It will soon be two years since former Rational and Electrolux UK chief Andrew Jones swapped life in the supplier fast lane for the distribution sector by taking over established Cambridgeshire outfit Bill Ibbott’s Catering Equipment Services. Fresh from a new office move, we caught up with him to discuss some of the changes that have taken place in the business since he took the helm.
You joined B.I. Services as MD in July 2011 and then purchased the business in October of that year. What’s happened since?
I suppose the last two years prior to me coming on board the company was turning over £430,000 to £500,000. In year one of our takeover we did £1.32m purely from consolidating our own business and adding in a complete one-stop-shop operation. Our installations are all encompassing, so we can design, supply the kit, fit the kit and after-sales service it.
So the business now is quite different to the one you bought?
Yes, it was just pure service with a few bits of sales here and there if they came up. But that has now changed. Obviously such a dramatic rise in turnover is based on the fact that we went out to our customer base and said, ‘right, we can offer you everything now, we don’t just want to do your service work, we want to do everything right from the beginning’. Our customers were very responsive to that. I think they’d just been waiting for somebody to come along, to be honest.
How much of a cultural shift has this required internally?
I would probably say that 35% of the business is service now and the rest is sales, so it has been a tumultuous change for everybody. It has been a big cultural shift and it is the reason for moving into a purpose-built, barn conversion that has been fitted out for us. It is more of a sales and marketing environment now. It’s got a far better look and feel for the guys, we’ve rebranded the vans, and we’ve changed a few other small things.
How much difference will the new office make to the business?
It will make a huge difference. Previously we had a big warehouse with a very small office space, so we were crammed in. Now we have probably got two-thirds office space and a third warehouse space because we predominantly hold spare parts. We were holding a lot of fresh air before. The new office is very modern and gives us the room to scale up.
How many people work for B.I. Catering Equipment Services?
There were eight people when I took over and there are 13 of us now. We’ve mainly brought in additional people on the engineering and product support side, as well as a couple of apprentices.
What’s your outlook for the business as you approach your second year in charge?
We did say we’d achieve what we did last year and, at a push, perhaps do £1.5m, but already it is looking like £1.8m as we’ve just won the whole of East Kent Hospitals for a complete refurbishment package. The mainstay of our business is that within the Cambridge area we are heavily into the universities. We have service contracts with five-sixes of them — I could say two-thirds but it is actually more than that. There are 32 colleges in Cambridge and we have probably got 24 of them, as well as some of the peripheral learning centres. We’ve probably got about 150 contracts within Cambridge itself. The area is absolutely booming.
You’re talking about strong growth this year, but other distributors have fallen by the wayside in recent months. What is your view of the overall market situation?
My view is that you have to cut your cloth accordingly, simple as that. It is a numbers game and if you get it wrong it can really hurt, which is what is happening to some people now. Diversification is important. Our growth in service contracts has come from looking at nursing homes and more individual private schools, for example. We have probably won a dozen contracts just in private schools this year because they need looking after just the same as anybody else. It is about cherry-picking around the area without over-stretching yourself.
What are your key strategic objectives for 2013?
We’re certainly looking to grow our business in the Eastern shires and Eastern counties, as well as working more with the public sector. In healthcare we have obviously got the work with Kent Hospitals, but we are also looking at other NHS sites across the UK, but that is purely to supply and then we would sub-contract locally to an installer and just work with them as the project management. That is where the growth will come from, especially on the sales side, because we are sector specific.
You’ve made the switch to distribution after a long career on the supplier side. Has anything caught you by surprise?
The realisation that, without sounding mean, there are a lot of one-man bands that ethically I have had to deal with. Although I knew about them previously with a manufacturer’s pair of glasses on, suddenly when you are a dealer without the support behind you it is quite difficult. I now understand what the distributors used to mean when they said, ‘look, we are up against it here’, because you are fighting single-figure margins and you can’t operate on that.
Name: B.I. Catering Equipment Services
Address: Unit 4, Bodsey Farm, Bodsey Toll Road, Ramsey, Huntingdon, Cambs, PE26 2XH
Contact: 01487 710720; www.billibbotts.co.uk
Focus: Concept design, equipment supply, installation, servicing
Ownership: As of October 2011, Bill Ibbott’s Catering Equipment Services became a trading name of Andrew Jones Direct Limited