to the USA, that Haskins went on to set up Hobbycraft, an out-of-town superstore concept which sells what the name suggests. Subsequently, after initially thinking about a public offering, he sold to private equity in 2010 but not before opening the best part of fifty stores.

To give himself the time and space to make that happen, he brought in a professional management team for the garden centre business, taking the role of CEO at Hobbycraft and maintaining a non-exec presence at Haskins as chairman. He still maintains the latter post, having promoted his merchandise manager of twenty years, Julian Whitfield to be chief executive.

Each of the four garden centre outlets will carry some 35,000 different lines, 10,000 of which change every year because they are seasonal. Expansion isn’t so straightforward; Haskins needs a minimum of ten acres, and an outlet would have to be within two-and-a-half hours drive from HQ; a part of the country not known for cheap real estate.

‘We commission demographic studies based on customer profiles at existing gardens centres in an area we are considering,” explains Haskins. “It means we can be precise about the attributes of specific locations. We know that Reading and Oxford would be good for us.”

The intention is to open a new garden centre every three years, although maybe hope is a better description.

“This is a capital intensive business - we invested £15million over a twenty-four-month period in a new centre and refurbishment - but in a recession we thought there would be sites and assets available,” muses Haskins. “That hasn’t been the case though. The size of a site we would look at will be akin to a retail park development, so if it has planning permission for retail, then the land value is going to be prohibitive.”

If California though is where garden centres were born, it’s interesting that their descendants now visit Haskins to see what can be done. And Warren Haskins is still in demand as a speaker internationally; he was asked to give a talk for example to the management team at Palmers Garden Centres, recognised as the foremost retailer of its kind in New Zealand.

www.haskins.co.uk

niche distributor with plenty of legsWith a BSc Hons in biology, his intention was to work in marine biology, but Gareth Thomas ended up selling medical products. “Basically it was because I needed to eat,” he says. When employers Dale Corning sold off their orthopaedic product division, he took the redundancy package and set up OsteoTec to distribute the products for the new owners in the UK and Ireland. But after ten years, Wright Medical Technology acquired an Italian business which had its own UK office, and decided to take its distribution in-house.

“Over the years we’d brought in niche, complementary products, including the plates and screws to repair the now infamous metatarsal, but at the time we faced the loss of 46% of our business,” he recalls.

To make matters worse, OsteoTec was struggling to get product liability cover because insurers were chary about companies of their size. Eventually Thomas re-mortgaged the house (“again”) but he was confident about the products in his locker, especially the Ascension implants, a pyrocarbon implant which is as hard wearing as a diamond but with some elasticity so it doesn’t wear against the bone, and which is self-lubricating.

Customers include individual surgeons (200 specialising in feet, 250 on hands) and surgical podiatrists (there are 150 in the country, and 110 of them attended the last annual OsteoTec spring conference).

“A distributor needs a lot of different legs, so we decided to start producing our own products, which now account for 12% of sales,” explains Thomas.

Not that initial attempts paid off in the way he would have hoped. “We signed up to the Teaching Company Scheme at the University of Bath to help with the development of a wrist implant,” he recalls. “But when we realised that it would take more time and money than we could afford to get it to market, we sold it to another company; they then shelved it.”

Undeterred, OsteoTec went on to product a finger implant which is produced by a contract manufacturer.

Producing their own products didn’t just increase their range. It also widened their geography, and today OsteoTec have distributors in nine countries. “As a distributor ourselves

in the UK, we know what would attract a distributor,” says Thomas, “which is either that they need a portfolio of products for a particular market or a footnote at the end of their catalogue.”

Over the last five years, OsteoTec have developed five new products, including what is called a distraction system, which allows soft tissue healing to occur. “We come up with product ideas because we are always talking to surgeons,” says Thomas.

But he has also diversified away from medical devices. Thomas acquired the Crazywater outdoor pursuits shop and on-line business and is thinking of introducing his own brand products.

www.osteotec.co.ukwww.crazywater.co.uk

Synergy and reputationprovide real collateralEven in a good year, fork-truck distributors aren’t as mass-market as you might think, because only in the order of 30,000 new vehicles will be purchased in the UK. When the recession came, numbers dropped to just over 20,000.

Locators started opportunistically in 1985 when Brian Cowles was made redundant by a manufacturer and persuaded Toyota, who were looking for representation in the south, to appoint him.

After one meeting with a prospective customer, Cowles noticed a racking and storage salesman waiting to go in next. “I immediately realised that the synergy between fork-trucks and storage hadn’t really been recognised,” he recalls, “so we began to supply a turn-key service by providing both.

Certainly Toyota were pleased with Locators’ performance, and gave them additional territories stretching into London, which prompted the company to open a facility in Thatcham.

It was in 2007 that Toyota acquired BT Rolatruc, which sold direct to the customer, and as a consequence they began to buy out some of their distributors. “I didn’t want to sell Locators because it was my legacy,” says Cowles, “and what they wanted was the business and the customers, not our people.”

So Toyota gave him six months’ notice. “We were facing the prospect of losing a lot of our business through no fault of my own,” he explains. And


that is when Locators realised that doing things right in business gives you a reputation which serves as collateral. The German fork-truck manufacturer Still appointed Locators, and invited all the staff to spend a weekend at their factory. They came back motivated.

