R E F L E C T I O N S
W I N T E R 2 0 1 1
A FORCE FOR GROWTH | OUR 2011 VINTAGE | REALISING VALUE | MADE IN BRITAIN
GREEN PIONEERS | LDC ASIA | TOP TABLE COUNSEL | LDC IN THE COMMUNITY
A force for
Welcome to Reflections – a collection
of news and opinion from the LDC
team, portfolio and communities.
Chief Executive, LDC
We have produced this edition
against the backdrop of a perceptible
weakening in confidence, amidst
fears that the financial crisis is
entering a new stage of contagion
and concern that economic growth
will continue to prove elusive as
we move into 2012.
As ever, at LDC, we try to tell it like it is.
It is undoubtedly tough but I simply do not
recognise the blanket negativity which seems to
pervade across all media channels. Indeed, many
CEOs I speak to will say privately that business,
whilst challenging, is pretty good but feel that the
prevailing mood music encourages them to stay
silent and keep their head below the parapet. This
3 A FORCE FOR GROWTH
5 OUR 2011 VINTAGE
7 REALISING VALUE
9 MADE IN BRITAIN
11 GREEN PIONEERS
12 LDC ASIA
13 TOP TABLE COUNSEL
15 LDC IN THE COMMUNITY
Business must stand up for itself and reinforce its
central role in both wealth creation and job creation
which are the two key foundation stones of a return
to growth. We must also lobby politicians and the
press to do more to support UK companies and
their massive contribution to national prosperity.
Most of all, this requires action not platitudes.
From my perspective, it really isn’t all doom and
gloom. I try to meet all the management teams
of prospective new deals and stay in touch on a
regular basis post investment. In many ways, this
is the best part of my job. I am always struck that
the characteristics that link most CEOs across our
portfolio is their grounded optimism and refusal to
be beaten. A telling statistic is that more than 60%
of our portfolio continues to trade ahead of prior
year. You do not see this reported in the media!
This performance does not happen by magic.
Our businesses are constantly reappraising
themselves and their performance. This
includes researching and accessing new
markets, redesigning operations to drive up
efficiency, strengthening resources and, with
our support, taking advantage of weakened
competition to make acquisitions to gain
scale and market share.
LDC, itself, has had to respond to these
challenges over the past few years, in
particular to our changing market place and,
especially, the challenge to the role of private
equity in wealth creation.
We have continued to invest in our
operational capabilities and our regional
network. We have developed our in-house
expertise by recruiting individuals who have
successfully operated, turned around and
grown businesses in a wide variety of sectors.
These skills have proved invaluable in the
Our Value Enhancement Group is now
actively engaged in around half of our
portfolio companies, helping to design,
support and implement a range of strategies,
including capital reduction programmes,
improved sourcing, lean manufacturing and
sales management effectiveness.
We have also continued to develop our
operations in Asia. Our Hong Kong team
is helping an increasing number of portfolio
companies to access new markets with
reduced risk and faster pay back whilst also
accessing lower cost manufacturing and
more efficient sourcing.
Finally, we have focused on supporting
the growth ambitions of portfolio
companies and over the past three years,
more than one third of our portfolio have
made acquisitions which will enhance
exit prospects and drive a significant
Most importantly though, throughout
this period of change and development,
I believe we have stayed true to the core
business principles which have served us
well over many years.
We have also delivered on our commitment
to invest throughout the economic and
business cycle. In 2010, we invested
£305m in 20 businesses, taking our five
year aggregate investment to more than
£1.3bn. In 2011, year to date, we have
invested £256m in 12 new businesses,
plus a further £40m into existing portfolio
businesses to support growth acquisitions.
We have also invested £65m in two
Next we have maintained our position as
the leading regional investor in the private
equity market. This is not only a highly
profitable strategy, but also it enables us to
stay close to the communities in which we
operate and contribute to the growth of
SMEs across the UK.
Finally, we have stayed true to our
belief that private equity is ultimately about
supporting and liberating high quality
ambitious management teams. I firmly
believe this is the single biggest factor
that underpins LDC’s success.
I remain convinced private equity is a
force for good. Over the next five years,
we plan to invest around £2bn in around
80 businesses. We have recently launched
two significant new initiatives; a TMT focused
commitment based out of our London
office and a Specialist Engineering and
Manufacturing commitment based out of
our Birmingham office which is highlighted
in further detail on page 9.
