 |
|
 |
|||||
SHS - Big Hitters Stay Private & Stay HereUp until last year, NI-based grocery and drinks group SHS was more than happy to lead the corporate quiet life…..not avoiding publicity, but doing little to encourage the spotlight to come their way. But when you become the only private company most people can remember to buy a PLC, embark on a £60 million spending spree over a 24-month period, and then move into sparkling new £5 million Belfast headquarters…..well, it get harder to keep quiet.
"So here I am," says SHS Managing Director Michael Howard, as he settles into a boardroom chair at the group's new building on Airport Road West. "We've decided we can't keep quiet any longer, and that it's about time we started talking about ourselves."
Howard is clearly going to be the man for the media spotlight, and the former FD at SHS is well able to cope with that role.
He's the day to day boss of a company which was established back in the 70's by - and is still owned by - Joe Sloan and Geoff Salters on a 50:50 basis. Both are apparently determined, and Michael Howard backs the line, that SHS stays private….even though there are bound to be big money approaches as the group continues to grow and prosper.
It's all come a long way from the early days when Sloan had an agency for Colgate Palmolive and Salters a company manufacturing milk-based puddings under the Farmlea brand….still going strong today.
Today's SHS is a £300 million plus turnover operation with some 700 employees - the majority in England and the Republic of Ireland. But it remains firmly headquartered in Northern Ireland, and only moved to its impressive new HQ a few months ago from distinctly unimpressive ones in Newtownabbey.
"We've got about 100 employees here, and we do less than 10% of our business in Northern Ireland," says Howard. "But that's not the point. This is our home, and it's where we intend to stay."
SHS made the financial media headlines late last year when it launched a successful bid for English-based cidermakers Merrydown PLC….bringing the £26 million company back from public to private ownership.
"The acquisition got us into the news because it's almost unheard of for a private company to buy a PLC, but it's arguable that a company of Merrydown's size should have been a PLC at all," he adds. "The deal also meant that we got hold, not just of Merrydown, but also the Schloer drinks brand…..which we think has some great potential."
But the group goes a lot deeper - and wider - than the Merrydown purchase, or the more recent one of Swedish Match in Ireland for that matter.
"Our vision," says Michael Howard "is to continue to grow our presence in the FMCG sector. We'll do that through organic growth, and we'll continue to do it by acquisition. Yes, we will buy more companies that we think fit our profile. "We're financially stable. We're very focused on what we're doing, and we're also very confident about the future prospects of this company."
The basis of an FMCG market leader is already there. As Howard explains, SHS benefits from a broad base. It doesn't just hold a myriad of agencies for different manufacturers, leaving it exposed to decisions made elsewhere. It doesn't just own a portfolio of its own brands. It doesn't just offer corporate services such as warehousing and contract distribution. And it doesn't just manufacture goods from rice puddings to bottled water.
"We do all of those things. That gives us the breadth we think we need, and it helps to lessen the risks of being involved in just one or two of those sectors."
"We took a strategic decisions a couple of years ago to grow into a larger, broad based FMCG company. Up until then I suppose we had been relatively content to develop what we had. The result was that we definitely went for it," Howard smiles. "We completed seven different acquisitions in 2004 and 2005, culminating in Merrydown and Swedish Match."
Understanding the company and its various branches is something of an exercise in concentration.
SHS Sales & Marketing - with bases in Cheltenham and Dublin - is the £230 million plus core of the group. This is the 'agency' side of the business, serving retail multiples, wholesalers, cash & carry, forecourts and the like.
As for products, the firm represents a broad variety of principals - from WKD 'alcopops' to Fox's Glacier Mints, from Harpic toilet cleaners to Douwe Egberts coffee, and from Durex condoms to Farmlea creamed rice.
In Ireland, meanwhile, the brand line-up includes Danone, Colgate Palmolive, Tropicana fruit juices and Tunnock's teacakes.
It comes as no surprise to learn that while ROI-based Swedish Match is the parent of the well-known Maguire & Paterson/Cara match brands, it goes a whole lot deeper. Its brands include a wide range of personal care/pharmaceutical products including Disprin,, Johnsons Baby, Lemsip and Wilkinson Sword.
"It's fair to say that we never really saw boxes of matches as an area of stellar growth in this day and age. We had other reasons for the acquisition," Michael Howard adds. Farmlea, on the manufacturing side of the business, is one of the original components of the 1970's company. It produces (or rather it's European manufacturing partners produce) canned custards, creamed rice and evaporated milk under the Farmlea label, but largely as own label products for Tesco, Asda & Sainsbury's.
In Scotland, Caledonian Bottlers produces a range of waters and flavoured waters under own label and - you've guessed it - for supermarket multiples.
Also in Dublin, Clayton Love Distribution is an agent for a range of frozen food brands, while back in GB, Torquay-based Beverage Brands is a significant £162 million turnover player in the drinks business….which has capitalized on the huge success of one core line, the top-selling WKD vodka-based range.
And so the list goes on. British Pepper & Spice, based in Northampton, does much as its name suggests. It has carved out an £18 million turnover from producing own label herbs and spice ranges for key supermarket multiples, as well as supplying makers of convenience food products with herbs and spices as ingredients. Sister company Gourmet Garden produces chilled herbs, while Gordons Fine Foods is a specialist maker of sauces and condiments.
What Michael Howard packages up as SHS's Corporate Services division is a mix of warehousing and distribution services offered to a wide range of customers, among them competitors like Allegro and major players such as Premier Foods, Kraft and Colgate Palmolive.
Finally - and incongruous as it at first might seem - the Group also owns it own full service market research company based in St. Albans…..and specializing, not surprisingly, in the grocery sector, where it provides services such as supermarket price checking, mystery shopping and competitor analysis.
On the subject of analysis, it doesn't take a detailed analysis of SHS Group's recent turnover figures to see some impressive growth. Back in 2000, before Michael Howard, Joe Sloan and Geoff Salters sat down to decide on some acquisitive growth activity, the group was turning over around £110 million.
In 2004, that figure reached £272 million and according to Michael Howard, the budgeted turnover for 2006 will top the £350 million mark. And he should know!
|
|
||||||
 |
|||||||