But how did Locators’ Totoya-based customer base react? “Fork-lift manufacturers can have almost an arrogance about their brand,” says Cowles. “But it’s not like a car. The customer sees a fork-truck, and the loyalty is to the supplier of the service. In fact, 2008 was our best ever year. We retained 95% of our customer base as well as developing new markets not immediately associated with materials handling and storage.”

Locators went on to import and distribute the Goupil range of electric utility vehicles from France, adding a range of access equipment from Manitou (also from France) and JLG (USA). Then there’s the truck designed for marinas to lift boats in and out of the water which Locators have supplied to the Royal Marines and the Olympic sailing centre at Portland. “The more wheels we have out there, the busier our parts and service business,” says Cowles.

“What do we do which is better? Well, we don’t have a call centre, and our engineers aren’t in vans with big fleet numbers on the side,” says Cowles indicatively, who last year appointed long-serving (twenty years) sales director Keith Stewart as managing director.

www.locators.co.uk

making intelligent use of developed resources“Marketing-wise, our name does make us sound parochial, but there are real advantages in terms of the cost-base, says Jonathan Gerson, and managing director of Dorset Software Services. “My sales spiel is that actually, we’re located between London and India.”

Which gives a rather more accurate impression of the company, which has an eclectic client roster from Vodafone to the Luxembourg Natural History Museum. But actually, the location overlooking Poole Bay does have its attractions.

“Graduates might be attracted to the bright lights of the City, but we always talk to them about flexitime so they can knock off early for a barbecue on the

beach,” says Gerson. “But if they’re the type of person who wants to work in a more corporate environment, it wouldn’t matter where we are based, they would still be attracted to go to a Cap Gemini.

“We look for maths and physics graduates and choose the universities, such as Warwick and Southampton, carefully. We go for graduates and put them through a four-month training course rather than experienced programmers because when Microsoft comes up with a new platform, everyone has to re-train, so there is no point in us taking someone on simply for their existing skill-set.

Started a quarter of a century ago by Gerson, a programmer who started his career at Plessey before contracting for companies such as IBM and a subsidiary of Eldridge Pope where he co-wrote a system for managing brewery accounts.

“Contracting then was about putting lots of us in a building with unlimited overtime, fourteen-hour days, and pizza boxes stacked to the ceiling,” he recalls.

In 1991 he was in Germany for a subsidiary of Dun & Bradstreet when he realised that more hands were required, so in effect he recruited two sub-contractors to work with him. “So really, Dorset Software was effectively started in Frankfurt,” Gerson observes.

“It was the time of German reunification, when pharmaceuticals in East Germany had to be subsidised because of the difference in pay levels with West Germany, but this left the door open for corruption with drugs being bought in the east and then being sold in the west. So we developed software which would monitor the transactions made by wholesalers.”

A year later, Gerson returned to the UK, with his two ‘staff’ to rattle around in an eight-roomed Georgian building which he mistakenly thought could be divided and sub-let. But then the Dun & Bradstreet company asked him to go to Basel. He returned with a bigger pot of money this time, but still no UK work. “We were almost on our last legs when all of a sudden I got a call from Switzerland to ask if we would write a specification,” says Gerson. “I said I would squeeze them in, and that bought us nine months.”

During which time, other pharma clients, including Sanofi began to emerge. “Probably what helped us was that we had built up experience, although we hadn’t gone out to develop

that sector,” explains Gerson. “Now it would be more difficult to find work in pharmaceuticals because with so many consolidations the companies are huge.’

Then came an order from a GEC joint venture which required fifteen program testers, followed by a successful bid for a £300,000 contract to write software which would track information being given to independent financial advisers (“won against eleven other firms”).

By now Dorset Software had a staff complement of twenty and was winning work from companies in its home county such as Beales and Teachers Assurance. At the millennium, staff numbers had risen to thirty-eight, but the combination of the dot com bubble bursting, 9-11, and economic uncertainty suddenly contributed to a 50% drop in turnover.

Gerson acted decisively. By keeping on all his staff. “I’d convinced myself that this was just a short-term blip because of unforeseen circumstances, that a turnaround was just around the corner and that we needed to have the resources on board be able to earn our way up the ladder,” he recalls. “Fortunately that turned out to be true, but the bad patch lasted for a year and a half rather than the six months I thought. We were losing £30,000 a month, so perhaps I should have listened and downsized.”

To keep everyone busy, the company produced a web-based time and attendance system called TRACE which attracted a number of purchasers such as Kent County Council and Black & Decker.

It was in the autumn of 2003 that Dorset Software put in a bid to write software for the NHS. “At the time, I thought it was something we should then forget about, because there was no way that we were going to win it against some of the world’s major players,” says Gerson. “Then in the November we heard we had made it to the last three. Then we had to visit five of their sites, which took us out of the office for a week. This was costing us £30,000 at a time when we were losing £30,000 a week! But in February 2003 we were named as the preferred contractor for their £1million contract. We started work in the March, and were paid on a time and materials basis because the contract wasn’t ready to sign, but this gave us an advantage because the further we went into the project, the harder it would have been to get rid of us!”

Work slowed again in 2009, and this


time Gerson read the runes differently. The company made 25% of its fifty staff redundant, and everyone else took a 10% pay cut. “It made us profitable, but it was hard, very hard, to say goodbye to people who had been with us for fifteen years,” muses Gerson. “Before we had been saved by what I call commercial miracles, but the chances of that happening this time were slim; I hadn’t seen anything as bad as this recession.”

