BQ North East Issue 16 by We Are UMi

www.bq-magazine.co.uk

ISSUE SIXTEEN: WINTER 2012

A FORCE IN THE AIR The aviation company on the stand at Durham Tees Valley with its thrust on runways worldwide

GOING FOR IT Sir Peter Vardy on sweeping floors, stripping gearboxes

and building one of the region’s most successful groups

‘A GOOD EYE IS MY FORTE’ The modern-day Stephenson who reached Number 10 – and made sure his staff shared the experience

LIVE DEBATE Winning finance for growth – is it presentation, black art, or good, old-fashioned business opportunity? ISSUE SIXTEEN: WINTER 2012: NORTH EAST EDITION

THE £3.92bn DRIVE Tourism in the North East is our most lucrative inward investment, but how do we hold on to those in the know and seduce those who aren’t? Meet a man on the case

BUSINESS NEWS: COMMERCE: FASHION: INTERVIEWS: MOTORS: EVENTS

NORTH EAST EDITION

Business Quarter Magazine

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BUSINESS QUARTER: WINTER 12: ISSUE SIXTEEN We hope you’ll feel outraged by some of the reading in this BQ. Business fraud gets kicked under the table, not only by governments but often by companies themselves. Yet the cost to taxpayers and companies runs to billons. It makes Britain’s controversial street unrest and pillage of last August financially insignificant by comparison. What are we going to do about it? Our Live Debate this time has business executives and notable representatives of financial and legal persuasion discussing how companies can better attract private sector finance and investment in today’s economic climate. One participant hoped BQ would report the debate in positive terms. There is always a fine line between frank journalism on one side and PR, spin and false optimism on the other. We’re reminded in the latter instance of the national newspaper that brashly declared pre-September 1939: “There Ain’t Going To Be No War”. BQ tries to tell things like they are, not how perhaps we’d like them to appear. Either way readers, we hope, will find helpful observations and insights from the debate coverage. Private investors too get something to think about. Young people finding it particularly difficult to get a job because of their school performances earlier should take heart from two outstanding North East entrepreneurs – Sir Peter Vardy, and Michael Stephenson whose unique furniture and decor now beautify homes of the rich and famous. Both admit their school work could have been better, and both started work humbly, Sir Peter sweeping floors and Michael at the low end of hotel service. We’d love their stories to reach some young persons who feel despondent at this time. Warwick Brindle, whose career to date is remarkable, and who has contributed so much to the North East’s new five-star hotel being acclaimed as second only in the UK to London’s Dorchester, is now setting his mind on giving the region’s tourism a lift generally, with better marketing than previously tried.

Our successful businesses in this issue are remarkably diverse. Cobham, which develops, delivers and supports leading edge aerospace and defence technology and systems, is the good news from Durham Tees Valley Airport. Richard Rutherford tells how his department store flourishes in a market town, Morpeth, whereas many other market towns have lost theirs. And we also highlight several enterprises that combine environmental awareness with cost-effective transport in a cycle of success. BQ2 records how Sunderland finally won Government investment to build its new and much-needed bridge, and sheds other interesting sidelights as the region’s most populous city advances its small business culture and energises its city centre. There’s good news too of further services to our readers. BQ website – www.bq-magazine.co.uk – now has a new portal that features breaking news and analysis, as well as the magazine’s in-depth content. Business leaders keen to break into Yorkshire or Scotland, or in these markets already, will find it invaluable. Readers can also keep in touch with our regular BQmobile, which charts our most recent key interviews and stories, as well as news and events we feel will be of interest. More details inside. Or visit www.bq-magazine.co.uk Brian Nicholls Editor

CONTACTS ROOM501 LTD Christopher March Managing Director e: chris@room501.co.uk George Cheung Director e: george@room501.co.uk Euan Underwood Director e: euan@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk EDITORIAL Brian Nicholls Editor e: b.g.nicholls@btinternet.com Alastair Gilmour e: alastair.gilmour@hotmail.com Andrew Mernin e: andrewm@room501.co.uk DESIGN & PRODUCTION room501 e: studio@room501.co.uk PHOTOGRAPHY Kevin Gibson e: info@kgphotography.co.uk Chris Auld e: chris@chrisauldphotography.com ADVERTISING If you wish to advertise with us please contact our sales team on 0191 537 5720, or email sales@room501.co.uk

room501 Publishing Ltd, 16 Pickersgill Court, Quay West Business Park, Sunderland SR5 2AQ www.room501.co.uk room501 was formed from a partnership of directors who, combined, have many years of experience in contract publishing, print, marketing, sales and advertising and distribution. We are a passionate, dedicated company that strives to help you to meet your overall business needs and requirements. All contents copyright © 2012 room501 Ltd. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All information is correct at time of going to print, February 2012.

THE LIFE AND SOUL OF BUSINESS

NORTH EAST EDITION BQ Magazine is published quarterly by room501 Ltd.

BUSINESS QUARTER |WINTER 12

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*Offer is available to business users only, figures exclude VAT. Participating dealers only. Not available in conjunction with any other offer. Figures include service, maintenance and repair for the duration of the contract. Hiring example is based on a 36 month BMW Corporate Finance agreement for the model shown. A BMW 116d Sport 5 door hatch, a deposit of ÂŁ957.00 followed by 35 monthly rentals of ÂŁ319.00, mileage charge in excess of contract mileage 13.80 pence per mile. All agreements are based on a contract mileage of 30,000 miles and include metallic paintwork. Vehicle condition charges may apply at the end of your agreement. Offer correct at the time of printing and may change without prior notification. All hiring is subject to status and available to over 18s in the UK (excluding the Channel Islands). Guarantees and indemnities may be required. Hiring facilities provided by BMW Financial Services, Europa House, Bartley way, Hook, Hampshire, RG27 9UF.

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CONTE BUSINESS QUARTER: WINTER 12 a GOOD EYE

Features 24 TOURISM DRIVE The golf resort and hotel operator who insists there’s £3.92bn at stake

32 INSIGHT Where crime really costs – the inside information on corporate fraud

50 BQ LIVE DEBATE The art and presentation – or mystique – of winning ﬁnance for growth

56 A GOOD EYE The designer and the invitation to bring local craftsmanship to No10

The Durham Tees Valley company with contracts on runways worldwide

BUSINESS QUARTER | WINTER 12

GOinG FOR iT

82 GOING FOR IT Sir Peter Vardy talks life’s opportunities

88 BACK TO THE BICYCLE Two wheels are better for business

36 A FORCE IN THE AIR

92 IN ANOTHER LIFE From neurosurgeon to sofware guru

TENTS NORTH EAST EDITION

44 COMMERCIAL PROPERTY

BUSinESS LUnCH

The landmark developments building the region’s economic drive

62 BUSINESS LUNCH The straight-talking Richard Rutherford

Regulars

68 WINE Two Chileans – without hesitation

70 MOTORS The BMW X6 bruiser of a cruiser

74 FASHION

MOTORS

Utility wear is sooo cool these days

08 ON THE RECORD Making the news in Q1/12

78 KIT Top Gun’s green credentials

12 NEWS Who’s doing what, when, where and why, here in the North East

42 AS I SEE IT Beware the search engine rogues

96 FRANK TOCK Gripping gossip from our backroom boy

98 EVENTS Diary dates for this coming quarter

70 BUSINESS QUARTER | WINTER 12

ON THE RECORD

WINTER 12

Where there’s growth there’s hope, Virgin’s 747 flies in, Crutes is absorbed, buyout at Chemoxy, awards for our top companies and individuals, and Nissan breaks its own record >> Growth amid distress All private sector businesses in nine regions of the country ended the year with output growth. Yorkshire and Humberside showed most. The North East also returned to growth although the improvement was the most sluggish of all regions, according to Lloyds TSB. Levels of business distress in the North East continue to rise, in contrast to falling distress across the UK generally, in figures released by business rescue and recovery specialist Begbies Traynor. “Significant” problems in the region grew by 15% in the final quarter of 2011 over the previous year. Business-to-business support services were hardest hit. The national average for the same period saw a fall of 10%. Craig McNaughton, area director for Lloyds TSB Commercial in the North East and Cumbria, says: “An important trend despite the difficulties is the real growth in start-ups. With the right support, such enterprises could help fuel the recovery.” But Ted Salmon, North East regional chairman of the Federation of Small Businesses, says: “We know from our members that small firms are looking to shed staff in the first three months of 2012. “As our region has the highest unemployment, we are calling on the Government to be bolder in helping job creation. Reducing the bureaucracy and red tape that small and micro firms must deal with when taking on new staff would be a good start. Also, we would like to see the Government extend the National Insurance Contribution to all micro businesses that take on additional staff.”

>> Northstar stays put Northstar Ventures is to stay independently-owned and based in the North East. Its parent firm, NF Holdings Ltd, had been exploring options regarding its ownership but has now decided to remain under its current ownership.

BUSINESS QUARTER | WINTER 12

>> Nissan sets the pace Nissan’s Sunderland plant in 2011 signed off its 25th anniversary year turning out more cars than any other UK car factory has ever built in 12 months. It produced 480,485, beating the previous record of 423,262 which it set itself in 2010. Success is down to popularity of the Qashqai both at home and abroad, though the Juke and Note models also contribute to the success. This year on the same site, Nissan will open a plant making batteries for electric cars, and in 2013 it will begin to manufacture the Leaf electric car.

>> Rock replaced competitively Sir Richard Branson’s Virgin Money now occupies the former Northern Rock headquarters at Gosforth, following its absorption of the former North East mortgage bank in a £747m purchase. It begins the bank’s new era with a £14bn mortgage book and retail deposits of £16bn. It immediately unveiled new savings accounts which best-buy website Moneyfacts described as being among the most competitive in the market. Rebranding, already under way, could be completed by next September. First evidence included the appearance of Virgin Money’s name in place of Northern Rock on Newcastle United’s football shirts, sponsorship of which Virgin is to sustain. The two-year deal may have cost £20m. United responded by beating Manchester United 3-0 at the first wearing of the new name. Northern Rock’s acquisition from the taxpayer makes Virgin Money the country’s seventh largest bank. It has secured the profitable “good” part of Northern Rock. Speculation still surrounds the eventual outcome of the “bad” part that was also created following a division created after the bank’s collapse.