We have also continued to expand our
network of non-executives who we believe
play a crucial role to board effectiveness and
driving value. On page13, a number of our
non-executives hold a fascinating round table
discussion on overcoming the challenges to
growth in the current environment.
Elsewhere, you can read more about
our broad commitment to wealth creation,
job creation and supporting the SME sector
(page 5) and about our amazing charitable
fundraising endeavours (page 15).
To conclude, I encourage everyone in the
business community to talk up the role of
business in leading the recovery and lobby
all elements of the media to report the
good, not the just the bad.
TRANSACTIONS AND EXITS 2011
Our new investment teams across the UK have
continued their focus on building a balanced
portfolio of businesses throughout 2011,
diversified by size, sector and structure.
Small, disruptive technology-led businesses like musicMagpie.co.uk
and eConveyancer, international industrial groups looking to achieve
increased scale such as A-Gas, fast-growing consumer brand
owners like Original Additions, service providers operating in highly
fragmented, growing sectors, such as live events and marketing
group WRG, web hosting business UK2 and online learning
provider learndirect, to name a few.
Again, the same investment hallmarks are in evidence throughout –
ambitious management teams looking for LDC’s trademark mix of
added-value support and growth capital to realise their plans.
To this, we’ve also added some outstanding non-executive firepower
to their boardrooms – from retail veteran Allan Leighton’s appointment
as Chairman of musicMagpie.co.uk to former BBC Chairman Lord
Michael Grade’s non-executive role at WRG.
Building on our 2010 commitment, in the first 10 months of the year,
our new investment activity has seen our teams deploy £256m of
equity across 12 new businesses (see over).
Across these transactions, pricing has remained competitive and deal
structures conservative – two features of our market which we anticipate
becoming the norm for quality assets in a credit-restricted environment.
We’ve also supported the ‘buy and build’ strategies of our existing
portfolio companies with a further £40m of equity funding, enabling
them to accelerate their plans through strategic acquisition programmes.
This includes transformational mergers such as the combining of
document management group Sala International with EDM Group.
Looking ahead, we believe our expertise and appetite for ‘buy and
build’ will be a key thread of our value creation strategies.
Given the relevance of LDC’s model – our focus on operational
enhancement and driving organic and acquisitive growth –
we’re convinced this year’s vintage will be one of our finest.
With the same goal of diversification, we’ve also made further
commitments to two experienced funds specialising in niche sectors.
In July, we committed a further £50m of equity to Epi-V LLP – a fund
which focuses on backing breakthrough technologies in the upstream
oil and gas services sector – and £15m in October to a new fund
raised by Scottish Equity Partners – which focuses on venture capital.
TRANSACTIONS AND EXITS 2011
UNITED LEGAL SERVICES (Econveyancer)
Software developer whose products are used to deliver online legal services
such as conveyancing and legal searches for the residential market
THE COMPLEAT FOOD GROUP
Leading supplier of high-end continental chilled and speciality
foods to the UK supermarket chains
Supplies its innovative fall protection solutions to over 35 countries
from operations in the UK, US, Canada, Germany and France
Purchaser and multi-channel retailer of replay CDs, DVDs and games
with customers in 80 countries
Specialist blender, re-packer and distributor of speciality gases and
chemicals to the refrigeration and insulation foam industries, focused
on environmentally acceptable replacements for CFCs
Provider of domain name registration and web site hosting services
to customers around the world
Franchised provider of temporary and permanent personnel to the logistics
and distribution industries with over 100 offices throughout the UK
Beauty products supplier with a portfolio of market-leading false
eyelash brands - Eylure, Miss Wax and Elegant Touch
Supplies and services more than 45,000 bottled and mains-fed
water coolers on behalf of 24,000 customers across the UK
Live events and marketing agency with ambitions for overseas growth
Leading online learning provider with more than three
million adults receiving training since 2000
Evander Group consists of one trading division – Evander Glazing
and Locks, a nationwide market leading emergency response
provider for glazing and locks
TRANSACTIONS AND EXITS 2011
Building value in the
a proactive and
has long been
the driver of our
Never is this more crucial than during a time
of economic challenge, where only the highest
quality assets achieve the strategic premiums
that we strive to deliver.