Today Dorset Software is back up to full strength, with the company developing software to sell as well as bespoke commissions, such as a communication system which ties together two Microsoft products and means a company can dispense with its PBX telephone system with calls at a fraction of the usual cost.

It’s not branded Intelligent Comms

for nothing. If, for example, a call comes in from a particular country, it can be routed automatically to the representative covering that geography. And as soon as it’s picked up, the caller’s records appear on screen.

“We’ve also developed a hosted version,” explains Gerson, “which removes the biggest barrier to a large company investing in a new product - the cost of hardware.”

www.dorsetsoftware.com

Happy holidays butcloser to home

Curious, that at one level, a company which has already celebrated its centenary should still be talking about educating the customer concerning its product. But the tectonic plates of the leisure and industry have been shifting, since the economic downturn of 2008 and the emergence of the stay-cation.

Which is why, over the last few years Hoburne have been attracting people who would have been previously disposed to foreign vacation to buy a holiday home at one of their seven holiday parks in the south and west of England. The age profile of purchasers tends to be over fifty, but they bring at least two other generations with them.

Jonathan Gerson


“The media has promoted this notion of nostalgia, of a return to childhood pleasures,” says Rosie Kennar, chairman and great-granddaughter of the founder, “but people will only buy or book a holiday with us if we deliver their contemporary expectations of comfort.

“People who may not have stepped inside a caravan since their own childhood holidays would have a big surprise. Gone are the days of cramped spaces and brown velour; in our top-of-the-range accommodation today you’ll find whirlpool baths, iPod docking stations and Xbox 360 consoles. At Hoburne we hear people say ‘this is as good as a hotel’. But the fact of the matter is that there are holiday parks elsewhere where the provision is still pretty poor.”

And when Kennar talks about the need to develop a long-term relationship with the customer, she’s not glibly quoting from a management manual. Because repeat business represents 75% of holiday bookings, and generally that’s people going back to the same park as before.

This comes from knowing your customers (at Hoburne they tend to be families), and cloaking the offer around them. Which is why, for example, the live entertainment clubs close at eleven at night. “We don’t want a lot of noise at that time, or people wandering back to their lodges inebriated,” says Kennar. “We’re not being a nanny operator exactly; taking a commercial view, we aren’t trying to attract the party-going, stag party market.”

At the beginning of every season, Hoburne’s chairman and managing director visit each location to brief the staff, a kind of annual roadshow to make sure everyone is calibrated. Not that the message is set in stone. When four general managers out of seven retired at the end of the same season, Kennar took a positive view of change. “To hear the views of people from elsewhere in the leisure industry is interesting,” she says. “Of course we have to get across our values to anyone joining the company, but any business needs an injection of new blood to keep it on its toes.”

Interestingly, Hoburne haven’t acquired an additional site for a quarter of their century. “It isn’t just calibre of location,” explains Kennar. “VC interest in our sector has had an influence on prices and good locations

have come at too high a premium.”What the company has been doing is

to grow laterally as it were; there’s the construction of holiday home lodges at the Hoburne Naish park, priced up to £240,000, with views across to the Isle of Wight and the Purbeck Hills.

Kennar is the great-granddaughter of the founder John Burry, who acquired what the locals called ‘Hubborn’ farm at Christchurch two years before the outbreak of the First World War, and converted some existing farm cottages into holiday homes. An ambitious man in his late forties, he went on to buy nearby Naish Farm, and gradually agriculture was replaced by tourism as he capitalised on the panoramic views from the cliff top location.

After a secretarial job with Courtaulds in London, then the marketing department at Butlin’s HQ in Oxford Street, which sent her on a day-release course to develop marketing skills, Rosie Kennar joined the family business in 1986 as the sales and marketing director’s assistant. “It gave me the chance to learn about the business first-hand but without being in the front line,” she recalls.

Five years later she was on the board, and became chairman in 2002 when her father turned seventy. “It is too early to say who will take Hoburne into the fifth generation of family ownership,” she says. But her eldest son, who graduated from Oxford University with a degree in politics, philosophy, and economics, and has a career in fund management, “is eminently capable of being chairman if he wanted to.”

Certainly the centenary has contributed to legacy; bookings continued to rise for the fifth consecutive year.

www.hoburne.com

Evervescent approach captures world marketsThe bomb capital of the world is arguably Dorset. The county is home to three international names in cosmetics, including the two which make the bath bombs which effervesce when wet, adding scent and colour to the water.

Get Fresh Cosmetics, which trades as Bomb Cosmetics, started with the product fifteen years ago. “We launched at a trade show and looking

back, the stand looked hideous, but we were mobbed. I think it was because the bombs looked so different, so unpackaged,” recalls co-founder and managing director Robert Philpott.

“We export to over forty-five countries, mostly through distributors. We can ship to France and Germany for about the same cost as within the UK, and the north European market is worth over £1.5million a year.”

The company makes about 20,000 bombs a day by hand, which retail at around £2.99, plus a home fragrance range of candles, air fragrances, and holds patents in the UK, Europe, and the USA. “Dorset isn’t the cheapest place in the world to manufacture hand-made products,” muses Philpott, “but I live here and it’s a great life style. It’s a selling point that our products are made in the UK.