Once that part is back in the black the total amount paid for the Rock could run to £1bn, it is suggested. If this does not happen, the taxpayer could stand to lose £400m. Virgin Money’s chief executive Jayne-Ann Gadhia is leading the meld. Ron Sandler, executive chairman since the bank was taken into public ownership in 2008, has now left. Sir Richard, on a visit to his new acquisition, expected more branches would be added to the 75 existing. He pledged no further redundancies for three years. But there will be up to 700 redundancies from the decision by UK Asset Resolution Ltd to withdraw from Newcastle by mid-2013. This is the company set up in 2010 to manage the closed mortgage books of Northern Rock (Asset Management) and the similarly-troubled Bradford and Bingley. UKAR said keeping three centres was not cost-effective. Most Gosforth staff would be offered relocation to Doxford, Sunderland, and to Bingley, West Yorkshire. Virgin Money is still considering the future of the Northern Rock Foundation after 2013. It is one of the top 50 trust and foundation grant-makers across the UK.

>> Forum relocates The Entrepreneurs’ Forum has relocated to 2nd Floor, Anson House, Fleming Business Centre, Burdon Terrace, Jesmond, Newcastle, NE2 3AE. The new phone number is 0191 500 7780 and the fax 0191 448 7781. The website and email addresses remain the same.

>> £1m glass commitment Glass processor Romag, which specialises in photovoltaics and security glass, has installed a new, £1m manufacturing line enabling it to treble production capacity – a demonstration, it says, of the firm’s commitment both to its Consett factory and to the future of photovoltaics.

WINTER 12

COMPANY PROFILE

A force behind Sunderland’s success in attracting and nurturing global companies, local businesses and innovative start ups is the Business Investment team at Sunderland City Council.

DRIVING BUSINESS TO SUNDERLAND

his award-winning team has brought more new jobs and capital investment to sunderland in the last decade than any other city of its size across the uk. over the past ten years, it has attracted 14,500 jobs and £2.5 billion of capital investment to the city. in collaboration with its partners across the region, the team has secured new companies, boosted local businesses and supported start-ups. SECTOR SpECIaLISTS The strengths of business investment team, located at evolve on rainton bridge business Park, are its ﬂexibility, quick responses and understanding of business. The team now includes specialists in low carbon, creative industries, retail and business support, to add to its ongoing commitment to the automotive, manufacturing and financial services sectors. The sector specialist approach reﬂects the importance sunderland city council places on face to face advice and support from officers who understand the priorities and complexities of individual business sectors. LOCaL BUSINESSES local business success is central to the city council’s aim of boosting economic growth. council support for recent projects underpins that priority, including the new sunderland software centre that will offer space for 60 software companies in the city centre when it opens later this year. LEaDING THE WaY Despite some of the toughest trading times across the globe, sunderland’s ability to bring new jobs and businesses to the area remains robustly impressive. in the last three years it has attracted 5,500 new jobs and £900 million of capital

Evolve, e-commerce centre

WE WILL KEEP PUSHING FORWARD – EACH NEW INVESTMENT IS GREAT NEWS FOR THE CITY AND THE REGION.

investment to the city. The business investment team is headed by Janet snaith. she said: “we have refocused our priorities around key industry sectors and the city centre. we believe that despite the current economic climate thwarting easy or quick solutions, the team’s commitment, enthusiasm and energy will help to boost local businesses in the city centre

and across the wider area. “we are operating in an increasingly competitive market, so these moves are key to maintaining the city’s edge over other locations. The outwardfacing roles of the team reﬂect the needs of end users. for the first time our team will also include property specialists, to improve understanding and our ability to respond to developer and investor interest.” The changes are part of a wider strategy to build on the significant successes of business investment and address the targets of the city’s 15 year economic masterplan. Janet added: “we have seen huge successes across the city but what i want is to see more sunderland residents in employment and to continue to engage the wider business community. These are my drivers. “we’re a highly motivated team and we will keep pushing forward – each new investment is great news for the city and the region. The trust we build with local enterprises and the added value the team offers investors is fundamental to sunderland’s future economic health and to its 6000 businesses.”

Contact the business investment team at Evolve, Sunderland City Council, Cygnet Way, Rainton Bridge South Business park, DH4 5QY Telephone Neil Clasper, business support at: 0191 561 1171 Email neil.clasper@sunderland.gov.uk.

BUSINESS QUARTER | WINTER 12

ON THE RECORD

WINTER 12

>> Shake-up for lawyers Bigger investment in North East legal operations is expected with the merger and incorporation of Newcastle firm Crutes into national business law firm DWF. As the Crutes name known since 1907 now disappears, DWF’s offerings will be bolstered across insurance, healthcare, transport, technology and the public sector which Crutes has excelled in. “A significant milestone for DWF,” says Andrew Leaitherland, DWF’s managing partner. “We’re committed to growth and investment in the North East.“ Helen Ager, managing partner of Crutes since 2006, and the first female managing partner of a North East commercial law firm, says: “With our strength in insurance, and our established services to businesses, we believe DWF enables us to add weight to our offering in the North East.” Appointments at Newcastle include intellectual property lawyer Ed Meikle; leading corporate partner John Flynn (formerly of Dickinson Dees) as an executive partner; and banking and finance expert, Deborah Kirtley, as a partner. DWF has offices in eight other locations, including Stockton and Carlisle. It is an £88m firm, compared with Crutes’ £5m.

>> Chemoxy changes hands Ian Stark and Martyn Bainbridge have led a management buyout of Chemoxy International Ltd, the Dow Chemical Company’s custom processing facilities at Middlesbrough and Billingham, Chemoxy is one of Europe’s largest providers of custom manufacturing services to blue chip petrochemical and speciality chemical companies. It also makes environmentally-friendly solvents used in paints and cleaning products. The business exports extensively and employs a team of 80 across the two sites. Stark says: “We are looking forward to continuing to deliver exceptional service to our customers under the new ownership.” Stark and Bainbridge have more than 50 years’ combined experience in operating the custom processing business.

BUSINESS QUARTER | WINTER 12

Winners all: Representing NOF Energy Award winners, left to right, are Steven Rooney of Heerema; Angus Kimpton, IHC Engineering; Neil Kirkbride, NOF Energy chairman; Tom Nightingale, Duco),and Graham Payne from Darchem

>> Duco clinches top award Company of the Year in NOF Energy’s annual awards for oil, gas, nuclear and offshore renewables sectors is subsea umbilical systems specialist Duco Ltd. Part of the multinational Technip, it has more than 30 years’ experience in supplying umbilical systems from Newcastle. It previously won the title in 2006, along with a training award. Pipelay and trenching systems company IHC Engineering Business Ltd of Stocksfield won the innovation and technology prize for creating the Saipem J-Lay Tower. Built for the new build vessel Saipem FDS2, this tower is reputedly the world’s most versatile pipelay system, operating to depths of 3,000 metres. Winners were: • Company of the Year – Duco. • International Business – Darchem Engineering • Innovation and Technology – IHC Engineering Business • New Talent – Steven Rooney, Heerema Hartlepool. City achiever: Claire Bowler has won a Women in the City Woman of Achievement award for her work in insurance. Bowler, born in South Shields, studied at Dame Allan’s School, Newcastle, Durham University and London College of Law. She is a full equity partner of a City law firm. Socially tops: Ross Linnett has been named one of the country’s top young social entrepreneurs in a national awards event. Linnett, who entered business on graduating from Northumbria University, where he was president of the Students’ Union, is managing director of the Gateshead firm Recite, an accessibility specialist, and the Arch web design consultancy. He was praised for his commitment to dyslexic and visually-impaired people in the UK. Best start-up: Renewables company Opus Green got best start-up accolade in North Tyneside’s recent Business of the Year Awards. Under managing director Chris Cassells and fellow directors Gavin Richardson and Ian King, the firm has won a number of local authority frameworks and a £1.9m contract with Your Homes Newcastle to install solar PV on more than 30 housing blocks the company manages.

>> Design premiere Registration is open for the first national event at Northern Design Centre in Gateshead. Opening its doors to its first tenants in February, the new building will welcome 150 people to the second annual Design Means Business conference on March

20 and 21. Organised by Design Network North – a project managed by RTC North – the event will feature speakers from Intercontinental Hotels and Elmwood Design, welcoming back also experts from Aston Martin, Procter & Gamble and Herman Miller. www.designmeansbusiness.org.uk

WINTER 12

COMPANY PROFILE

Andrew Mitchell, chief executive of North East Finance (NEF), which manages the Finance for Business North East Fund, celebrates the programme’s second anniversary and looks at the legacy its seven funds are beginning to build.