The investment strategies we develop with
management teams seek to achieve truly
transformational change – in size, scale,
geographical reach, depth of proposition,
scope of services and more.
This approach typically results in an asset with
considerably larger market size, turnover, export
sales, profitability and employee count – hard
metrics on which the impact of private equity
investment on true economic growth can be judged.
“This is the brand of private equity which the UK
economy needs to secure a sustainable recovery,”
says Darryl Eales, Chief Executive of LDC.
“There remains a perception that private equity
generates returns through leverage, asset-stripping
and financial engineering – the ogre of the
economy and a destroyer of value.
“That’s why our industry needs to come out of the
shadows and demonstrate its credentials in value
creation, job creation and wealth creation. Private
equity needs to position itself as the gateway to
enterprise and a catalyst for growth for ambitious
Last year, we realised our investments in seven
companies - Card Factory, Kylmar, VSG, Omega
Red, CMG, Porterbrook and British Salt – all
businesses we had backed before, and supported
during, the downturn. Collectively, these transactions
produced capital gains in excess of £200m with
a realised IRR of 41 per cent.
In 2011, we’ve exited eight investments, realising
capital gains of more than £80m to date with an
IRR in excess of 38 per cent. “As well as building
strategic value, our expertise in exit timing and
exit route have once again helped us achieve
outstanding returns,” adds Darryl.
Read the highlights from some of our
We backed the MBO of Aesica, a contract
manufacturer of active ingredients for the
pharmaceutical sector based in the North East,
from BASF in 2004.
With demand for outsourced manufacturing
capability increasing from major drug producers,
we helped to expand the business’ services,
international reach and manufacturing
capabilities through a programme of
operational improvement and acquisition.
A total of five acquisitions were made during
the seven year period, adding strengths in
potent compound and bulk manufacturing and
formulation development, while adding both UK
and international capacity with additional sites
in Germany and Italy.
At the time of our exit in September 2011,
Aesica was repositioned as a through the
cycle, added-value outsourced manufacturer,
with expertise in both primary stage
pharmaceuticals and secondary stage
manufacturing including the delivery of
finished product dosage to its customers.
During the investment period, turnover increased
seven fold from £25m to £180m, while profits
rose considerably during the same period.
This growth had a major positive impact on
headcount with the number of employees rising
from 150 in 2004, to 1,300 across six sites.
Under new ownership, the business is ideally
placed to further expand its presence outside
of Europe into the US and Asian markets.
TRANSACTIONS AND EXITS 2011
LDC backed a £10m MBO of the business in
January 2005, acquiring the company from the
UK and French insurers British Aviation Insurance
Co and La Reunion Aerienne.
At the time, Airclaims employed 80 people at
its Heathrow base, with a further 60 across 10
In 2005, Airclaims was one of the world’s
leading providers of claims adjusting services to
the global aerospace industry, with customers
including airlines, airports, insurance brokers and
underwriters, the financial community, regulators
In addition, it also had a small information and
consultancy division which supplied aircraft data,
analytics and advisory services to the aviation
community. This division was well regarded by
its customers but, at the time of the MBO, the
operation was sub-scale and lacked investment.
One element of the investment strategy
involved spinning off Airclaims’ information and
consultancy arm into a separate company and
investing heavily in the business to create a global
aviation information provider.
Within months, a new management team was
identified and appointed – led by CEO Gehan
Talwatte - to deliver the strategy, and Ascend
Worldwide was formed in 2006.
The team quickly set about transforming the
business as a technology-enabled provider of
information based services.
LDC also supported the scaling up of the business,
with offices opened in New York, Hong Kong,
and Tokyo, assisted by a further £6m injection
of equity funding in April 2010.
Meanwhile at Airclaims, the original MBO
management team – led by CEO Mark Hunter
– similarly began expanding the business’
service offering and geographical reach. In the
subsequent five years, seven new offices were
opened in the fast-growing economies of India,
Brazil, Mexico and South Africa, as well as
the US and Australia, while new services were
developed to complement its core loss
The introduction of a new operating structure,
aligning the business into major global territories
to enable a more integrated sell to its customer
base, also resulted in accelerated revenue growth.
In 2010, we identified Reed Elsevier’s RBI
(‘Business Information’) unit as a potential
strategic buyer of Ascend, given its interest in
developing its presence in the aerospace
market. The business was subsequently sold
to its Flightglobal division.
