54 roundtable: business analysis ... continued from previous page
future, Fourfront might consider a referral partnership with like-minded overseas design companies, he suggested.
Framework agreements could be very helpful in establishing equitable relationships and the strategic requirements of the ultimate client, said Tinniswood. They also helped “open more doors more quickly” particularly for a proven but smaller company within the framework partnership.
Murray queried if CH&Co would be venturing into new products and catering styles.
Tinniswoood revealed that the recent acquisition of the Apostrophe Restaurant Group was opening up brand new opportunities to grow on the High Street as well as the introduction of the brand into new and existing contract catering environments such as the workplace and day-visitor attractions.
Nick Hicks
Dowling said Blandy & Blandy had recently joined an international network of law firms to add service value by helping to cater for the legal requirements of its multinational clients. Her firm is also finding an increasing demand for business immigration advice from her team, in particular from US organisations in relation to their interests in the UK.
Tinniswood commented that CH&Co was currently focused on growth in the UK but was exploring additional opportunities in existing and potential new market sectors.
Ridgeway was only UK-focused too said O’Hanlon. “There is an international motor retail model in companies like Sytner Penske, Pendragon and Inchcape, but that’s not us. We are a regional business, located within a 90-minute drive-time from Newbury.” Future growth – Ridgeway has more than doubled in three years – will come from UK M&A, moving the company internally “from good to great” and exploiting any headroom in existing markets.
Kavanagh saw acquisition as a big opportunity in his sector, particularly with many owners looking to sell, having ridden out the downturn and with their businesses now relatively healthy. Surprisingly, there seemed to be a lack of appetite for younger partners to buy-in for business successions, said Kavanagh. He revealed that the Romans Group was aiming and on target to double its turnover and profit in four years through acquisition and organic growth.
Lucking: “We have quadrupled in five years in a very depressed market, and will now be aiming to add additional services and potentially grow into the north with a satellite office.” The scale and scope of Fourfront might also now enable it to partner on a strategic level and gain framework agreements with major corporates. His company plans to be less a reactive contractor and more a proactive adviser, providing thought leadership, workplace analysis and innovative design options.
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“It is more important to be quick to respond to the market. We are continually innovating within our menus and do food development to ensure we are offering something unique while we continue to serve the old favourites to a high standard.”
Threats: planes and votes and trains
Murray highlighted the uncertainty over the future expansion of Heathrow. Stradling mentioned:
• The EU referendum. “We need to tread a very careful balance in terms of how we ultimately co-exist with Europe because if we mess that up from a regional economy perspective that will have an impact on inward investment flows.”
• Interest rate increases. Consumer spending had largely driven the recovery, not export-led growth, he noted. “I’m not worried, but am intrigued about how the public will react when interest rates start moving, probably around March or April next year. We don’t know the answer.”
O’Hanlon was equally concerned about the referendum risk, or indeed any other ‘bumps in the road’ that he could not control. “We saw the panic in Scotland. Businesses hate uncertainty and come the result, the relief in the markets was palpable.” The 2015 General Election was another uncertainty, he noted.
Hart spoke about “the window of opportunity during stability” when businesses often tried to make their moves, particularly to get M&A transactions through. “Has anybody said: ‘I’ll wait and see what the General Election holds?' Well no, instead there has been stability over the past 12 months and a gathering momentum around transactions, particularly involving US buyers.” Confidence was not back to pre-recession levels, decision-making was more considered, and transactions were taking longer – the General Election and EU referendum would simply introduce further layers of uncertainty.
David Murray
Lucking said the housing market would find its own sensible level. “It’s self-determining. House prices depend on people paying them.”
And west London newcomers would boost consumer spending in the local economies where they lived, noted Murray.
O’Hanlon pointed out that rising interest rates would lead to pressure on employers and wage inflation.
Murray added that auto-enrolment pension costs would impact far more businesses soon as SMEs became involved. Dowling agreed it would bring a major challenge for many SMEs, who would have to factor in costs down the line.
“It’s another stealth tax,” Lucking commented. THE BUSINESS MAGAZINE – THAMES VALLEY – NOVEMBER 2014
Lucking reiterated that Fourfront’s biggest threat was the poaching of its star performers, which would threaten the delivery of quality products and services to the company’s clients.
Dowling echoed this, mentioning the risk of young lawyers, well-trained locally by Blandy & Blandy, “catching the fast train up to work in London”.
Kavanagh highlighted the double-edged sword of Crossrail – being able to bring and take talent between London and the Thames Valley. He also noted the rising cost of living in the Thames Valley. “Two people with good jobs can still struggle to buy the most basic property. And, we’ve had candidates coming to us, getting the job, then turning it down because they can’t afford somewhere to live locally.”
Stradling: “The Crossrail concern is that people will choose to live in the Thames Valley but work in London.”
Kavanagh revealed it was already happening. “One of our housebuilder clients told us that over 50% of the property he sold in Maidenhead last year was bought by people moving out from west London because of Crossrail. The price differential between Maidenhead and Reading is already significant. Maidenhead is west London now, but the rest of the Thames Valley still looks good value.”
THAMES VALLEY 250
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