BUILDING A LEGACY FOR THE NORTH EAST

T’s now over two years since the north east finance for business funds (Jeremie) were launched at ramside hall in front of an audience of leading business people and entrepreneurs from around the region. at the time, the £125 million programme was the first ‘super-fund’ in england. with businesses finding it difficult to access finance, there was much expectation that the funds would help to fill the equity gap faced by many growing smes and drive business growth. Two years down the line and this expectation is being realised with hundreds of ventures from those looking for seed funding to established companies needing an injection of growth finance reaping the rewards. already over £30m has been invested by our fund managers helping to leverage a further £25m from the private sector. The programme is no longer the only one in the uk, but continues to blaze a trail in demonstrating how public money can unlock private funding and drive growth. without this intervention many of these deals would have been impossible. There have been some fantastic investments across sectors as diverse as computer gaming, engineering, clean technology, e-commerce, manufacturing and the health and medical sectors. games giant eutechnyx, which was the first company to receive an investment, is using the money to create a new generation of free-to-play driving games. other exciting businesses that have received support range from Dene group, an expanding independent film and Tv company, to solvert which is in the process of developing the uk’s first manufacturing facility aimed at producing chemicals from domestic and commercial waste. as chief executive of nef, i am often asked about the destination of the investment returns we will eventually generate as these companies grow. in particular, how we plan to cater for future generations of high growth businesses once the current programme ends in 2014. The question of

Dr Stephen price (left) Northstar proof of Concept fund manager with Kris Wadrop from Solvert legacy is something we are already turning our attentions to as we begin to see some of the early deals mature. The main responsibility for utilising our investment returns – which will be the important legacy we will leave the region – will eventually lie with another regional organisation – north east access to finance (nea2f), headed by hugh morgan williams. at present, nea2f plays no role in the delivery of the current funds (and we have entirely separate boards and management teams), but they will ultimately receive the capital returns and play a key role in reinvesting them, in conjunction with local enterprise Partnerships and other regional stakeholders. as our fund managers begin to exit their stakes in those smes in which they have invested (through trade sales, mbos and ﬂotations), the first priority will be to repay the european investment bank

(eib), which provided over £60m. however, once this has been achieved, nea2f will help to develop new funds as investment returns are released to their regional legacy programme. This is a critical element of our strategy and will ensure continued economic development beyond the end of the existing programme. it is, of course, important there is no confusion between the role of nef, which has full operational responsibility for the Jeremie programme and nea2f- the legacy beneficiary. for this reason, nea2f is precluded from any operational involvement with the funds. as nea2f waits for the legacy funds to ﬂow through, it is already engaged in building the region’s business investment infrastructure. it is helping to create a number of investor readiness programmes, support the development of a more comprehensive business angel network and has also published a finance directory for businesses seeking funding. as well as building today’s businesses, the real legacy of our funds will be the returns we generate. The task of using these legacy funds is vitally important and, looking to the future, we wish nea2f luck with their task as we provide them with the financial firepower to secure future generations of investment funds.

North East Finance, St James’ Gate, Newcastle upon Tyne, NE1 4aD 0191 211 2300 enquiries@northeastﬁnance.org www.northeastﬁnance.org

BUSINESS QUARTER | WINTER 12

NEWS

WINTER 12

Baguettes go ballistic, increased turnover for Stockton engineer, Investment Avenue worth a walk down, Collectables collects more, boat builder takes on 100, and car supermarket doubles its offering

First on: Louise Doyle of Mesma with first customer Malcolm Armstrong from Access Training

not only our workforce but also the wider local economy.” Recently, the group launched a new operation in Brazil, which has already secured rig upgrade contracts with a global drilling contractor. Wilton has also established a rig upgrade and vessel mobilisation business in Dundee and opened an office in Great Yarmouth. Wilton Engineering, part of the Wilton Group, has been recognised as the North East’s fastest growing large business for a second year running in the Ward Hadaway Fastest 50 Awards.

>> Academics Mesma-rised New software – designed by learning and skills professionals for learning and skills professionals – will enable colleges and training providers to spend more time educating and less time on paperwork. Web-based application Mesma – developed by a Gateshead company of that name – takes the Ofsted-driven annual self-assessment for colleges and training providers to a new level of co-ordination and focus. Mesma director Louise Doyle, founder of the award-winning Bright Blue Training and Advisory and formerly a director with Sunderland College, says: “It is designed to work equally well for small work-based providers or entire colleges.” The system is being used by Zodiac Training and Access Training, and is bound also for Key Training and Sunderland College.

>> Great Scott! It’s 250 jobs Bill Scott, recently acclaimed North East Business Executive of the Year, has capped that personal achievement by clinching for his firm, Wilton Engineering Services, a handsome UK North Sea contract with international energy giant ConocoPhillips. The order promises up to 100 new Teesside jobs. And a further 150 sub-contract jobs will take the total to 250 as fabrication gets under

BUSINESS QUARTER | WINTER 12

way on a Long Term Compression (LTC) module for the Britannia field, some 130 miles north-east of Aberdeen. The original main platform was built at Wilton Group’s Port Clarence facility in 1995. The module, when delivered in 2013, will prolong Britannia gasfield’s life and enhance production from existing wells. Scott, chief executive officer of Wilton Group, says: “Having this project at Teesside will boost

Keeping busy: More work is bound for the Port Clarence Offshore base.

>> Surge for Surgo Surgo Construction has a £1.8m contract to expand part of Durham University’s Queen’s Campus in Stockton. In 2010, the Newcastle firm completed work on the sports centre and other projects there. The new building will support research into medicine, health and wellbeing. It’s a second win recently – Surgo having also secured a £2.1m contract to extend and refurbish St Thomas More School in Blaydon.

WINTER 12

COMPANY PROFILE

NEW WORKSHOPS GIVE MORE SMALL BUSINESSES THE CHANCE TO SEEK INVESTMENT... north east companies have secured vital funding and been brought face to face with investors thanks to a series of workshops held in the region. now a further series of workshops organised by north east access to finance, aimed at smes seeking investment, is due to commence in february. north east access to finance (nea2f), which helps businesses access funding, has developed its routes to investment workshops in partnership with newcastle science city with the aim of helping companies get their business proposition ready to pitch to investors - and they are already seeing results. The workshop series is aimed at companies that are looking to attract investment and covers building a business plan, sales and marketing, team building, legal compliance and funding and exit strategies. some of the biggest names in business in this

region, including former sage chairman Paul walker, Tyneside serial entrepreneur Jeremy middleton and fiona cruikshank, director and co-owner of scm Pharma, will be passing on their expertise to delegates at the workshops. The workshops will be held at newcastle city library from 12.45pm-5.00pm on friday february 24 and continuing each friday up to and including march 30th The series will culminate in the opportunity for delegates to practise their business pitches.

“WITH THE HELP OF THE ROUTES TO INVESTMENT WORKSHOPS WE WERE ABLE TO SECURE SIX-FIGURE FUNDING FOR OUR BUSINESS.”

alan holmes, project director for north east access to finance, said: “shaping up a new or existing business for investment can require skills and knowledge that a lot of entrepreneurs might be unfamiliar with. “The routes to investment workshops provide a wonderful opportunity for them to pick the brains of people who have a thorough understanding of what is required.” For further information visit www.routestoinvestment.co.uk or to sign up for the workshops call Michelle Blow at HFpR Ltd on 0191 285 7100 or e-mail her at michelle@hilaryﬂorekpr.co.uk

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BUSINESS QUARTER | WINTER 12

NEWS

WINTER 12

>> Going for the double A cable supply company, showing £7m sales in its maiden year, expects to double turnover in 2012. Expert Cables of Hartlepool supplies electrical wholesalers. Managing director Andrew McKenna has a staff of seven.

Mike Odysseas: Critical of providers of superfast broadband

>> Providers blamed Providers are to blame for the UK’s low take-up of superfast broadband, a Teesside specialist in the business believes. A recent Ofcom report has shown only 4% of UK homes are taking advantage of superfast broadband, defined as giving speeds above 24 megabits a second (MBPS). Mike Odysseas, managing director and founder of Odyssey Systems, says: “Take-up of superfast broadband would be much higher if providers offered the right packages at reasonable prices. “Most packages have limits on monthly bandwidth usage. Those which do not are usually very expensive. “So, if the majority of people signed up to superfast broadband, they would be likely to use up their quota of bandwidth very early in the month and be left with incredibly slow service. “Providers, particularly BT, traffic-manage their broadband customers, increasing and reducing speeds depending upon the time of the day, so that more customers can get online at the busiest periods – but at slower speeds.”

>> Bank makes inroads Handelsbanken has opened its eighth branch in the North East since 2002 – at Hexham. The Swedish bank now has 117 branches around the UK.

>> All aboard Ship painting specialist Pyeroy has a share of work on refitting the Royal Navy submarine HMS Torbay at Devenport.

BUSINESS QUARTER | WINTER 12

>> Husband Gary joins too Virtuoso Digital Marketing of Durham is providing fully-integrated social media and digital marketing support for touch-screen maker Zytronic, motor group RMB Automotive and the North East Ambulance Service. Started by Maureen Storey in 2000, the firm – through a recent surge of new business – has grown to a team of six, including Storey’s husband Gary who has joined the company as a director.

>> Teesside takeover Engineering Test Services (ETS) of Hartlepool has been sold to the US giant Mistras by Middlesbrough firm SGW Construction Group. Fifty more jobs could follow. Over four years, contracts with North East firms, including Cleveland Bridge, OGN and Wilton Engineering, have enabled it to take the workforce from six to 80. OGN is investing £50m and creating 600 jobs at a wind turbine plant in Wallsend. ETS was founded in the 1970s. David Dakers is managing director.

>> Wear to Tyne Pothole repair specialist Velocity has relocated from Wearside to Tyneside after selling half of the company in a seven-figure deal to Pearson Engineering, the Newcastle provider of anti-mine equipment for the US Army. Velocity was set up in 1997.

Ian Grifﬁths: Motorists aide

>> Take your motoring pick Ex-banker Ian Griffiths is driving in the fast lane with his successful motoring website. Griffiths, of Morpeth, set up whocanfixmycar.com last spring to help car owners find local garages and mechanics, then compare their quotes online. The site now lists 2,640 mechanics, with almost 3,000 current jobs posted by drivers. Car owners needing a service, MOT, parts or a repair, post their job free on the website and wait for the quotes to compare. They can also read other users’ feedback before making a choice. Griffiths, who attended Coquet High School in Northumberland and studied further at Durham University, went into investment banking in London. After eight years working in fixed income securities markets, he followed his passion for cars, returning to the North East to set up his own venture.