Earlier this year, we identified McLarens Young
International (MYI), one of the world’s largest and
most comprehensive suppliers of loss adjusting
services to the aviation industry, as a potential
acquiror of Airclaims, concluding the sale in
From our investment to the point of exit, Airclaims’
fee income and profits had more than doubled,
while Ascend’s turnover tripled to over £12m
with profits growing from break even to £3m.
The businesses also employed 155 and 85
people respectively – a total increase of 100
net new roles since our original investment.
Davies Group is one of the UK’s leading
providers of claims management solutions to
the general insurance industry, managing over
125,000 claims each year on behalf of a
customer base which includes the majority
of the UK’s leading insurers.
LDC originally backed an MBO of the business in
February 2008, investing £8.6m.
During the last three years, LDC has supported
the management team in a significant programme
of operational development, driven by major
investment in new systems, processes and
technology to increase the speed and quality
of its claims management services for clients
The strategy has helped the business to deliver
strong organic growth during the period while
operating profits increased from £3.5m to £8.4m.
Employee numbers also increased to over 600
with the creation of more than 200 jobs.
In September 2011, LDC exited its investment
through a £60m secondary buyout led by Electra
Partners, generating a gross capital gain of
£24.1m and an IRR of 45 per cent.
SECTOR FOCUS - MANUFACTURING
MADE IN BRITAIN
HOW UK SPECIALIST ENGINEERING
AND MANUFACTURING AND EXPORTS
ARE DRIVING ECONOMIC RECOVERY
SECTOR FOCUS - MANUFACTURING
Throughout 2011, the
Government has consistently
pushed the message that
home grown manufacturing
and exporting is crucial to
the UK’s economic recovery.
While welcoming this, there was a response
in some quarters that the recognition was
long overdue: that manufacturing has always
been the practical foundation to economic
stability and recovery.
The Manufacturing Institute (TMI) itself
suggests that the sector attracts unfair criticism
partly because it has suffered from an image
problem, of being ‘dead-end, messy and
lacking creativity, with boring assembly
lines, poor pay and a lack of esteem for its
And while the TMI has been addressing the
issue through various initiatives – not least
with schools - manufacturing has also been
We spoke to Lee Hopley, Chief Economist
for the EEF, the manufacturers’ organisation.
She said that despite only accounting for 13
per cent of the economy, manufacturing has
been responsible for one-third of the UK’s
economic recovery so far.
“We were saying how important
manufacturing was 18 months ago but it
has actually exceeded our expectations
in terms of the strength of the recovery so
far,” says Lee.
This is providing a platform on which to
continue to build long term economic
recovery through a dynamic, modern and
competitive manufacturing industry.
“It is clear that the consumer isn’t going to
contribute huge amounts to the economy
but a strong manufacturing sector can take
advantage of trade with economies which
are in growth.”
LDC Investment Director Steve Aston
who, along with Rob Schofield and
Richard Stewart, is leading our £200m
commitment to the specialist engineering
and manufacturing sector, is in agreement.
“There are great UK businesses in the UK
manufacturing and engineering sector at
the cutting edge of their industries, creating
products which appeal to global markets and
help to create jobs and stability in the UK.
“It’s easy to see how recovery can be driven
by this sector. If we, as a nation, are making
things that can be sold domestically and
exported then we are providing vital business
for associated suppliers and service industries
which help package, market and get the
product where it is going.”
Some of the traditionally strongest growth
areas, such as defence and aerospace, have
seen major cuts due to Government spending
but there is talent and a desire to innovate in
the UK which will see these skills absorbed
into the businesses which are driving growth.
“If there isn’t investment, this talent will be
lost,” adds Rob. “More young, skilled
workers are drifting away from a sector
which needs them more than ever as it
continues to prove itself.”
LDC invested in Kee Safety, a leading
global provider of safety solutions,
earlier this year.
The business has grown off the back of increasing
regulation and compliance in relation to safety
procedures throughout the world.
Managing Director Chris Milburn points out that the
business is a classic example of a UK company which has seen recessionary growth
and protected jobs in the UK by expanding its geographical footprint.
