Rising stars: where are they now?
Article Date: Jan 04 2006
At the start of 2005, Business XL honoured 50 ‘Rising Stars’ – growing companies that were leading the way in service excellence, product innovation and sales growth. We catch up with a selection of them one year on to discover whether they exceeded expectations or failed to deliver.
The saying goes that there are only two types of forecasts: lucky or wrong. In the case of Business XL’s predictions for companies to watch in 2005, we were very lucky – with a pinch of expertise thrown in of course! Many of the companies we tipped for great things have had a cracking year and only one bombed. Here’s a look back at some of the leaders and laggards.
A magnificent year for Skype
Including Skype in the Business XL Top 50 Rising Stars last year turned out to be a brilliant judgement call. December 2005 saw the Luxembourg-based internet communications company release a new version of its software that allows anyone with an internet connection to make free internet calls. The software is apparently ‘designed for greater ease of use, has integrated video calling, and enhanced features that allow people to stay in touch and express themselves online’. Skype also announced its collaboration with global headset and webcam partner Logitech, as well as partnerships with webcam manufacturer Creative, and with Weblog software company Six Apart. All of this, of course, followed the small matter of the company’s acquisition by internet behemoth eBay in October 2005, in a deal worth approximately US$2.6 billion in upfront cash, plus eBay stock.
‘Communications is at the heart of ecommerce and community,’ says Meg Whitman, CEO of eBay. ‘By combining the two leading e-commerce franchises, eBay and PayPal, with the leader in internet voice communications, we will create an extraordinarily powerful environment for business on the web.’
At the last glance, Skype had 54 million members in 225 countries and territories – not bad for a company that only launched in 2002. There’s no denying founders Niklas Zennström and Janus Friis have achieved great things and that looks likely to continue.
Deal Group in share price slide
Online marketing company Deal Group Media has had a challenging year, with CEO Adrian Moss trying to take the business from a small to a medium-sized concern in an increasingly competitive space. The business has capitalised on the growing online advertising market and new clients in the last year include MSN, Halifax and Sony Ericsson.
Turnover and pre-tax profits for the half-year to June 2005 increased to £10.2 million and £154,000 respectively, against £6.6 million and £45,000 for the previous year. However, delays to the roll-out of its new tracking software has led to some extra costs and the change of terms of a major contract has affected profit projections. Its share price has suffered as a result, taking a hit from a high of 25p per share early in the year to its current 4p. Analysts are now predicting pre-tax profits of £800,000 on £22.4 million for the year to December, rising to £2 million on a top line of £33.2 million for 2006.
Clever folk at Abcam
Life sciences company Abcam floated on AIM in November 2005, raising a cool £10 million. The company markets research-grade antibodies to academic and commercial users and has an online catalogue of more than 17,000 products. Cambridge houses its UK base, while its US office is in Cambridge, Massachusetts.
In the year ending 30 June 2005, Abcam reported sales of £12.1 million (2004 sales were £6.72 million) and pre-tax profits of £2.98 million (£1.45 million in 2004). The company expects sales in the current financial year, to 30 June 2006, to be no less than £18.5 million and intends to implement a progressive dividend policy. Abcam employs a total of 78 staff, 27 of whom have PhDs, and the company states its plan is ‘to become the world's largest antibody resource’.
Daisy Foods gets some Air
It’s been a year of consolidation for organic baby food producer Daisy Foods, but that’s not to say it hasn’t been exciting. ‘We realised that the supermarkets are not as fast as us when it comes to decision-making, so we decided to stop being the hare and became a tortoise,’ explains Daisy Foods founder Gerrie Hawes. With that
in mind, the business began to aggressively explore new avenue streams and launched a book in the US, UK and Australia called Feed Me, and a range of mini-meals for babies of 12 months or older.
The business is also securing another round of funding and has taken on a celebrity investor. TV presenter Donna Air was interviewed in the Evening Standard about wanting to start her own baby food business and Hawes took the chance to call her and they met for coffee. She liked the business so much she decided to invest and become the face of the brand. One supermarket is now rolling out the food into all its outlets in 2006, so Daisy Foods production will be rising from 100,000 units to one million.
Intamac goes international
With turnover up 300 per cent, 2005 has been great for Intamac. It builds infrastructure to support internet-linked systems for the digital home, and founder Kevin Meagher says 2005 has been a ‘seminal’ year.
Growth has come internationally, with new contracts in Australia, New Zealand, the US and Holland. In fact, one of the problems Meagher has to grapple with is organising the company according to the different time zones it now works in. But he’s not complaining.
At the present rate, Meagher expects the next six months to see another 300 per cent increase in turnover, not through any great marketing initiative, he says, but by simply being in the right place at the right time with the right technology. Once one company takes it on, another follows, he says. One of his challenges, though, has been the pace at which the large corporates move – slowly. ‘It’s just taken us two years to close a deal with an Australian firm,’ he adds. ‘They have to review everything, pilot the technology, review the pilot, do due diligence and then, would you believe, it goes to tender. We have to tender for an idea we’ve given them! I’m just glad we got the deal.’