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NEWS

WINTER 12

The protector: Matt Garnett, of BreezeBlockers which protects cyclists from the cold

>> Warm cycle Matt Garnett, who runs Newcastle business BreezeBlockers, engaged Teesside University through a consultancy to test a product made to protect cyclists’ hands from the cold. Now the firm is offering aerodynamic bike shields to protect both feet and hands in bad weather.

>> Fight to save fish jobs Easington MP Grahame Morris is fighting to save the 363 jobs that are threatened by the proposed closure of Cumbrian Seafoods’ plant – Seaham’s biggest employer just a year ago. The firm is in administration and its customer contracts and equipment have been bought by Lion Capital, owner of rival Young’s Seafood. Lion has been in consultation with staff at Cumbrian’s three sites – Seaham, Whitehaven and Amble – over plans to close all three and have the business merged with Young’s existing operations. Around 565 jobs would be lost. Last year, Cumbrian provided 500 jobs in Seaham alone and was considering a hire of 200 more workers. Young’s has said Cumbrian’s business model was not financially viable and restructuring is needed. The Seaham factory, set up on Foxcover Industrial Estate with all but £1m in a £10m expansion, had been devised to minimise the carbon footprint. Two wind turbines on site gave energy neutrality. Founder and managing director Peter Vassallo has been in the seafood industry all his

BUSINESS QUARTER | WINTER 12

Last summer the Tyneside-based firm left Newcastle’s prime shopping destination, Northumberland Street, after 12 years. It opened an out-of-town Collectables store and coffee shop on St James’s Retail Park, Stamfordham Road, Newcastle. Its place on Northumberland Street was taken by the Scandinavian hardware chain Clas Ohlson. Collectables also operates in giftware, fashion and cookware. Philip and son David launched it at the Metrocentre, Gateshead, in 1986. Besides Newcastle, Stockton and Gateshead (where it now has three units in the Metrocentre) it has stores in Sunderland, Harrogate, Alnwick and Carlisle. An outlet was launched at Dalton Park near Seaham in 2009, and two more outlets opened at Royal Quays, North Tyneside, and Junction 32 near Leeds last year. The company’s £12m turnover in 2010 was slightly up on the previous year. It is headquartered at Blaydon.

working life. A former entrepreneur of the year nationally, he first made his name creating Vassallo Seafoods which employed 300 people at Gosforth before being sold to the Albert Fisher group in 1991.

>> Family stores group expands Family owned Collectables is expanding its furniture retailing with the launch of what it believes is the largest bed store in the North East. Its new Sleeping Giant outlet occupies 20,000sq ft on Portrack Lane, Stockton. More than 250 staff now work at the 11 Collectables stores and four furniture stores, including Sleeping Giant. The group says it remains robust despite the economic downturn. The four furniture stores are all on Portrack Lane. Mandale Furniture was acquired in 2009, The Big Cane Store and Bed Express both acquired earlier this year. They are being relaunched. Collectables chairman Philip Lewis sees clear demand at the middle and top end of the bed market. The range carried includes the firm’s own Sleeping Giant brand.

Mounting up: Philip, left, and David Lewis have opened another store for their Collectables group

>> Website revamp pays The four-star St Ermin’s Hotel in Westminster, London, reports online revenue doubled in a month following a revamp of its website and online marketing strategy by Shout Digital of Newcastle. The upgrade concludes a £30m refurbishment of the Grade II-listed Victorian hotel.

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>> New team member Sunderland AFC has appointed Gary Hutchinson to the club’s board of directors as commercial director. He has headed up Sunderland’s venue, events and sales divisions, leading the team that established the Stadium of Light as one of the country’s major live music venues. He was also responsible for setting up 1879 Events Ltd, the club’s external event management company. Gary is also chairman of the North East Chamber of Commerce’s Sunderland committee. His new role will see the 31-year-old continue to oversee the club’s sales and events divisions, as well as spearheading business partnerships and strategies with key regional stakeholders. SAFC chief executive, Margaret Byrne, said: “Gary is a hugely committed member of our team and his enthusiasm and drive are tremendous assets for our football club.”

Azeem Arshad

>> Sandwich star Entrepreneurial Azeem Arshad has launched his sixth sandwich franchise in the North East. Arshad, 25, of Newcastle, holds the master franchise licence for Baguette Express in the region, and recently opened at Eldon Square bus station, creating 10 jobs. The other outlets are at Newcastle’s St Mary’s Place and Shields Road, plus a branch in the Metrocentre at Gateshead, and a large café on Clayton Street, which is the UK flagship Baguette Express. A Sunderland outlet is being refurbished. Arshad, originally from Hamilton, trained as a lawyer and also holds a masters in real estate. He was named Franchisee of the Year at the Scottish Asian Business Awards for his success with two Glasgow branches of Baguette Express. He hopes to open 30 outlets by 2015. Baguette Express, based in East Lothian, began as a single shop in 1999 then was transformed into a franchise model by entrepreneurs Robin and Billy Stenhouse. It now has about 75 outlets around the UK.

>> Engineering pays

Appointed to the board: Gary Hutchinson

>> Healthy growth The South Shields health care firm Hunters Moor Neurorehabilitation has opened a clinic in Portsmouth. It treats patients with physical and behavioural difficulties caused by brain injury. The firm, launched in 2008, has already opened two clinics in Birmingham. It aims to have 20 across the country by 2015.

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Francis Brown Ltd, the Stockton precision engineers, has had a 30% increase in turnover for 2011, and has created 22 new jobs on the strength of the new £6m figure. With further growth likely, it is recruiting 14 more workers to bring the total to 89. Its fabrication services are particularly in demand in the oil and gas, subsea, chemical and renewables industries. It has recently completed work on launch and recovery systems to serve off the Brazilian coast for SMD, the Tyneside manufacturer of remotely operated vehicles. It has also secured upgrade and maintenance projects at North East chemical plants and North Sea oil rigs – supplying pressure vessels, flare tips, pipework and steel access platforms. Under managing director Jamie Brown, the

firm has stepped up productivity and raised capacity by adopting lean manufacturing and altering shifts.

>> Driving forward The serial motor dealership grower Vertu made its first purchase of 2012 a £2m deal for a Vauxhall specialist in Northampton. Bought from Grose Northampton Ltd, the firm has a turnover of some £20m. This gives the AIM-listed Gateshead company 83 outlets.

>> Creeping success Earlier hit by recession, the US multinational Caterpillar Corporation is now putting part of a £50m UK investment into the Stockton side of its manufacture of industrial off-road vehicles. It is raising capacity, and 90% of the Stockton output is already exported.

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COMPANY PROFILE

Over the last 40 years Weir Insurance Brokers has grown into one of the largest and most trusted independent players in the region’s insurance sector. This year, following a major appointment at the firm, it looks set to continue its rise to power as it targets new opportunities in Northumberland.

READY FOR GROWTH

amily-run insurance firm weir insurance has enlisted one of the most respected finance professionals in northumberland to help the firm spread its reach across the county. The blyth-based company has appointed a new commercial account executive in Dennis hetherington – dubbed ‘mr insurance’ among business leaders in his home town of alnwick because of his vast wealth of knowledge in the sector. mr hetherington has over 30 years of experience in the insurance industry which culminated in him running his own successful business that he recently sold to a national firm. he is now charged with growing weir’s presence between blyth and berwick, as the company looks to roll out its ambitious expansion plans. weir insurance brokers, whose turnover has increased to almost £6m in recent years, has invested heavily in new iT infrastructure and staff development. whilst it believes that the recession is by no means over, it feels like it has seen the worst and is gearing for a period of rapid expansion which may include the opening of a new office in alnwick. mr hetherington said: “we are looking to expand into new areas of commercial accounts particularly in alnwick (& district) where i’m particularly well known. “The outlook for the company is still very strong despite the conditions because we can still offer the personal service that comes with being a family run firm and there’s lots of local expertise within the business.” managing director karen weir added “we are a

Dennis has 30 years of experience in the industry

WEIR HAVE APPOINTED A NEW COMMERCIALS ACCOUNT EXECUTIVE IN DENNIS HETHERINGTON – DUBBED ‘MR INSURANCE’ IN HIS HOME TOWN OF ALNWICK second generation company, and three years ago the average age of our staff was 47. we have tried very hard to attract new talent to our industry, starting an apprenticeship scheme amongst other initiatives, and now our average age is 33, which makes us really future proof. all of our staff have embarked on professional qualifications,

something entirely elective in our industry, but which we feel is imperative if we are to maintain professionalism. “our clients are showing real signs of growth again, expanding and taking on new staff, and on the back of that we now want to spread our geographical boundaries north up through northumberland. as service is paramount in our organisation, we felt we needed someone with a strong local reputation and it’s fantastic to have someone of Dennis’ calibre on board.” weir insurance brokers has been servicing the insurance needs of north east businesses for over 40 years and has grown into one of the largest independent insurance brokers in the region in recent years. according to mrs weir, much of the company’s success can be attributed to its policy of only working with the best insurers on the market and in its commitment to retaining traditional values when it comes to customer service. “we’re not a call centre which simply asks the same standard questions to each caller. we also won’t just sell customers any policy from any company as we carefully vet our insurers and their products to ensure we maintain a first rate level of service, we’ve witnessed too many ‘too good to be true deals (which usually are) over the 40 years.” mrs weir said. Weir Insurance Brokers offers a wide range of services to businesses of all sizes, from sole traders to multinationals, as well as charities and not-for-proﬁt organisations. For more information on the ﬁrm’s services visit: www.weirinsurance .co.uk or call 0800 281 453.