For a while, Get Fresh Cosmetics were also contract manufacturing for The Body Shop and a major supermarket, but margins were squeezed, and Robert Philpott decided to focus on retail.

But even though the company produces point-of-sale displays free for the retailer, there are just fifty or so outlets in the UK, which account for 30% of sales. Bomb Cosmetics had a concession in Selfridges for a while but the cost consumed most off the margin.

The origins of Lush Cosmetics can be found in what was the spare bedroom of Mark and Mo Constantine, who recovered from the demise of their Cosmetics to Go business (as a consequence of a catastrophic and complete computer failure) to set up a manufacturing and retail business which now has more than 830 outlets in over fifty countries. In a previous manifestation, Mark Constantine’ had a company which for a time was the biggest supplier to The Body Shop.

It was in 1981 that the first Neal’s Yard Remedies shop was opened in Neal’s Yard, Covent Garden, offering dried herbs, homoeopathic remedies, essential oils, and a range of toiletries based on herbs and essential oils.

Four years’ later a small factory was opened in south London to meet increasing demand. In 2005 the head office for Neal’s Yard moved to a new purpose-built eco-factory facility at near Gillingham, Dorset. That same year the business was acquired


by Peter Kindersley, co-founder of publishers Dorling KIndersley and owner of Sheepdrove organic farm. In 2008, Neal’s Yard Remedies became the first UK high-street retailer to be certified carbon neutral.

Today the company has some forty shops, therapy rooms and four hundred stockists in the UK, including Waitrose. They have also expanded overseas, with outlets in Japan, US, UAE, Oman, Hong Kong, Taiwan, Greece, Norway, Belgium, Italy, Mexico, South Africa and Australia.

But cosmetics aren’t the only Dorset ‘cluster’. In 1934, aged just twenty-four, Keith Spicer stared his own business blending teas from his family home in Bournemouth. He would purchase

the tea from Southampton docks and after the blending would set off on an old butchers bike to sell and deliver the tea. Later that same year, he purchased his first motor vehicle with the £100 left to him by his grandfather .

In 1936, Keith Spicer won two Gold Medals for blending ‘the most perfect pound of tea’ at the Grocer’s Exhibition in London. By 1970, the company had moved to a purpose-built factory, and more recently launched its Dorset Tea, a blend from Kenya, India, and Sri Lanka. In 2010 the company was acquired by private label producers Harris Freeman & Co Inc.

Clipper Teas was started in 1984 by Mike and Lorraine Brehme and

launched the first Fairtrade tea a decade later, becoming the UK market leader in organic tea. In 2012, with a £16million turnover and some ninety staff, the company was acquired by Royal Wessanen, a Dutch group which owns food brands such as Kallo, and Whole Earth.

Another international brand incorporates the name of the county. Dorset Cereals, credited with establishing muesli as both trendy and premium, was acquired by Langholm Capital and then the Wellness Foods Group (owned by Irish horse racing tycoons JP McManus and John Magnier). The hessian-and-flax effect packaging blends with a Farrow & Ball decorated kitchen

Robert philpott


(the paint and wallpaper manufacturers are also based in Dorset), and today, the company has broadened its range from a dozen different muesli styles to include granola and breakfast bars, selling to seventy countries, and has a been engaged in talks about a partnership arrangement in China.

For years, cheese was merely a by-product of the much more lucrative butter market. Milk was of little value before the railways as it couldn’t be brought to market before it went off, so cheese and butter production was the main focus of dairy farms. Dorset butter was highly regarded in London where it fetched a premium price but making butter left the farmers with large quantities of skimmed milk which they turned into a hard, crumbly cheese.

Dorset Blue Vinney was the most common farmhouse cheese for hundreds of years until production ceased in the 1970s. Woodbridge Farm revived the old recipe a decade later.

Meanwhile, Ashley Chase had become the largest agricultural estate in hand in Dorset as well as one of the largest in south west, owned by Louis Littman, the scholar and businessman who in 1966 turned his hand to farming. In twenty-two years, Ashley Chase had grown to almost 3000acres, become a highly efficient dairy farm, one of Britain’s largest producers of goats’ milk, and was a prize-winning manufacturer of cheddar cheese.

When he died, the estate was split between his two sons. Ford Farm took over the cheese-making mantle. They produce a hand-made farmhouse cheddar wrapped in cloth and matured deep in the caves at Wookey Hole for six months, where it’s something of a visitors’ attraction. “The humidity and temperature doesn’t change in the cave,” explains finance director Claire Pike. “It’s more natural than a cold store.

“We couldn’t compete with automated producers. Our traditional approach with open vats treats the cheese as a live product, with recipes which can ‘move’ on a daily basis. We have sixty staff and our cheese is hand-formed.”

Today, a third of production is exported - the USA is their main market - which is where they have two sales representatives, in New York and Seattle. The Ford Farm Coastal brand is the biggest selling English farmhouse cheddar in the US, where there is a taste for blended cheese

- one with chocolate in particular.Ford Farm also make a potted

cheddar to a exclusive (Pike described it as “secret”) recipe (it includes alcohol) for Harrods.

