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The eighth Grant Thornton Quoted Company Awards produced some worthy winners. GrowthBusiness talks to those who emerged victorious.
Under the shadow of an 85-foot-long Diplodocus skeleton, the brightest and best of the small-cap world received their acclaim at the 2012 Grant Thornton Quoted Company Awards.
With the trials and tribulations of listed companies having been a distinct feature of 2011, the ceremony – on 25 January – took time to recognise the achievements of the quoted crowd from AIM and PLUS through to those on the FTSE Fledgling list.
The event, organised by sister publication Growth Company Investor and sponsored by professional services firm Grant Thornton, saw more than 700 attendees from the country’s most influential small-cap businesses and their advisers come together inside London’s Natural History Museum.
Darren Throop, CEO of Entertainment One, scooped the Entrepreneur of the Year award after a dynamic 2011 at the helm of the independent entertainment business, which operates in Canada, the USA and the UK. Throop reports ‘a great year by any measure’, with turnover and profits both growing strongly to £470 million and £11.4 million respectively on the back of the success of household names such as Peppa Pig.
‘The digital revolution continues to march forward,’ adds Throop. ‘Almost 14 per cent of our group revenues are now digital: that represents double the amount of digital revenues we saw over the last trading period, so the conversion from a physical to digital format has happened rapidly.’
Key for the company last year was its signing of an exclusive output deal with Amazon subsidiary Lovefilm, for the distribution of the group’s UK film releases.
‘That was an excellent deal for us,’ says Throop. ‘We expect it to increase our digital revenues significantly and we are delighted to be partnering with Europe’s largest digital subscription service. It also highlights the attractiveness of our library, and we remain extremely excited about the potential for similar opportunities in our other key markets.’
Throop says that 2011 saw some ‘unsolicited approaches’ for the business. The board had to determine whether the offers represented sufficient shareholder value, and decided that they didn’t. ‘We’ll just keep doing exactly what we’ve been doing – looking for solid organic growth,’ Throop says. The entrepreneur is by no means about to rest on his laurels, though: ‘We’ll be looking to make acquisitions in order to deliver on our strategy, which is to have a multi-territory distribution infrastructure.’
The Investor of the Year gong went to Giles Hargreave, overseeing the Marlborough UK Micro Cap Growth fund. The numbers speak for themselves, with the fund’s price having grown from 94p when it was launched in 2004 to 264p now – not the easiest period to have been investing in smaller companies.
The fund has got off to a strong start this year, says the mercurial Hargreave: ‘It’s up about 10 per cent year to date, and last year virtually all the funds were down; the benchmarks such as the Small Cap index and AIM index were down a lot. This year, all the benchmarks are very strong and all the funds are doing well.’
Philip Secrett, partner at Grant Thornton and a member of the judging panel, says the Awards play an important role in throwing the spotlight on those companies that are driving job creation and growth.
Nevertheless, he recognises that the particular demands of being a public company can sometimes get in the way of delivering on strategy. His advice on this is simple: ‘Focus on strengths and shut out the noise.’
One company that has pursued its goals single-mindedly is AIM-listed Monitise, which walked off with Deal of the Year after securing a new five-year £50 million contract with Visa. Chairman Duncan McIntyre says the deal is the result of cultivating a relationship that began back in 2007.
McIntyre adds, ‘For us, Visa is an excellent partner. They have 1.9 billion customers worldwide, and for us to be mobilising their infrastructure is a great achievement from a technology perspective.’
For the emerging world, London remains among the pre-eminent financial centres, according to Emerging Markets CEO of the Year Johan Dippenaar, of Petra Diamonds.
Speaking on the characteristics that saw him scoop the award, Dippenaar says, ‘My most important attribute is the expertise I have developed, with more than 20 years’ experience in leadership and management of producing diamond mining companies.
‘I have seen the diamond market through good and bad times, and I can call upon that experience for the benefit of all our stakeholders.’
Despite moving to the Main Market in December, for Petra Diamonds and Dippenaar AIM proved an ideal market for the company to grow rapidly and carry out a series of ‘substantial mine acquisitions’.
‘Petra’s graduation to the Main Market was the next step in our progress, underscoring the success of Petra’s transformation from a junior diamond exploration company to a leading independent diamond producer.’
While Dippenaar picked up the award for emerging markets CEO, Gareth Jones of Gooch & Housego was recognised as the year’s most outstanding chief exec for his leadership of the optical components manufacturer to pre-tax profits of £10.8 million (up 78 per cent), and a sales surge of 37 per cent to £61 million.
Jones joined the AIM-listed business in 1978 and has overseen an impressive period of growth while at the helm. Recent successes for the company have come about through a concerted effort to expand the brand.
‘Certainly in the past couple of years if we were dependent on the UK or Europe then life would have been extremely tough and unpleasant,’ concedes Jones. ‘As it was, we have benefited hugely from a booming business in the Far East, particularly China.’
Growth and graft
The success of small-cap companies like Gooch & Housego needs to be more widely appreciated, according to Gervais Williams, managing director of MAM Funds and a judge of the awards.
For Williams, the event is about finding companies that are not only doing well but are putting in a lot of ‘hard graft and spadework’ to make the transition from good to great performance.
These include plastics manufacturer RPC Group, whose FD, Pim Vervaat, secured a fully underwritten rights issue and £200 million acquisition, bagging the Finance Director of the Year award.
Another high-flyer is David Holme of PSG Solutions, who joined the company’s board in 2006 and contributed to a growth surge that saw PSG notch up a fivefold increase in its share price last year.
Rounding off the award winners was Malcolm Diamond of fastenings business Trifast, who walked away with Chairman of the Year.
While last year’s awards were dominated by success stories in the healthcare sector, this year a wider cross-section of winners, ranging from raw materials through to manufacturing and advanced technology, shows that much of the quoted company arena is in rude health and ready for another year of solid growth.