Local knowledge, national expertise

0800 281 453 BUSINESS QUARTER | WINTER 12

NEWS

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>> Training safeguard Access Training’s £2m contract recently won will safeguard 50 jobs. The Gateshead firm has secured a contract with the Skills Funding Agency (SFA), partnering two other trainers, Durham Training and MPH Customer Centred Training. It has doubled its funding from the SFA, which allocates £4bn of public funding a year for training adults in England.

Bigger drive: A fleet is enlarged to make the Metrocentre greener.

>> Modular help

>> Metrocentre clean-up O’Brien Waste Recycling Solutions has a £2m deal to help Europe’s biggest shopping centre reduce its environmental impact. The North East firm will recycle 96% of Metrocentre’s waste at Gateshead, aiming to make it the UK’s greenest shopping centre. The firm employs 324 people and has increased its fleet by two vehicles to tackle the job.

>> Wave of success Boatbuilder Alnmaritec, recently relocated from Alnwick after more than 30 years to an existing second operation at Blyth, has taken on more than 100 workers there. Its turnover, £3m in 2008, was £15m last year and could reach £17m this year, thanks to growing demand for craft in the oil and renewables industries.

Engineers Mech-Tool of Darlington have called on Teesside University’s industry support unit Teesside Manufacturing Centre to help streamline its business processes. The firm makes modules for the offshore and renewables markets, and works on safety protection also.

>> Spreading west Web developer Ayo Media is adding a Manchester operation to its Gateshead activities. The decision was taken following account wins with iMoney Group, HS Sports and The National BMX Centre. Managing director Rob Mathieson says the North East will remain home to the firm.

>> Revving up The North East’s biggest used car supermarket, Tyneside Autoparc, is doubling its number of vehicles on offer.

>> QUOTE OF THE QUARTER

This is an issue that has not gone away, and I know the city and region is grateful for this opportunity to start work on this landmark project. The bold design of the new bridge is architecturally significant; it will become a confident and symbolic landmark for Sunderland and the North East Councillor Paul Watson, leader of Sunderland City Council, following the Government’s pledge of financial backing for the city’s new iconic bridge (See also BQ2).

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Managing director Chris Denning, who joined the Sandy Lane, North Gosforth, firm last March after 18 years at Benfield Motors, says a £3m injection is enabling the existing stock to be raised from 500 to 1,000 used cars, taking up all of 10 acres. The workforce there has more than doubled to 65 in less than a year, and the website is getting 1.5 million visits a month.

Chris Denning: Stepped up the offer

>> New business pays Orders from new customers are enabling design and engineering specialist Tharsus to add 80 more to its workforce in South East Northumberland. It has two sites at Blyth and one at Hebburn, and has been awarded £690,000 from the Government’s Regional Growth Fund to help fund expansion. Since 2008, managing director Brian Palmer has built Tharsus into a £10m a year business on the back of a Tharsus Welding and Sheet Metal Company started in 1964, the product of a pools win by two Reyrolle employees.

>> Third tunnel win The busy A505 Weston Hills Tunnel at Baldock, Hertfordshire, will be inspected and maintained over the next five years by Henry Williams Ltd of Darlington. The firm secured its third tunnel contract with a £1m bid. It already takes care of the Saltash Tunnel, on the Devon-Cornwall border, and the Medway Tunnel in Kent.

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NEWS

WINTER 12

>> Investment avenues £10m boost for businesses A new £10m wave of investment funding to spur growth of businesses and jobs in the North East has been announced. The incentive is European-sourced from the ERDF’s Investment for Growth programme. It is being delivered by the Business & Enterprise Group (BE Group). Subsidies of around 30% to 40% will be provided for eligible companies to advance projects that create or safeguard jobs. Alastair MacColl, chief executive of BE Group, says: “We shall see concrete results of the programme both in economic and human terms.” The programme, offering help to both new and established businesses, including eligible social enterprises, runs until 2014. The project will have £4.99m of investment from the ERDF, managed by the Department for Communities and Local Government. Contact: tel 0191 426 6408, email enquiries@business-enterprise.net. Learning curve: Workshops helping fund-hunters to get face to face meetings with investors started again in February. Beneficiaries of the first session run by North East Access to Finance include Roland Glancy, chief executive of North East firm Radfan, who says he then secured six figure funding to develop an

Ready to help: Administrators of the £10m fund to benefit North East businesses are, left to right, Cheryl Blakey, John Heslop, Kate Ward, Chris Watson, Dianne Barkas, Paul Brown, Ian Coull, Andrew Frost and Colin Bunn

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advanced fan unit for domestic radiators. North East Access to Finance (NEA2F) has developed its Routes to Investment workshops in partnership with Newcastle Science City to help companies ready themselves for pitching to investors. The workshop series covers business plans, sales and marketing, team building, legal compliance, funding and exit strategies. Tutors include former Sage chairman Paul Walker, North East serial entrepreneur Jeremy Middleton and Fiona Cruickshank, director and co-owner of SCM Pharma. The events will be held at Newcastle City Library on February 24, continuing each Friday up to and including March 30. Alan Holmes, NEA2F’s project director, says: “Shaping up a new or existing business for investment can require skills and knowledge many entrepreneurs may be unfamiliar with. These workshops give an opportunity for them to pick brains.” BQ Live Debate: Pages 50 to 55 Hydraulics gain: With a new management team in place, a Tyneside manufacturer of hydraulic systems can now expand with a six figure investment. FW Capital, which manages the North East Growth Plus Fund, invested in Quick Hydraulics which from 1977 was a product distributor. The firm has expanded over three decades to become a regional leader. Andrew Esson, the new managing director, says: “We’re delighted to have taken the helm of an established business with such a progressive reputation. The company is excellently placed with many longstanding customers and a great product range.” Entry into new markets and territories is planned, also new product and service development. The North East Growth Plus Fund provides single-round investments of between £350,000 and £1.25m to established businesses in the region. Fund contact: tel 07717 802 978 or 0191 350 6316. Gabriel’s call: Six leading businesswomen have launched Gabriel, an Angel investment fund in the North East. The six include Fiona Cruickshank, a board member of the North East

Local Enterprise Partnership. She founded Northumberland drugs firm Specials Laboratory and SCM Pharma. Another member is Caroline Theobald, Swedish consul and founder of Newcastle networking group The Bridge Club. Equity and loans will be available to successful applicants of either sex. Capital will be available within a range of £5,000 and £100,000. Biomass backed: The company behind a biomass plant at Teesport has secured finance for the £600m scheme, creating 150 jobs. MGT Power has around £300m backing from banks and £300m from equity investors. The Tees Renewable Energy Plant (TREP) will give work for 900 during three years of construction, 150 long-term jobs on site and another 300-plus in supply chain roles. Totting up: Law firm Ward Hadaway has now advised on more than 60 investments from the Finance for Business North East Fund. Help to expand: Gateshead-based Fendor has a new £400,000 investment from the Finance For Business North East Growth Fund run by NEL Fund Managers. The firm, whose specialist glazing includes a blast resistant variety in aluminium and steel, received a similar investment from the same source in 2006. Growing places: Businesses in the region can bid for some of the £5.6m Government Growing Places Fund. Tees Valley Unlimited is looking for applicants working on projects that will generate jobs or housing locally. Proposals should be sent to the Local Enterprise Partnership’s website. SMEs gain: More than 140 small businesses across Tees Valley are benefiting from a regeneration fund started by UK Steel Enterprise. The fund, set up with the mothballing of Teesside Cast Products in 2010, gives businesses less than 18 months old access to loans of £1,000 to £3,500. Rocking in growth: Harlands Accountants, led by managing director Glyn Davison, has helped several clients gain Regional Growth Fund support, including a £750,000 expansion investment for BLS Electronics of Stanley, maker of transformers for amplifiers used by rock bands The Foo Fighters, Kings of Leon and Blur.

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ENTREPRENEUR

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BUSINESS QUARTER | WINTER 12

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ENTREPRENEUR

TIME TO DRIVE TOURISM

There’s long been lack of focus on North East tourism, Warwick Brindle believes. The moving power behind a showpiece hotel of the region, he believes a lot more than the present £3.92bn grossed can be raised. Brian Nicholls reports Warwick Brindle, a frontliner in North East tourism and leisure, is convinced the region’s sector can pull in much more than the £3.92bn yearly at present. But he believes lots must be done, and more intrinsically than before, to achieve this. Don’t let his rich, engaging Lancashire accent mislead. He knows the North East inside out. And his decades of driving companies of his own and major organisations of others is enriched by unique experience of American business. Today, as chairman and co-founder of Rockliffe Hall Ltd, he heads the organisation behind one of the North East’s supreme tourist assets, the five-star hotel, golf club and spa resort of that ilk. The 61-bedroom venue in rural Darlington opened late in 2009, just as the recession was throwing up business failures. Even in good times, such a hotel might need four years to establish. In fact, Brindle says, perhaps even with a trace of understatement: “We’ve bucked the trend a bit and on track to where we want to be. We’re looking for a 70-75% occupancy rate and are already getting that.” There’s bedrock patronage of 700 spa members and 250 golf members, largely from within 25 miles, and a reassuring number of guests from a core Leeds-Newcastle area.