Another line is cheese wedding cakes, with a different cheese for each layer, all decorated with fruit and flowers. A two-foot tall version will cost about £60.

www.bombcosmetics.co.ukwww.lush.co.ukwww.nealsyardremedies.comwww.dorsettea.comwww.clipper-teas.comwww.dorsetcereals.co.ukwww.dorsetblue.comwww.fordfarm.com

Different approach tocontinue life saving“When an organisation is the best part of 190 years old, it’s very easy to look backwards, but regardless of its heritage, the RNLI has to know where it is going and to look forward.”

Which is why Paul Boissier, chief executive, has introduced continuous improvement methods to the Royal National Lifeboat Institution in what is called its LEAN Programme.

By the end of 2014 the RNLI will have taken 15% out of its operating costs in three years, which will go to front-line services. “We have asked people in the RNLI to see what we can do differently,” explains Boissier. “So, for example, with our largest lifeboat, the Severn class, maintenance was at fixed-time schedules. We’ve gone through it component-by-component to see when servicing and replacement is necessary, which has saved £800,000 a year.

“It means we can consider new initiatives without having to ask more from the public.

“Volunteers have made up our crews and fund-raisers, but we could bring in people with particular skills, such as solicitors, to do some work with our legal department. We’ve got sixty-five non-traditional volunteers working with us. I’m not making a political point here, but this is a big society initiative. We’re getting new DNA in and at the same time giving people a powerful reference point, an opportunity.”

All of which, says Boissier, will enable the RNLI to fulfil its role, which is

to save lives, over 400 a year as well as assisting 25,000 others in distress, covering 19,000 miles of the coastline of the UK and Ireland. There are 235 lifeboat stations plus 170 beaches patrolled by RNLI lifeguards: local authorities and land-owners contribute to the lifeguards’ wages, and the RNLI funds the training and equipment.

Of our crews, only one in ten had experience of the sea before going out, so there is the huge business of training. “We’re not only asking them to go out and rescue people in waters which are some of the most dangerous on the planet, but to give them first aid when hands and faculties are numb with cold,” says Boissier. “Another strand is that at six hours’ notice we can be deployed for flood rescue. At Cockermouth, in 2009, when water cascaded down the high street at twenty knots, we were the organisation which was best placed to rescue the 200 people there. One of our helmsmen said he had never been in water like that before, despite being at sea.”

Perhaps surprisingly there are four lifeboat stations on the River Thames, the busiest, located just beside Waterloo Bridge, is usually called on at least four times a day, often dealing with people in the river and those taken ill on the tourist boats.

For any murmuring in the third sector about the financial clout of the RNLI - it’s the second largest charity by income stream after Cancer Research UK - the organisation only has an eight-month cash contingency in the bank. “”The generosity of the public enables us to find the £140million a year it costs to provide the service; that equates to a requirement of £400,000 every day of the year,” explains Boissier. “Of any charity, our capital expenditure is considerable. A lifeboat station exposed to the elements will cost £7million to build; a new lifeboat is in the order of £3million. On land at our Poole headquarters we will be constructing a £11.2million facility to build and maintain all-weather lifeboats in house, which will save us £3.7million a year.”

It won’t be the only RNLI production facility. When the company which made composite hulls decided to sell, the charity acquired the facility at Lymington, fearing that otherwise it might have to source them from overseas.

Fundraising is rather more sophisticated than tin rattling - legacies


provide sustainability - but the commercial arm of the RNLI has a £40million turnover, including the sale of 7.5million Christmas cards a year.

And there is a uniqueness to the British way. In the USA, for example, sea rescue is bound in with the coastguard; in France there is part state-funding. “We do not seek any government funding,” says Boissier, “so there is no political interference. It means we are answerable to the public, and there is a local pride, a sense of ownership in a community of its lifeboat station.”

www.rnli.org

Teachers open tohelp the countyOne of the problems with career development is that managers and directors finally get enough stripes so they don’t have to deal with customers direct.

James Bawa, chief executive of Teachers Building Society, has found a way of squaring that particular circle. If he or a senior colleague is in the office either side of nine-to-five and the phone rings, they answer it. “If everyone is compelled to speak to the customer, even if it means saying at the end of the conversation that we’ll get someone to back to them, then we’ll all be engaged with the customer and the delivery of customer service in practice not just theory,” he suggests.

The society was set up in 1966

with lump sum deposits from mature teachers to fund young colleagues at the start of their careers who were finding it difficult to get a mortgage.

Today its services are available to anyone working in education, and Teachers has taken on the mantle of being Dorset’s building society (with the Portman now consumed by the Nationwide) by opening its doors to the county’s population irrespective of occupation. Investments have never been constrained by profession or geography. ‘Locals’ now account for 25% of the society’s roll. “We have got the funds to make that extension, and it means we are taking our role as a corporate citizen seriously.” explains Bawa.

The turning point came when a young couple, who weren’t teachers

James Bawa


but lived locally came in to see if they could talk about a mortgage - their parents were teachers and had been with the society for more than twenty-five years. Bawa saw they left disappointed because they didn’t meet the ‘education’ criterion, and on impulse, ran out and brought them back to the office.

The result. “With the opposite of a heavy heart, we now lend to BH and DT postcodes regardless of job description,” he smiles. Including commercial; 2% of the society’s portfolio is business property. Domestic mortgages with an educational link account for 90%.