He said: “We always had some export business but this has increased to around
65 per cent in recent years. The key for us has been finding partners in the
right territories but also continuing to invest in the creation of our own overseas
infrastructure so that we have control over our products and can deliver high
standards in overseas markets.
“There is no doubt that this strategy, while creating jobs elsewhere in the world,
has also supported and protected around 130 jobs in the UK and allowed us to
continue to recruit, despite the challenging economic conditions.”
For more information on LDC’s £200m three year commitment go to www.ldc.co.uk/sectors/industrials
As sustainability moves further up the corporate agenda due to rising
energy costs and increasing demand from stakeholders, we talk to
Sustainable Business editor Tom Idle and Vincent Neate, KPMG’s UK
Head of Sustainability, about why companies should be changing
processes to coincide with the green agenda.
Sustainability is no longer a buzz word in
business, but an important agenda point
that all companies, regardless of sector
and size, are having to embrace.
Compliance and regulatory pressures,
consumer and stakeholder demand and
rising energy costs are combining to convince
management teams to place greater
emphasis on sustainability.
But by improving processes, managing risk
and innovating strategy, companies are
seeing sustainability pay off in the short-term.
“Sustainability has gone mainstream - no
doubt about it,” says Tom Idle, editor of
Sustainable Business. “No longer is it just
about impact reduction and environmental
protection, although those issues are still
important. Today, more and more businesses
realise that if they take sustainability seriously,
and position themselves as responsible
companies, there is serious money to be
Vincent Neate, UK Head of Sustainability at
KPMG, agrees. He says that risk, along with
opportunity, are the key drivers for companies
taking steps to become more environmentally
“For firms operating in the financial,
manufacturing and consumer retail sectors,
implementing green policies and products
presents obvious benefits. Fairtrade, for
example, continues to be popular with
consumers, despite the economic downturn.
“For the so-called ‘dirty’ industries, such as
oil and gas companies, failing to carefully
consider the green agenda is extremely risky
as legislation increases.”
Operating in an environmentally friendly
capacity delivers clear cost efficiencies and
can create new business opportunities. But
for firms looking to take action to become
greener, it can be an overwhelming task.
Vincent advises taking four steps when
considering the sustainability agenda:
“Firstly, firms need to identify who the
stakeholders are, and what they want. Then
the management team should assess the
legislation currently affecting their business
now and which direction this is likely to take
in the future.
“The business then needs to carefully think
about where it wants to be and put in place
the processes to get there.”
“Measure, manage and mitigate your
impact,” adds Tom, “Lots of companies
do not know the impact they have on the
environment, so that is the best place to
start, with a straightforward audit of
energy, carbon and waste usage.
“Transparent and honest communication is
also key. Regardless of how much work the
business has done, or how much work they’ve
still to do, companies with targets, visions
and aspirations to become sustainable will
be applauded - as long as they are open
Our Hong Kong team is continuing
to leverage its expertise and network
across Asia to support the growth
ambitions of portfolio companies.
One key area of focus since we
established our presence in the
region has been exploring and
developing business partnerships
with locally-based organisations
that can support our added-value
With an area spanning 45 million square
kilometres and with 48 dependencies,
identifying the right partners in areas such
as manufacturing, sourcing, supply chain,
distribution and sales whilst also securing the
right advisory services can be a daunting task
for UK-based companies looking to develop
relationships in Asia and there are significant
Two years on, and we’ve already established
a network of quality partnerships that are
benefitting our portfolio companies. This
approach has helped luggage brand Antler
strengthen relationships with distributors in
the Far East’s fast-growing economies, where
sales are now accelerating faster than the
UK, and also helped Microlease – a leading
supplier of test and measurement
equipment establish a new operation in
China - giving them access to the world’s
largest manufacturing market.
We’ve now extended our partnerships
further in joining with the China-Britain
Business Council (CBBC) – the region’s
most established support organisation
which operates as part of UK Trade &
“ We’re excited about
the new commercial and
investment oppor tunities
that this will present
both for LDC and
our por tfolio.”
With nine UK offices and 11 offices across
key locations in China, Craig Wilkinson,
managing director of LDC Asia, says our
relationship with CBBC will not only provide
value for portfolio companies, but is also
a further demonstration of LDC’s own
commitment to becoming part of the local
“Joining CBBC will not only help us support
the businesses we back in the UK, providing
access to a whole new range of trusted
service partners across an important region
but will also help us identify other UK-based
companies with similar interests in the Far
East,” says Craig. “We’re excited about
the new commercial and investment
opportunities that this will present both
for LDC and our portfolio.”