Accolades mount for the spa, the golf, the food and the hospitality. Gold award winner in regional tourism awards, Rockcliffe Hall’s qualities are recognised nationally, too. It’s feted as one of the nation’s 10 best country hotels by The Sunday Times, appears in the Top 100 of another list - and on a website is acclaimed as second only in the UK to London’s Dorchester. Fast rail links between London and Darlington speed its growth. But Brindle perceives North East tourism as a whole as being on the slow line. “That’s not meant to be critical,” he stresses. It’s partly because it got wrapped up in the region’s inward investment programme and sectoral priorities, not only during the time of One North East but also in the time of the preceding North East Development Company. “Over the years, our region has been so sector driven by the big guys, naturally,” he says. “So if it’s Teesside it’s chemicals, engineering. They still bang on about docks and ships, but how big are some of the players there compared to IT and leisure and tourism? It doesn’t happen necessarily in other regions – Cornwall’s not still driven by the tin mines, but here some people even say still Teesside is driven by ICI. It’s 20 years since they were >>

BUSINESS QUARTER |WINTER 12

ENTREPRENEUR

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Practitioner in the proactive: Warwick Brindle is fiercely proactive about the North East’s natural assets and indigenous people skills here. What exists now is a fragmentation of what they did. “Most conferences we get concern IT and other service industries. I can’t remember when we had an engineering conference. So the region is also being driven by many people running small businesses very well. Most members here run their own business with good turnover, bringing income to the area but are totally ignored. They make furniture, do landscaping, IT – that sort of thing – and considering them too would better indicate what the area is really like. “There’s a target of bringing manufacturing business here, and of persuading companies to grow here and not move out. But when you wrap it into a ‘Passionate about the North East’ type of programme, that says nothing to the big tourist industry outside. It says it’s a great place to locate to. “I don’t think we’ve ever had a North East campaign in all the years I’ve been involved here that says or delivers what we can provide as a tourist area. I think most people in our industry believe that. It’s difficult to get across, admittedly. “What are you promoting – beaches in Northumberland or a facility like this? There’s

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120 miles difference. And do you include the Dales?” He suspects that with the passing of One North East regional development agency, North East tourism will fall back into “pockets”. Teesside towns, for example, may have to do their own thing again – “something really difficult nationally for them”. So his organisation is already proactive. “We’ve begun working hard with other hoteliers and leisure people to put people who run the industry in the driving seat, rather than people who have other roles. “Hoteliers and leisure people are getting together across the North East to agree how to go forward. You can promote the location, but if you’re not promoting the business too how do people know what we’ve got, apart from the location? It’s a bit ‘so what?’” For starters, Rockliffe aims to see the North East rival Scotland and Ireland for golf breaks and holidays. It’s joining with other golf venues in the region to prepare a “proper” package for golf this year. He’s convinced the specific approach will pay. “People sometimes get too proprietorial. Our view’s that if people come to us on behalf of a party of 30 perhaps, no matter where from,

we can deliver a full golf experience. We’re going to be the catalyst. “If people come from other parts of the country or abroad to play golf and stay here, we’re not going to say they should just golf at Rockliffe, but we might suggest they try the links experience at Seaton Delaval, for example, or Close House and the courses further north. Everyone involved is up for it. It’s just one example of what can be done.” Brindle is not the type to pull up at the first obstacle. Planning Rockliffe’s course had presented an initial challenge as he sat to develop the entire enterprise from 400 acres and 11 buildings, including the centrepiece 19th Century Grade II, architecturally listed family residence – empty for about 15 years. He explains: “The course is built on a 100-year-old flood plain, something we’ve never really told people. So the engineering had to be spot on. We’re pretty sure we’ll have a major flood once a year. Most golf clubs would have nightmares about something like that.” It’s unavoidable because the Tees horseshoes there. The solution? Ensure the course is back open within 24 hours. “We’ve now had three major course floods

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since we opened. Each time we’ve had the course back open within 24 hours. I’ve a set of engineering drawings taking me through a 10, 33, 50 and 100-year flood pattern. When flooding happens, we pull the drawings out and know exactly where the flooding will reach to.“ “We had a golf party here when more rain had fallen in two hours than at any time during 20 years before,” Brindle enthuses. “One of our members told them to have another drink and play again in a couple of hours.” The visitors didn’t believe it, but sure enough, the water receded. Brindle says: “The course is designed so that the fall of the flood plain is on the level of the water on the river. When a surge comes downriver, like a miniature tsunami, everywhere here takes it – then it recedes straight away.”

ENTREPRENEUR

There was something fundamental that nobody got told about, I think. We were chopped off at the knees Rockliffe’s contribution to the local economy to date includes creating 260 jobs – mainly to local people, some of whom had earlier left the North East. And along with Middlesbrough Football Club which trains there, it gives business to 2,000 other firms. What Brindle wouldn’t like to see in future

building of the regional economy are U-turns like those evident when Gordon Brown’s government reneged on proposals to allow more casinos in Britain. The economy of Middlesbrough stood to gain £10m – a figure undisclosed at the time – and Brindle speaks with authority. Las Vegas Sands, noted for its casinos but in fact an integrated resorts company, had joined the Nasdaq and liked the British proposal. It had been reckoned after the Taylor Report on safety at sports stadiums that 29 football clubs would build new homes on brownfield sites, where accompanying space could also accommodate new casinos. A site beside Middlesbrough’s Riverside Stadium at Middlehaven was advocated. Brindle knew nothing about casinos initially but, having worked in the US, he was asked to investigate. From that came the first big presentation on the regional casino plan. >> Working in partnership:

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International Women's North East Day Conference North East Entrepreneurs’ Forum Day, International Women’s Conference DATE: VENUE: TIME: COST:

Thursday 8th March 2012 Hilton Hotel, Gateshead 9.00am – 4.30pm Women'sinto Day, East Conference £75 + VAT for members of the Entrepreneurs’International Forum and Women theNorth Network, £95 + VAT for non members. Book now to be inspired, make connections and share knowledge.

An unmissable event for women in business. The North East Entrepreneurs’ Forum and Women Into the Network are once again joining forces to deliver a day of inspiration, sharing and learning for all levels of women in business.

of Inkspot Science Ltd and Newcastle University / Fiona Raglan of Public Knowledge / Sara Davies of Crafter’s Companion. The conference is hosted by Penny Mallory, the first woman to drive a World Rally Car.

tional Women's Day, North East Conference Special guest speakers include Sarah Murray of the award winning confused.com / Judy Naaké of St. Tropez / Kirsty Henshaw of Worthenshaws / Fiona Cruickshank of SCM Pharma / Heather Jackson of ‘The Two Percent Club’ / Dr. Joanna Berry

To book your place visit www.entrepreneursforum.net or email us at info@entrepreneursforum.net or call 0191 500 7780.

Thanks to our corporate partners:

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Working in

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A ‘natural’ progression Warwick Brindle, 62, describes his career changes as a “very strange journey” but says they’ve always had a link. With his arts degree from college at Wolverhampton in 1972, he launched a design and ceramics company. Then he switched to sales and marketing in newspapers, initially with the Burnley Star, and within a few years with Thomson Newspapers had become deputy managing director of Newcastle Chronicle and Journal. Between 1990 and 1995 he was managing director of its Chester operation, managing director at Teesside, then on to be managing director of The Scotsman Publications in Edinburgh (sold to the Barclay Brothers in 1994). For three years from 1997 he was board consultant to, and senior vice-president for, Thomson in the US and Canada, with the hefty responsibility of selling off 55 divisions – nearly 2,000 titles. He was also for some time chief executive for Thomson of two online businesses in classified advertising and syndication. In 2004, approached by Steve Gibson the millionaire industrialist and chairman of Middlesbrough Football Club, he took up his present role. Since 1996 also he has been managing director of RedBox Media, a business consultancy he founded, and has invested in ascendant North East businesses such as Amazing Group and Ethical Superstore. He helped his daughter Antonia set up Quay 2 Media. He says taking an arts degree from design to media was natural. “There’s an art to media as well,” he says. Then when Gibson, who had known him since his newspaper days on Teesside, asked if he’d study proposals for a hotel, an initial £50m investment making full use of an estate where the football club had trained for nine years, he readily agreed. “The link here was creativity again. People look at developments like this and say: ‘Well, it’s buildings. I saw it as working with architects, interior designers and creative people in sales. I spent 25 years travelling all over, and in hotels a lot. I probably know as much about them as people who work in them but I needed to find out exactly how they run them. It’s one of the best journeys I’ve made. I loved the media business, I really did. But this has been fantastic.” Brindle and his wife Maureen – to whom he has been married for 41 years – live at Whitley Bay. They have two daughters, Antonia and Fay, and two grandchildren, seven and one.

He says: “It was all going ahead until the government decided it was folly. They were never going to do it. They killed it – one of the worst examples I’ve ever seen of not understanding an area’s economy. The Sands guys have one of the world’s biggest businesses. They weren’t just into casinos but many other businesses like six massive hotels in Macau alone. People treated them here like they were little betting shop guys. It was unbelievable to hear what was going on. They planned to put millions into the area and were bemused by their reception. They spent £100m on feasibility studies alone, yet their expertise went unheeded.” Many believe the anti-gambling lobby settled it. Brindle’s not so sure. There were genuine concerns about a growth in addiction, and about the effect particularly on people who

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couldn’t afford to gamble. But he points out: “The guys from Las Vegas spend £150m a year – just in Vegas – treating people with addiction. The addiction rate among people who gamble is 0.1%. Here they envisaged something like £3m in Middlesbrough alone for counselling.” Why, he asks, was addiction the issue? “There were bigger political issues also we were never told about. It was a terrible mistake, without doubt. If they’d been allowed to come and build it would have changed how we gamble anyway. Many jobs would have been created.” And 4,000 companies would have benefited indirectly, Brindle reckons. “There was something fundamental that nobody got told about, I think. We were chopped off at the knees, got a letter saying they weren’t going to do it. We spent

18 months. They’ve built elsewhere in Europe instead.” Meanwhile, Warwick Brindle continues to lead Rockliffe upwards. “Sometimes the perception of a hotel is that once it is built, that’s it,” he explains. So instead, tennis courts are being planned, the golf course adjusted and improved. The “guest experience” will be enhanced by, for example, a wine tasting cellar. Also, one of the restaurants has already been remodelled. The original spa bistro is now Brasserie by Atkinson. A former national chef of the year, Kenny Atkinson is the hotel’s Newcastle-born, twice Michelin-starred wizard of the kitchen – familiar even to many who have not tasted his food, but who will remember him from his television appearances. Brindle says: “We’re extending Kenny’s influence because he’s a fantastic chef, a recognised brand name. This change has already had a fantastic public reaction.” And Rockliffe Hall Hotel, Golf and Spa Resort puts great emphasis on responding to public reaction. n

The North East Entrepreneurs’ Forum harnesses over 490 entrepreneurial members who are all at different stages of business growth and are passionate about what they do. Collectively they inspire, connect, and share knowledge and best practice with one another to create real value. This unique transfer of wisdom in a dynamic, entrepreneurial environment, supports growing businesses and helps to create the wealth, jobs and opportunities that are a major contribution to the sustainable transformation of our regional economy. To find out more please visit www.entrepreneursforum.net or call 0191 500 7780

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Until Sir Edmund Hillary and Tenzing Norgay had reached the summit of Everest, they would not rest. (Kathmandu, 1953.)