There was a commercial imperative for broadening the boundaries. “We didn’t want to die in a ditch because there was only one audience we could only take in money from and lend to,” says Bawa candidly. “But our underwriters are very good at getting the risk right. Last year we handled over 2500 mortgages but there was only one re-possession which was to do with a bankruptcy. The year before there were no re-possessions.

A chartered insurer by profession, Bawa has been with mutuals for thirty of his thirty-one-year career. The Teachers appointment was strategic in that regulations imposed on life assurance companies were being applied to the lending sector, and the ‘been there, done that’ element of his CV - he was previously CEO at Scottish Legal Life - was of value. He now serves as a council member of the Council of the Building Societies Association, and sits on the Finance Service Authority’s smaller businesses practitioner panel. The Teachers appointment was rather appropriate. His mother was a teacher (father was a private detective, and Bawa was born in what was then Bombay).

Not surprisingly, he has a passion for mutuality. “We’re the counter-balance to the banks,” he says. “We hold their feet to the fire. If building societies hadn’t dug their heels in, then banks would be charging for use of the hole-in-the-wall cash dispensers now.

“De-mutualisation has proven to be a busted flush - either the building

society in question has been consumed by a bank, such as the Woolwich by Barclays, or it has floated and got into trouble, and I don’t think I need to give you any examples of that.

“But we’re not seduced by mutuality for the sake of it. Teachers is run with the discipline of a plc but in order to get the best possible return for our members rather than shareholders.”

Nor is Teachers the usual call-centre style of operation. For a start, underwriters and mortgage advisers sit side-by-side which, according to Bawa, means there is more dialogue and a better flow of information. “From the moment someone gets in touch to the day their mortgage completes, they stay with the same person from Teachers,” he explains. “That’s the same with investments. And typically our staff are with us for more than ten years.

The management style inculcated by Bawa is inclusive. “Every member of staff has the right to know not just how they are performing but to understand how the organisation is doing,” he says. “Every couple of months we go through all the figures, including our margin, with the team.” The meetings take place over a couple of days, and Bawa points to a definite commercial benefit. “It means if someone says on the phone that they can get a better interest elsewhere, our staff can articulate our position better and with more confidence,” he explains.

That was evident when Bawa got everyone together one Monday morning at the height of the banking crisis to explain to the staff that a letter would be going out to emphasise the society’s strong liquidity in relation to lending and its reserves, in order to put members’ minds at rest. Their reaction was that it was too technical and they re-wrote the text. “After it was sent out, we had just three calls,” says Bawa. “They were all from our non-execs; not a single one from a customer.”

“Customer feedback is the breakfast of champions,” Bawa avers. “When the forms come back we’re looking for where someone has any dissatisfaction.

That information and how it is being addressed is distilled into a monthly report. The trouble is, with the way feedback is sought and managed, most companies prefer to be ruined by praise than saved by criticism.

And he’s not afraid to cite an example of why others might consider the Teachers’ approach to be self-flagalistic. “One of the feedback forms mentioned that the customer’s call had been dealt with in a ‘brusque’ manner,” recalls Bawa. “That broke my heart, so I went down to listen to the recording of the call. We re-visited our training in telephone manner, and I phoned the customer the next morning to apologise and to explain what we were going to do about it as a result of them bringing it to our attention. Of course the customer was surprised that the chief executive had phoned her personally, but I would like to think they have become a great advocate for the society.”

Today, Teachers are thirty-fifth out of forty-seven building societies, with £240million of assets.

www.teachersbs.co.uk


philosophy preferred to formal procedures“Working to a philosophy is better than strictly adhering to formal procedures, because they lead to people, both staff and customers, being taken for granted. I say this without being glib - what we sell is potentially identical to what you will find in other garden centres; the difference is culture and the customer experience.”

Martin Stewart is managing director of D Stewart & Son, arguably the pioneers of garden centres in the country.

Charles Stewart, the great, great, great grandfather of the current MD was a Scottish plantsman in the 18th century, whose son traded under the name John Stewart of Dundee in the 1830s. One of his sons, David, came south to open a nursery in Dorset to grow less hardy stock.

During the 1950s, D Stewart & Son, as the business was known, became the first to introduce container grown plants into the UK, and with the opening of the first purpose-built garden centre in the country, GardenLands at Christchurch, in 1961 could also lay claim to have invented out-of-town retailing. Ironically, today what is unusual about this garden centre business is that it still grows its own plants, an operation which is soon to include a 5000sqft totally automated greenhouse.

“GardenLands also opened with a coffee shop - how long did it take for the national retailers to look into it,” smiles Martin Stewart.

“My father tried to persuade me to join the business by reverse psychology,” recalls Martin. “ He encouraged me to join the Royal Navy to fly helicopters, but then I was drawn to the retail side of the business on my own accord. A few

months later, we were driving to work on a Saturday morning, stopped at some traffic lights, I turned to dad, and said ‘I’m loving this’. He died on the Monday.”

Aged twenty-three, Martin Stewart found himself with responsibility for running the business. “Formal training and I don’t get on terribly well,” he admits. “I know the need for it, but I’m worried about formalising everything. Having an experienced member of staff coaching a new employee is a form of training. I want people here to be enthusiasts. Someone said to me I’m lucky to have such good staff, but it’s not luck. My job is to make sure we don’t employ people who don’t really want to be here, otherwise they just become unhappy, which has a negative influence on other staff and the customer.

