I have heard about a company that may be set to list at some point in the near future – so you can’t buy shares in it yet. However, should this company take the plunge and finally come to market, I believe that that it is a company that you should watch very closely indeed.
The company is called Golley Slater and its chief executive Chris Lovell is debating whether a move to Aim would be the next stage of the group’s development.
Aim certainly has its attractions, but what he needs to figure out is if it’s right for his business, or whether he should go down the route of private-equity groups or trade buyers.
Golley Slater is a 50-year old marketing services company, which Lovell along with two other investors bought for around £10m three years ago.
The group’s clients include Twinings, Greggs and TK Maxx and it expects to make operating profits of £2.5m this year - up from £1.6m in 2005.
Golley Slater has always been a well-run profit making company, so growth has been pretty easy – but it wasn’t perfect. Lovell said that, “It wasn’t neglected, but a lot of things hadn’t been corrected.”
The main problem with the company was that it was firmly stuck in the dark ages. The group had no new business processes - and the chairman and finance director didn’t even have computers…
Lovell has pulled Golley Slater into the 21st Century by spending £1m on new IT Systems and £250,000 on training and development. He has also made five acquisitions, in the three years since he’s been there – two of which were seven-figure deals. This has allowed the group to expand the geographic reach to all of the UK.
Lovell has been able to grow Golley Slater organically by poaching media executives from other agencies and starting up new business teams.
Lovell owns slightly more than half of the company, and states that his expansion plan is similar to the one employed by Sir Martin Sorrell’s - the Chief Executive of WPP, the world’s second largest marketing agency. I believe that this is a good model to follow.
In a further shake-up, Lovell has moved the headquarters of Golley Slater from Cardiff to Central London at a cost of £2.5m. He said, “The majority of advertising buying decisions are made in London and the move will give Golley Slater the chance to play in this market in a significant way”. The group already operates in 11 cities and employs 330 staff.
Lovell argues that the group has a strong balance sheet, strong profit and loss, and a lot of cash in the business” so the proposed float is for all the right reasons. It’s not an act of desperation to raise cash.
I, for one, hope the company come to market; it looks like a pretty interesting opportunity to me.
Bye for now,
Melissa Carroll
for The Penny Sleuth
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