Why should Tenzing Norgay be showing your bank the way forward? It has been said that genius is 1% inspiration and 99% perspiration. We suggest there is a third component. Collaboration. As Sir Edmund Hillary and Tenzing Norgay proved to the world, even the most extraordinary talents need support if they are to achieve peak performance. This is as true of the world of finance, of course, as it is of mountaineering. Because as we all know, the economic climate can be as fickle as the rarefied air of the Himalayas. The pitfalls of ignorance as treacherous. The rewards of success as exhilarating. So until we’ve helped our clients in their efforts to achieve their financial ambitions. For more information about UBS Wealth Management please contact Nick Swales on +44-19121 11000

Wealth Management · Asset Management · Investment Banking

We will not rest

The value of an investment and the income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. www.ubs.com/wewillnotrest Names, images and/or references to third parties used in this advertisement are used with permission. Location and date stated in the legend indicate where and when the image was taken. © UBS 2011. All rights reserved.

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COMPANY PROFILE

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DOUBLY SKILLED SERVICE Two and a half centuries of providing sound financial advice might tempt anyone else just to sit back and reflect on their achievement.

OT Brewin Dolphin. Even as it marks just such an auspicious anniversary this year, this firm of investment managers and financial planners is also sending out a message with renewed vigour. Even in these uncertain times, it says, its business remains resilient. It has adapted by focussing even more intently on what it’s good at, while at the same enhancing its offering with development of financial planning services. John Duns, business development and marketing director, says: “We believe on the investment side we‘re as good as anyone. Our expertise and detailed research into global markets, sectors and economies deliver our clients best advice. A lot of our advice presently goes into protecting what the client holds. “Closely aligned to that, 18 months ago, our combined entry into financial planning. That has been a great success, fully integrated now into the services Brewin Dolphin offers in Newcastle. George Slack is often first point of contact for new clients and very popular with existing ones, Duns

The planners: George Slack (left) and Gareth Davies

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Onto the team: Tom Smith and Annabel Breakey says. He heads financial planning in Newcastle, and has been joined recently by Gareth Davies as assistant director of financial planning. Davies, a chartered financial planner, was previously with a prominent regional IFA firm. Originally from Liverpool, he graduated with honours from Newcastle University. The Newcastle centre alone has 14,000 clients, 10,000 of whom live in the North East. Duns explains: “Traditionally, a typical client would come for our specific investment advice alone, but now we provide also a broader service, and the guidance would depend on their preferred approach. We still do advise on where best returns are likely for particular needs. “We may ask: ‘What’s happening in your life – where are you going and how else can we help you with that?’ We can help people find the best answers, sometimes bringing in lawyers and accountants for their specialist expertise.” Are there children to consider? Succession planning to be done? Is your pension in place? Could the two be linked together? Have you sorted out your will because we can arrange that through a good lawyer? Enquiries and suggestions like

these may benefit an individual further. In other words, says Duns, the broader picture. Brewin Dolphin is turning attention presently to entrepreneurs, people running their own businesses, and professionals such as lawyers, accountants and doctors to name a few. With financial planning, such people can be helped a bit earlier than if they simply wanted some guidance in investment. For example, a doctor and a lawyer married may have good joint

Driving force: Mark Richard, of Northumbria University Sports Central (right) with John Duns (Brewin Dolphin) and the university golf team

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COMPANY PROFILE

Coming your way... Underlining its friendly nature and extensive community involvement, Brewin Dolphin is running a marketing campaign called, invitingly, We’ve Saved You a Seat. Brewin Dolphin offers a wide range of events during which people can meet its team. Says Duns: “Our programme results from our keenness to support the North East and also to work with our sponsors. While some events will be financially helpful, others will entertain. “

Take a seat Feb 16 How Research Helps Investment Portfolios, featuring analysts Guy Foster, Ben Gutteridge and John Newlands, Sports Central, Northumbria University (noon).

Feb 22 Crime novelist Ann Cleeves on her new book The Glass Room, Lit and Phil, Newcastle (6pm).

Entertaining: Celebrated speakers at Brewin Dolphin events have included Dr Adam HartDavis, who spoke on the Industrial Revolution income – but maybe also a hefty mortgage and children being educated privately. They may not have a suitable amouint to invest then. “Fine,” says Duns. “We can give financial planning advice for a fee. They may begin investing later – some ISAs, or the start of a pension plan for example.” The investment side has also been strengthened by new appointments recently, the latest being Annabel Breakey and Tom Smith, both educated at the Royal Grammar School, Newcastle, and graduates of Leeds and Aberdeen Universities respectively. And Carmen Baylis, “a rising young star”, has been promoted to assistant director. Brewin Dolphin continues to look for widely experienced people to ensure its record of sound investment planning is upheld in years to come. Duns stresses: “We’re very personable here. Our clients can meet face to face with any one of our investment advisers.” Besides the 250 years’ experience vested in the name Brewin Dolphin (founded in 1762) there was the 109 years Wise Speke brought with a merger. It’s now four years since the name of the Newcastle operation changed from Wise Speke. ”People are always welcome to come in and join us for a cup of tea. Brewin Dolphin marries old fashioned courtesy with highly sophisticated investment technology. It has a loyal client base, is independent and entirely British owned.”

Mar 13 Financial and Investment Planning, George Slack and Gary Fawcett answer audience’s questions on planning for the future and present economic climate, Brewin Dolphin offices, Newcastle (noon). Mar 14 Flying High, Geoff Cook, Durham County Cricket Club, and Fab Flournoy, Newcastle Eagles, in sports interview, Brewin Dolphin offices, Newcastle (6pm).

Mar 20 Financial Planning Surgery, George Slack and Gareth Davies consider your financial plans by appointment between 10am and 4pm, Brewin Dolphin offices, Newcastle. Book your appointment. Mar 28 Hold the Front Page, editor Brian Aitken shows how a daily newspaper is produced, Thomson House, Newcastle (1.30pm). Apr 2 Mission into Space, Radio Revellers present a 1950s type science fiction thriller, Theatre Royal, Newcastle (7pm). Apr 4 Securing the Future, George Slack (Brewin Dolphin) and Keith Hately (Muckle LLP) suggest ways to reduce exposure to businesses’ succession, Brewin Dolphin offices, Newcastle (noon).

Contact to attend events: newcastleevents@brewin.co.uk More events follow throughout the year.

Brewin Dolphin Ltd, Time Central, Gallowgate, Newcastle upon Tyne NE1 4SR Disclaimer The value of investments can fall and you may get back less than you invested. Past performance is not a guide to future performance. No investment is suitable in all cases and if you have any doubts as to an investment’s suitability then you should contact us. The opinions expressed in this article are not necessarily the views held throughout Brewin Dolphin Ltd. No Director, representative or employee of Brewin Dolphin Ltd accepts liability for any direct or consequential loss arising from the use of this document or its contents.

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Fraud busters: David Arthur and Frank Nesbitt are at the forefront of corporate crime which far too often goes unreported or under-investigated

Where crime really costs Last August’s wave of pillage across many parts of the country was a trifle compared with other crimes against business that government and, sadly, too many firms seem prepared to put up with, crime crackers Frank Nesbitt and David Arthur tell Brian Nicholls Let’s not be complacent that last August’s outburst of shops pillage and street crime that has so shocked our nation by-passed the North East. The £34m Scotland Yard asked of taxpayers to clear up the havoc compares with perhaps £32bn (yes, billion) lost to the country yearly through largely invisible fraud – plus £8bn trying to staunch it.

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So escape from that midsummer madness doesn’t save North East business from the losses suffered daily through fraud and theft. Many slyboots only appear on streets when skimming credit cards. Mostly they work behind closed doors – may even look “respectable”, being solicitors, accountants, financial directors or surveyors after all.

