Talking Business with Richard Whiting, NWF Group
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In the first of a new series of ‘Talking Business’ interviews, Richard Whiting, chief executive of AIM-listed NWF Group chats to the editor of TheBusinessDesk.com’s Chris Barry and Grant Thornton partner Ali Sharifi.
COMMENTLogisitics sector has shown resilience in tough times “The logistics sector has held up reasonably well throughout the recession. Margins have thinned but not to the level that might have been expected, suggesting that companies have coped with rising prices and lower volumes. Logistics is commonly associated with manufacturing and commodities like the fuels, food and feed mix that forms the backbone of NWF. That said, all industries need logistics services and some, like banking, health, and retail require very sophisticated systems. This reality puts logistics at the centre of economic activity and makes innovation in the sector a key to improving efficiency and effectiveness for businesses of every shape and size. We have seen increasing competition and the need to counter the buying power of retailers and manufacturers driving a number of mergers and acquisitions. Deals are also driven by the belief in higher efficiencies through economies of scale and having more resources to invest in innovation. The industry has evolved from being a tactical requirement, once just provided by user organisations, into a strategic activity. It links customers and suppliers by managing the flows of goods, services and information from point of origin to point of consumption. Having a flexible business model is seen as a key to success in the sector. There are also opportunities for growth abroad as well as overseas companies expanding into the UK – and the debt market is certainly competitive for the higher quality opportunities.” Ali Sharifi, corporate finance partner, Grant Thornton |
Whiting sows the seeds for growth as NWF delivers record numbers WHILE the business he runs, NWF Group, is known for distributing three Fs – fuels, food and agricultural feed, chief executive Richard Whiting has added a fourth F to the mix, that of focus. Since taking over at NWF Whiting, has cut debt, sold the Cheshire-based group’s loss-making garden centres operation, refinanced and carried off a record acquisition this year. Add to the mix getting a firm handle on the intricacies of the UK dairy farming market – NWF feeds one in seven of Britain’s dairy cows – then it’s been a busy last four years. Articulate and engaging Whiting, 47, is very much in the ‘lead from the front’ mould – his sporting hero is Martin Johnson – the captain of England rugby world cup team and now head coach of the team. Rugby remains one of Whtiting’s passions, although lately it’s more as a spectator. In his youth he was a keen and tenacious amateur player for Bowdon Rugby Club in South Manchester. His leadership style is underpinned by clarity of vision and good communication. It’s fair to say that his hands-on style in the early months in the chief executive’s chair caused something of a stir – staff at the HQ at Wardle in Cheshire and the travelling sales reps – were not used to seeing the boss frequently present in the sales offices, warehouse or visiting farmer customers. Now the sight of the group CEO perched on the edge of the desk, listening to the daily issues in the business, or asking a question, is no longer a major occurrence. Whiting says with a grin: “It did create a bit of a stir in the first year, but I think they are used to me now. “The site visits have been invaluable in helping me understand the businesses and challenge the management team, and I still like to wander round the business twice a week, and maybe sit with the lady on the fuel sales desk for 10 minutes.” In all the three divisions there are the usual operational challenges and opportunities, and then of course those that are not forseen. The winter before last for example, with some customers in farms in the most remote parts of the country unable to receive deliveries, there was a danger that valuable dairy herds would start to starve. “Farmers don’t tend to keep more than two or three day’s stocks so the situation was very worrying. At one stage we were in talks with Defra and the RAF about possibly air-lifting supplies in.” Whiting says the feeds business is the most complex of the three businesses, as it has “the most levers.” The fuels business is the unit investors have most trouble understanding, he says. “Our differentiator is customer service – we go out of our way to be flexible and offer same-day delivery.” One of his first actions as chief executive was to ditch the group’s loss-making garden centres arm, bringing added focus to the business. He explains:”I could see how NWF had arrived at owning a chain of garden centres, but it made no sense for us to continue with them – we’re not retailers – and it would have been very, very difficult for us to take that business forward from a resource point of view.” The sale for £14.5m to Ipswich-based Nottcutts was completed in October 2008 triggers one of several anecdotes from Whiting. “We completed the paperwork in Ipswich pretty late and I got home to Cheshire in the early hours – of course I couldn’t sleep. “The morning when the deal was announced coincided with our annual meeting, and as I arrived at the venue, a hotel in Cheshire, I was button-holed by one shareholder who asked me when we were going to sell the garden centres. “I said, we had just done a deal – he hadn’t seen the announcement – and looked at me with suspicion and asked ‘When?’ “I looked at my watch – it was about 10am – and I replied ‘About six hours ago’. Refinancing the business was another key achievement. With the issue of cost and availability of finance to businesses very much a hot potato, NWF’s experience over the last 12 months makes interesting reading. Whiting explains: “We refinanced nine months ago and went through a thorough review and process with all the major lenders and we had a good result. “We got Base plus 175 points, and I have to say I didn’t think we could do that – but I think we benefited from the process – in the end there were a couple of banks competing and it drove the price down. “We ended up staying with RBS, but would have moved. We talked to all the major players and had people on site from many of the banks three or four times to really help them understand our business.” The refinancing gave NWF headroom to make acquisitions and the company pulled-off its biggest ever deal in March, with the £3.3m swoop on Warwickshire-based Eveson Fuels, a move which took the number of depots from 13 to 17 and added 21 tankers to NWF’s company’s fleet. Whiting has made no secret of the fact that he would like to do more deals, while at the same time retaining an absolute commitment to excellence in customer service, and to being what he calls ‘a lean organisation.’ Looking ahead he states: “I am ambitious and I came to NWF to grow the business, – in the previous three years in my last role we did 15 transactions. “We are not a management team which wants to be running a £50m market cap business and playing golf, standing still does not work for us.” NWF Group FactfileThe NWF Group dates from 1871 when it was formed to supply farmers. Richard Whiting studied Industrial Economics at Nottingham University. He spent the early part of his career in a variety of roles with Caradon, the building supplies group. Prior to NWF he worked for Yorkshire-based door fittings to window frames company Heywood Williams. Richard Whiting’s CV8/1988 – 12/1991 Marketing manager – Caradon Friedland Ltd 1/1992 – 12/1996 Marketing director – Caradon Friedland – (Market More articles in
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