“When I talk to our staff in the garden centre, the kitchens, the workshops, I remind them that they know best what their job entails so it’s their responsibility to tell me what is needed for them to do it better. I think any managing director has to look - and talk - well beyond the management team.”

In the early 1900s, D Stewart & Son were dispatching plants all over the world, although the two world wars took the wind out of that part of their business. The company also did landscape gardening, even turning its hand to golf course construction. Chelsea Flower Show? “Dad said forget about that,” smiles Martin Stewart. “He said we’ve got 365,000 potential customers in our catchment area; let’s focus on them.”

In the seventies a second garden centre was opened fifteen miles away. At both garden centres on Thursday late evening opening there is a programme of jazz and folk musicians to serenade customers

as they look at the plants or take an early supper. The Santa’s grotto has real reindeer, and when Foot and Mouth threatened both trade and tourism,

D Stewart & Son responded by building the world’s biggest maze with nine-and-a-half miles of pathways. It drew visitors for three years until the local authority decided it would charge business rates.

But these are enhancements, not diversification. Some 70% of sales come from plants, garden furniture and equipment; the balance from gifts, catering, and Christmas. Then there’s the interior landscaping side, covering some 500 commercial premises in the south.

“I want to build a business of local significance,” says Martin Stewart, “which isn’t the same thing as setting out to conquer the world.”

www.stewarts.co.uk


Virtuous circle way tobuild relationshipsFor twenty years Nick Dunkerton was a structural and highways engineer before being persuaded to join Glossbrook Builders by its founder Terry Fox, becoming a shareholder and managing director a decade later.

A turning point for the contractors came four years after the business was established in 1985, when the company had a site with planning permission for fourteen houses but little prospect of finding first-time buyers (“any buyers,” Dunkerton interjects). He decided to

offer the site to a housing association as a package, which included the construction contract. On the back of that, Glossbrook started to take options on other sites, selling them on for social housing once planning permission had been gained.

The company had also completed its first office building. “It was at Bournemouth International Airport, and although we hadn’t built a commercial property before, we knew the father of the owner of the business, and he had faith in us,” explains Dunkerton. “But while we are on site, a dapper chap in a Mercedes sports car pulled up and came over to talk to me. He owned the

surrounding land and wanted to work with one construction company. We went on to build five of the seven office buildings here, including the headquarters for Meggitt plc and Hobbycraft.”

The proliferation of hordings meant that the area became known as Glossbrook Corner. Today, Glossbrook are purely contractors, with 90% of their work represented by housebuilding (mainly private residences). The company has an £11million turnover, with a margin of about 7%.

“We don’t have a claims culture because we tend to work on a fixed price basis,” explains Dunkerton. “Basically,

nick Dunkerton


the price is the price. If the client wants to make a change, then we’ll ‘open book’ it in advance so they can see what the additional cost is up-front. That means that we are building a relationship with the client. If they are happy with the quality of the work, that the building has been completed on time, and there are no areas of conflict, then we have the opportunity to build for them again.”

A simple enough maxim, and one which is reflected in the company’s approach to drawing up contracts. “Here’s one for a £650,000 job,” says Dunkerton, tapping a folder on his desk. “All the client has to do is confirm in writing they accept the price and then we just get on with it.”

It’s part of a virtuous circle. “If a sub-contractor invoices us on the twentieth of the month, they are paid on the thirtieth,” says Dunkerton. “We don’t hold back retention money. It means that sub-contractors will give us their keenest price because they know they will be paid and on time.

“I like to be involved, so when we are about to hand over a property to a clientage and someone needs to run the Hoover over the carpet, I’m happy to do it,” says Dunkerton.

But don’t mistake that for homespun. When Dunkerton received a text one Monday morning from a firm of groundwork contractors saying they were no longer able to continue in business (and thus wouldn’t be on one of his sites), by the Wednesday he had taken on fifteen of their staff.

www.glossbrook.co.uk

mind-set delivers whatthe customer wantsWhile they haven’t the iconic status of an Eddie Stobart, arguably Wyvern Cargo trucks are just as distinctive in their orange livery with a motif which is the half-dragon, half-serpent emblem from King Alfred’s battle standard. And the strap line ‘Another Load off your Mind’ demonstrates marketing savvy.

It was in 1975 that chairman John Probert started the business as Dorset Star Warehouse, moving to a 20,000sqft warehouse a year later. In 1981 an ANC Express (now FedEx) franchise was secured, but by the early nineties, with the company name changed to Wyvern Cargo, 50% of the work was independently sourced and related to haulage rather than parcel delivery. Then the company had six vehicles. Today the fleet extends to sixty trucks and forty vans. “The franchise got us out into the market,” explains Probert, “but we wanted to develop as an independent business as well. The parcel business gave us the financial platform to build haulage.”

As well as a competitive edge. “When a customer phones for a parcel collection, they expect to be told exactly when it will be delivered,” says managing director Evan Sparrowhawk. “We applied that same discipline to haulage, giving the customer not just the day but a time.

“It’s all down to mind-set. If a customer wants something, then our default position has to be wanting to find a way of meeting it. Their requirement might change at very short notice, and our people see that as an opportunity to rise to the challenge rather than as a problem.”

And there’s empirical evidence that he’s describing a culture rather than indulging in MD-speak. The company employs 140 people and has always had less than 1% staff turnover.