“It also signals LDC’s commitment to doing
business in Asia, deepening our relationships
with the region’s business community and
helping to create opportunities for us and
our partners to build enduring and profitable
business relationships in the region.”
MEET THE NON-EXECS
Formerly Managing Director at Royal
& Sun Alliance, now Chairman of
the Sun Alliance Pension Fund and
the British Horseracing Pension Fund.
Currently Non-Executive Director
of Fortis Insurance UK and Non-
Executive Chairman of Ai Claims
Solutions and LDC-backed
insurance support services
provider Direct Group.
Lord Michael GradE
Formerly Chairman of BBC, CEO
of Channel 4 and Executive
Chairman of ITV plc. Currently holds
chairman roles at Ocado plc, James
Grant Group plc and Pinewood
Shepperton plc. Non-Executive
Director at LDC-backed live events
and marketing agency WRG.
Previously held CEO and nonexecutive
chairmanships at ASDA,
Royal Mail and Lastminute.com.
Currently Deputy Chairman of
Selfridges & Co., Chairman of
Pandora Jewellery and Non-
Executive Director of BSkyB. He is
Non-Executive Chairman of LDCbacked
Former Executive Director of FTSE
100 services group Hays plc,
Chairman of local authority services
group Orbis plc and Non-Executive
Chairman of Pulse Staffing. Currently
Non-Executive Chairman of several
private equity backed companies
including oil and gas e-learning
provider Atlas, employee benefits
provider Enrich Reward Group and
LDC-backed social housing support
services business Forrest.
With the economy still tempestuous, many management
teams are valuing the counsel of an experienced
“These are the names with the boardroom track record,” says LDC Chief Executive
Darryl Eales. “They’ve got the scars earned in previous recessions and the conviction
to give strong advice to businesses debating the next move – this is critically important
when management teams are operating in a challenging economic climate.”
How do you view the current climate
AL: It’s typified by a lack of confidence which manifests itself in two ways; businesses
and institutions that have cash are more cautious about where they invest it and those
that need cash are finding it harder to get access to it.
There is money out there for investment. I read a report recently which suggested that
British firms are sitting on a £60bn pile of cash. They just don’t know where to invest it
because they want safety.
Bolstering their confidence to unlock that cash is key.
RM: There’s less ‘froth’ out there. Everyone’s a bit nervous about what to do next so
they are holding on and only actually investing when everything looks absolutely
solid. No-one is really taking risks and I see a lot of aborted processes.
All of this contributes to a wider inertia which feeds recessionary fears. Deals make
the market flow.
MG: This can’t go on forever. At my age (68) I’ve seen a number of recessions come
and go and this isn’t the worst. In the seventies the whole country ground to a halt.
The difference here is that the current climate doesn’t feel as cyclical. It’s not as
‘boom and bust’, it’s based on nerves. People are doubly nervous because they
see so much about the global economy these days and it’s harder to determine
how that will impact the UK.
SB: It’s all about risk management. It isn’t the best climate for some entrepreneurs –
the ones that fly by the seat of their pants – although there are opportunities out there.
Liquidity is a problem for SMEs looking for growth. There isn’t the flexibility or
availability for many to feel comfortable about investing in facilities, R&D, innovation,
new markets – all the things which will help to drive recovery.
What does a non-exec chairman offer in this climate
RM: Patience. It’s a time for experienced heads. As a non-exec you should be able
to take a step back and stop people running around doing things which aren’t going
to protect or take a business forward.
Economic uncertainty can create panic – people trying to exit deals too early – and
‘sheep investing’. Experience can help with the discipline businesses need to get
COUNSEL AND CREDIBILITY
where you can grow value for investors. Don’t
go off looking for opportunities that aren’t
there. Focus on good cash conversion and
synergies which offer growth and value.
It’s about running your business well. Good
service delivery and being consciously aware
of your capitalisation and debt positions.
Your banks need to be kept up to speed with
your value creation journey. They tend to be
predictably unpredictable. At the moment,
they operate on formulae and the relationship
people who you dealt with on the way in, are
replaced by the risk managers - so be aware!
shape for exit or
investment at the right time.
MG: Long term wisdom and judgement. The
younger people in business, by which I mean
anyone under 50, do still need those with
grey hairs sometime.
Someone once told me that the one question
non-execs should always ask is ‘why are we
doing well’ It doesn’t get asked enough. We
always look at what’s going wrong and try
to fix it but a non-exec chairman should also
ask what works and why. At times like this it’s
about focusing on what works.
AL: I think we bring context. It’s easy for
people who work in and for one business to
be a bit insular in their thinking. Experience
from outside the primary focus of a business
It isn’t all doom and gloom, certain
companies are doing well. As a non-exec
chairman we should be asking why. Are there
lessons to be learned from other sectors
SB: Experience in a business’ core sector or
relevant experience from another sector. I
actually think boards work best when there’s
a good mix. You need entrepreneurial
heads – who
can be from any sector – and,
increasingly, someone with a good
understanding of regulatory issues who
can ensure good corporate governance,
which is becoming more and more important
in every sector.
Giving advice as a non-exec chairman,
what should firms in our market space
currently be looking to do
MG: Look after their cash and cashflow.
Focus on what their customers want –
whether they are selling to businesses or
direct to consumers, when people are short
of money they want the essentials and they
For examples, areas like cinema attendance
are holding up and doing well because
consumers can adapt and make it a relatively
cheap night out by eating at home. It’s
looking at this downturn behaviour and
adapting to it which can help companies
focus on what matters.
AL: Every business has a DNA and now is not
the time to try and change it too much. Stick
to what you’re good at. What makes money.
If your core offering is broken, fix it. This will
take a lot less time, effort and money than
RM: Stick to what makes you money and
What opportunities exist if firms want
to prepare for the upturn Are theRE
acquisitions to be had
RM: There are acquisition opportunities out
there and it could be a good time to revisit
those you identified before things became
tighter. The froth has gone in the market (and
debt) but you must be sure that you will add
more value and not destroy the positions
which you currently hold. Buy well and you
are half way there.
I think a lot of people are still overpaying for
acquisitions, even in the current market. The
old adage ‘buy well and you are half sold’
MG: You could currently find a bargain
acquisition wise but I would advise that you
concentrate on well-founded businesses with
a solid balance sheet rather than something
that needs turning around.
SB: Boards and their non-execs need to
be good at raising capital and integrating
mergers and acquisition. Opportunities are
still out there for them to demonstrate this if
they can raise the capital to do so.
From my own experience of being involved
with an AIM listed business, the idea of AIM
as a place to raise capital is a fallacy, even
when you have record revenues and profits.
AL: I believe that this will be a consumer
led recovery but that for that to happen,
businesses have to continue to grow so that
they can employ people to earn money
which they can spend.
If that growth isn’t going to come from
existing businesses then we have to make
acquisitions to keep the market growing.
Good opportunities exist, I’d just say make
sure you have a very good business plan for
integrating them into your existing business.
LDC IN THE COMMUNITY
LDC LESS ORDINARY
The people that we meet through our charity support and sponsorship are
some of the most inspiring and over the last year, we have raised almost
£100,000 to support a wide range of good causes, taking total fund
raising over the last seven years to £1.4m.
Read on to find out more about some of LDC’s ‘in the community’ activity.
Row to the Pole
On 26 August 2011, a team of six rowed to the 1996 magnetic North Pole and
became the first people in the world to travel these 500 miles by boat.
The brainchild of explorer Jock Wishart, the crew included LDC ambassador,
adventurer and film-maker Mark Beaumont and Billy Gammon, a director of a sports
marketing agency with a taste for adventure. In 2009, he led the ‘Prostate For
Cancer’ team in the inaugural Indian Ocean Rowing Race (from Perth to Mauritius).
“Being involved with the expedition was bitter sweet, going into the unknown and
being the first in the world to complete the journey by boat was an incredible feeling.
But at the same time, it drew attention to that part of the world which is changing
irreversibly,” said Billy.
There were times when weather conditions meant the crew had to stop rowing for
three or four days and this is what Billy found the most exasperating, “The stop
start nature of the journey was frustrating but when I needed motivation I would
think about the people back at home, supporting me. That willed me on.”