In 2003, Wyvern Cargo opened a 35,000sqft purpose-built facility on a 3.5acre site in Poole (there’s a second facility on a smaller scale in Northamptonshire). That enabled the launch of a brand extension, Wyvern Easyfast, a document storage service.

In addition, the company is part of the Fortec pallet network, with fellow hauliers delivering to a central hub in the midlands, and then taking back a load to

their particular neck of the woods. “If a customer say in Southampton wants us to deliver to Aberystwyth for example, we can decide whether it’s more efficient to send our own lorry up there or go through the hub,” explains Sparrowhawk. It’s an evaluation worth making as the company’s annual derv spend tops £2.5million. The company is upfront about fuel surcharges, posting the fuel cost figures each month on their website.

According to Sparrowhawk, the biggest threat to the business is not so much competing hauliers and carriers but the risk of manufacturing business relocating elsewhere. “I am concerned that there’s a shortage of land and buildings for modern industry,” he explains. “It isn’t in anyone’s interests if Dorset becomes just a tourist paradise because that isn’t a sustainable economic model.”

What would help is what he describes as “an adequate highway” linking Dorset with the national motorway network - apart from Cornwall, the county is the only one in the south-east and south-west not to have a road with an M prefix.

“In the Department for Transport Modern Ports policy document, it states that the port customers use may depend not only on ease of access to consignments and the speed with which these pass through the ports, but also on the quality of transport links to inland destinations,” says Sparrowhawk.

Not encouraging then for a former MD of Brittany Ferries (which reduced its sailings from Poole to Cherbourg despite it being the shortest crossing in the western Channel) to declare:” “Poole, along with Weymouth, has the most archaic access that I am familiar with in all Europe.”

“We should see this as an urgent call to action,” suggests Sparrowhawk.

www.wyverncargo.com

Harbouring bestintentions for portJim Stewart was a shipbroker at the Baltic Exchange for twenty years before setting up his own business, selling it, doing an MBA, becoming managing director of a ship-operating company for three years - before being appointed chief executive of Poole Harbour Commissioners in 2002.

PHC are responsible for the largest


natural harbour in Europe (10,000acres) and a sixty-acre unionised port (although the last industrial action was in 1992). “Our role is to maintain an appropriate balance between commercial, leisure and environmental considerations,” says Stewart.

“It’s probably fair to say PHC hadn’t changed much over the years. At the time I joined for example, Brittany Ferries accounted for 55-60% of our business; now it’s 20%.

“There has been a 30% drop in cross-channel passenger numbers through the port, which is mainly the ripple effect of the Channel Tunnel. Ferry operators no longer have duty free sales and are now having to compete with allow-cost tunnel which has had debt written off,” muses Stewart.

“The days of ferry companies signing fifteen-year contracts are over; today they are looking for one-year rolling contracts. Cargo (bulk products such as Purbeck Clay, and timber from the Baltic up 50%) and cruise ships (Hebridean Island and Saga are two of the lines which call at Poole) make up the difference, and Stewart says PHC are “more savvy” in utilising their portfolio, converting an old cargo berth to a 90-vessel marina for example. The development of a marine-based business park is another consideration.

And there was a significant £2million project in 2006 to dredge the main six-metre channel to seven-and-a-half metres, based on the need to accommodate bigger ships. “The nature of ports is that customers come and go,” says Stewart. “We used to handle steel for the automotive industry, but a rail-head was established at the Swindon factory and the steel comes through the Channel Tunnel.”

Poole is a trust port, which has lots of stakeholders but no shareholders, and without funding from government (local or national) or an ultimate owner, it has to generate its own revenue to fund the management and development of the port and harbour. The port pays corporation tax on profit and has to fulfil a statutory duty to provide pilotage services and to manage the harbour; on a summer’s day with 2000 boats on the water, and a narrow harbour entrance, that can require five patrol craft. There’s a board of twelve commissioners, made up of two directors, a union rep and nine appointed

interested parties in the community (the latter appointed on three-year terms).

There is a rail link right onto the quay but it hasn’t been used for years. “Conventional wisdom says that rail is only a consideration for moving cargo in excess of 150miles,” says Stewart. “Rail has been surprisingly expensive compared to lorry. But if we attract more small container ships, and fuel prices continue to rise, we might soon see a tipping point.”

Which could be just as well as although the new £37million Twin Sails bridge will ease traffic into the port - it’s wide enough to simultaneously accommodate lorries in both directions - the roads north are distinctly rural.

“There is no point wasting time in lobbying for a motorway from Poole to Bristol and the M4, because in terms of cost and the environmental lobby it’s not going to happen,” says Stewart. “But it means that nearly all of our traffic goes east to the M27 and then up to the midlands on the A34.”

Stewart calculates that the port generates £50million a year for the local economy. And PHC are prepared to speculate to accumulate more tourist revenue. They’ve reduced short-term harbour dues by some 45% for 2013.

Meanwhile, a new business development manager has been appointed (especially to look at expanding dry cargo activities) and a master plan, following an eighteen-month consultation process will include a number of capital projects such as a new deep water quay, a new marina, and a Poole Harbour Awareness Centre, which should increase visitor numbers to Poole Quay.

www.phc.co.uk

Report written and compiled byDECISION magazine

www.decisionmagazine.co.uk

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