The expedition also taught Billy transferable skills which he will now bring to the
office. “Row to the Pole taught me to take the back seat at times and let the more
experienced mariners be in control. Previously, I didn’t like to ask for help, but
now I know it’s not a weakness, it’s just appreciating other’s strengths.”
The achievement was a true maritime first!
Camp Mohawk 2011
going for gold
LDC-sponsored athlete Meghan is currently in training,
which will hopefully see her compete for Great Britain
in the London 2012 Olympics. A Loughborough
University student, she juggles her studies with
representing England in the 400m hurdles and the
4 x 400m relay.
Most recently, Meghan competed at the
Commonwealth Games in Delhi where, with the relay
team, she earned a silver medal.
Now, it is the thought of competing on the
world’s greatest stage which is motivating Meghan:
“It’s great to run in the relay team as you can push
each other on, but ultimately, it’s down to me to
self-motivate and ensure I am ready to compete.
The 2012 games are always at the front of my
mind when I’m training.”
In April this year, LDC supported another world first,
which saw eight people become the first team of
unsupported war-wounded amputees to reach the
Geographical North Pole.
Walking with the Wounded was set up by Ed Parker
and Simon Daglish to raise funds and awareness of
those in the Armed Forces who have returned from
service with serious injuries and disabilities, and are
still capable of leading fulfilling lives.
The team, who were joined by Prince Harry for
four days, reached the North Pole in 13 days,
covering 160 miles.
From preparing for the trek by dragging tyres around
the lanes of Norfolk, to battling with temperatures
of minus 38˚C, Ed Parker, said the “phenomenally
strong bond between the team” helped them
achieve their goal.
The charity aims to raise £2m to help re-train and
re-skill wounded servicemen and women from the
British Armed Forces. The founders are also
involved in the 2012 expedition to Everest with
four wounded servicemen.
LDC has been a long-time supporter of Camp
Mohawk, a multi-functional day centre for children
with a variety of special needs in the Wargrave
countryside, near Reading.
Throughout the year, the centre provides a range of
activities, facilities and natural space to encourage
visitors to play, socialise and learn in a secure and
This year, our Reading team, accompanied by
members of the local financial and business
community, rolled up its sleeves for the fifth year
running to help spring clean the camp ready for
the busy summer months.
LDC also helped to fund the charity’s first open
day in two years, which was attended by over
Luke Jansen, Co-ordinator at Camp Mohawk,
said after the open day: “This funding from
LDC, along with their sustained support over the
past five years, has been crucial in helping us
constantly improve our facilities to help as
many families as possible.”
BIRMINGHAM, B3 2TA
Phone: 0121 237 6500
Fax: 0121 236 5269
Butt Dyke House,
33 Park Row,
NOTTINGHAM, NG1 6EE
Phone: 0115 947 1280
Fax: 0115 947 1290
3 Temple Quay,
BRISTOL, BS1 6DZ
Phone: 0117 360 1970
Fax: 0117 360 1971
One Forbury Square,
READING, RG1 3BB
Phone: 0118 958 0274
Fax: 0118 956 8991
One Vine Street,
LONDON W1J 0AH
Phone: 0207 758 3680
Fax: 0207 758 3681
Pall Mall House,
Mercury Court, Tithebarn Street,
LIVERPOOL, L2 2QU
Phone: 0151 227 5024
Fax: 0151 236 6773
No1 Marsden Street,
MANCHESTER, M2 1HW
Phone: 0161 831 1720
Fax: 0161 831 1730
YORKSHIRE & NORTH EAST
1 City Square,
LEEDS, LS1 2ES
Phone: 0113 300 2013
Fax: 0113 300 2601
PO Box 686,
Black Horse House,
91 Sandyford Road,
NEWCASTLE UPON TYNE,
Phone: 0191 459 9042
Fax: 0191 261 5934
EDINBURGH EH3 9QG
Phone: 0131 257 4500
Fax: 0131 257 4510
33 Queens Road,
ABERDEEN AB15 4ZN
Phone: 01224 261133
Fax: 01224 326023
26/F, 8 Queen's Road,
Phone: +852 3416 4400
Fax: +852 3416 4401
Lloyds TSB Development Capital Ltd. Registered Office: One Vine Street, London W1J 0AH.
Registered in England and Wales no. 1107542. Authorised and regulated by the Financial
Services Authority. Part of the Lloyds Banking Group.
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