Investigator Frank Nesbitt says: “My police career was spent investigating solicitors. I know the tricks they can get up to. I put nine away. As they’re professionals, you think they will not do this sort of thing. But it happens. “A sole practice solicitor may be pressed to pay a VAT bill. They borrow from a client’s account, then maybe conceal that by taking

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from the estate of someone deceased. That’s one time the media does like to get hold of a fraud story: Solicitor Steals From The Dead... Surveyors can also grab a lump sum.” It doesn’t stop at solicitors. A barrister who built a sound reputation through prosecuting fraud and money laundering cases successfully at crown courts across the North of England was told at Leeds Crown Court only the other week that he himself faces a long jail sentence after admitting theft of £81,500 from his chambers. David Friesner’s career spanned 14 years and, particularly notably, he acted on the high-profile prosecution of former solicitor Thomas McGoldrick who was jailed for 10 years in 2008 for stealing more than £1m from a disabled client. Friesner admitted stealing the money over 13 months to 2009 but denied a further count of stealing £13,453.75 from the Crown Prosecution Service. He will learn the sentence he must serve at Leeds Crown Court on February 10. He is not the only fraud barrister who has been hauled before court in recent times, which doesn’t surprise Frank Nesbitt. He is forensic services manager with Tait Walker chartered accountants, and he and David Arthur, the firm’s managing partner, fight fraud in the North East vigorously from Newcastle. Mortgages are a seedbed for corporate crime and can run into millions, Arthur says. He recalls one individual taking out nine mortgages on the same property in one day. Nesbitt says an investigation into developers and a 52-property mortgage is currently under way. The insurers, who are the injured parties, have accepted Tait Walker’s findings that the matter is linked to a current investigation being carried out by the Serious Fraud Office, and the accumulated evidence has been passed on. Many of the biggest hauls are being made by foreign gangs working globally. Nesbitt, built like a prop forward about to take on the All Blacks, would probably terrify many of the crooks had they to confront him. But they, particularly in cyber crime, work undercover. Intelligence is a vital defence but expensive. The present Government – like others before – has only vague concepts of corporate crime

and little obvious inclination to invest in real battle. Nesbitt explains: “It has taken horrendously long for government to realise just how much corporate crime costs Britain. For years statistics have only reflected low-level – “blue collar”– crime because this has always been the Home Office way. That management commits crime isn’t seriously considered. “Only in recent years has government recognised what fraud as an umbrella term may be costing businesses and taxpayers,” he says. “Appropriate statistics have not been in play long enough.” David Arthur sits on the National Business Crime Forum. He complains: “The Home Office measurement of all business crime gives nothing to guarantee any quantum to go on – only reported and convicted prosecutions that have gone through. “So only the iceberg’s tip is reported. Hidden away is a host of corporate crimes – from executives fiddling expenses to massive procurement frauds. “Regularly, an offended corporation’s first

INSIGHT

reaction, sadly, is to try burial by PR to minimise the damage. They often deal with it at an HR level – compromise by moving individuals on, where it can all happen again.” The bigger the company, often the greater the hush-up. Fraud fighters have to play catch-up because you never hear of armed fraud, Nesbitt remarks wryly. On the criminal gang level, fraud finances prostitution and drug and people trafficking. Arthur regrets the political apathy: “Political response comes mainly when many voters are affected,” he says. “Politicians don’t usually acknowledge that corporate crime is bigger perhaps than almost all other theft put together.” Among corporate crimes hardest to crack are: Carousel frauds: Criminals set up serial companies and fictitiously trade items to get back the VAT. They build debts and, having diverted the money to other uses, put the companies down, cheating HMRC and the nation. Long firm fraud: Criminals dump a firm >>

Why they do it There are many reasons why people “dip the pot”, as Nesbitt describes it. • A director sees figures falling and falsely jacks them up. Someone else buys the business. Suddenly creditors and unpaid staff descend. The buyer has to liquidate. Fiddler and spouse or fancy companion, meanwhile, tan themselves at their Spanish villa or on their cabin cruiser. • A trusted individual hits financial difficulty. They dip into company cash intending to pay back. But pressures grow, or no suitable opportunity arises. Worse, having got away once they get greedy and return repeatedly. • Someone borrows from a dodgy source at outrageously high interest, has an unmanageable gambling debt or an over-commitment on a mortgage or credit cards. They fiddle. If organised gangs find out, the individual is truly hooked. • In 65% of customers’ data thefts, the culprit passes the information to third parties. When credit card skimming took off and innocent people began having their details stolen, large corporations considered costs of putting in control procedures against losses from the actual fraud – then decided instead just to spend on tackling the problem round the fringes. Gangs from Nigeria and the Eastern Bloc are confident they won’t be caught. The only consolation – all countries are a soft touch, with the US softest. • Tax evasion tends to be a byproduct of other misdemeanours. Many people, from the boss down, try to live above their means.

The North East crimesheet:

www.bq-magazine.co.uk

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INSIGHT

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into liquidation then buy it back or use ill-gotten gains to form another company. They do this repeatedly, using different owner names – but still working together. No-one may be apprehended because no-one remains in the end to fund the bill, and evidence is too sparse to prosecute. In fraud, getting proof of guilt beyond doubt can be difficult without enormous work and painstaking detail. Long firm fraud can stretch over years before a pattern is traced, becoming too costly to act against. Stopping it is difficult without hurting business owners who are starting up again after genuine misfortune. Often victims are individuals. Northumbria Police tell of a woman internet-banking in Surrey who suddenly found her screen frozen for 20 seconds – long enough for her account to be emptied. Russian Mafia in the Philippines had remotely used Mr and Mrs Cannybody’s 24-hour internet system in Cramlington to break into this victim’s computer and make their haul by a simple keystroke. Boiler room scams – again punishing individuals – rob UK investors of about £200m a year. Too few people realise the Financial Services Authority lists phoney firms operating outside British jurisdiction on its website. A phone caller may offer cut-price shares ahead of official flotation. This ruse feeds on people seeking unrealistic returns. “If an offer sounds too good to be true, inevitably it will be,” says Arthur. “Don’t fall for it.” A growing scam now, Nesbitt points out, is in the “green energy” market. False companies are offering to fit solar panels and other energy-saving installations, giving plausible explanations for outrageous charges. The Government is facing frauds around carbon emission units. Meanwhile, Tait Walker takes instructions regarding suspected “cash for crash” claims – deliberate car collisions to claim insurance illegally. Politicians often argue the private sector should fund its own crime fight. But damage strikes the entire economy, costs jobs and stifles wealth creation. And, while governments play it down, it robs the Treasury, and through that the honest taxpayer has to

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Horrendous fraudsters may get off with nine paltry months to a year. A Friday night bottle fight in the Bigg Market might bring a sentence of three years

fill the void. Spending cuts now enable faceless criminals to flourish. Arthur points out: “Across the UK, economic crime units are being disbanded. Economic crime is being slotted into a ‘too hard to resolve’ category. Cost of success is deemed too high.” Northumbria Police said earlier its financial investigators were being reduced from 60 to 20, and the fraud squad was disbanded from October 1, though a sergeant and six detectives will still investigate big financial crimes. These, however, can require globetrotting, stakeouts and other activities straining resources already stretched. “Most forces now don’t have an economic crime unit or fraud squad,” Nesbitt says. “Dealing with a complex fraud effectively may require 10 or 12 skilled fraud officers. Northumbria Police has never had that number, as I recall. Resources may be removed because cracking a couple of burglaries is easier.” Arthur observes that while crime prevention groups encourage public awareness, they are disparate and under-resourced so their message is muffled. The National Crime Forum hopes companies will at least stop hushing up internal incidents, and thus destroy the myth that blue collar exceeds white collar crime. Media too could review news attitudes. Uncovering fake and counterfeit goods and

products such as cigarettes and alcohol, understandably, is widely publicised. Nesbitt, however, believes too much fraud is underplayed in the media – considered not “sexy” enough. “The higher up the tree, the more easily a company executive can manipulate figures,” he says. “Time’s lost because who will demand of an errant financial director, ‘What the hell are you up to?’” More than 75% of UK office workers would actually turn a blind eye to an office malpractice, research from the Federation Against Software Theft suggests. Even when a case has been prepared, an appropriately competent barrister or a judge may be scarce. “Too few barristers are skilled in handling fraud inquiries,” says Nesbitt. “Again, it’s economics. A barrister in a fraud case may earn £25,000, whereas taking two or three burglary cases may bring in up to £70,000. “With judges you can often tell from their sentences. Horrendous fraudsters may get off with nine paltry months to a year. A Friday night bottle fight in the Bigg Market might bring a sentence of three years.” Arthur argues: “Money should be used more to protect money. Government did try to introduce a national fraud reporting authority. But at the Home Office, corporate crime is still just a theft or a break-in. For business it’s taxation without representation. Business faces a fallacy that no-one’s going to be hurt, but the number of businesses we see struggling to survive, or even going down, is distressing.” Fraud was only recently defined by the Law Commission, tasked by Jack Straw when Home Secretary. “If the present Government, which professes to champion law and order, accepted the seriousness of fraud and set a stall out, that could impact on the other crime people talk about,” the two investigators agree. The North East Fraud Forum website lists 10 tips to minimise crime in business. More than £4m has been confiscated in cash and kind from North East criminals in two years as police use court powers to retrieve ill-gotten gains under the Proceeds of Crime Act. But only part of that involves corporate fraud. A proactive approach by many more businesses would limit the damage further. n

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COMPANY PROFILE

“A new urban quarter in the centre of Newcastle which will be an exemplar in sustainability – attracting leading edge scientific organisations to a mixed new community encompassing a variety of educational, business and residential uses.” That is the vision for Newcastle’s ambitious Science Central site.

BUILDING A SUPPORTIVE BUSINESS ENVIRONMENT

he 10.5 hectare site, formerly occupied by the scottish and newcastle brewery, represents the largest city centre development opportunity in over a decade and the city’s leaders are determined to maximise its economic potential. as a city of science, the attraction and retention of the world-class scientific and commercial talent that will fuel the new site is critical and a dynamic business support system has been established to create a unique environment in which science and technology companies can thrive alongside one another. from the groundbreaking business opportunities programme designed to inspire innovation by highlighting market needs, to the hugely popular first friday networking sessions, newcastle has developed a whole package of support to accelerate science and technology-based business ideas with high growth potential. its high profile science of success business events regularly bring together renowned and potential entrepreneurs, its expertise in accessing european and domestic funding streams helps companies finance their ambitions and its work with newcastle business and iP centre provides

Inspiring innovation, a Newcastle Science City business workshop workshops, seminars and one-to-one sessions to ensure companies always have access to specialist know-how. newcastle science city’s potent combination of commercial knowledge and unique access to university expertise has made it the first port of call for businesses looking to exploit opportunities and develop ideas. already the team has helped create 23 companies and has worked with 70 regional smes on a high level, long-term basis to commercialise new

insight-led ideas, innovate and grow. The team has decades of combined business experience in organisations of between 1 and 100,000 people, across various sectors and on five continents. The common thread through all of this experience is in the development and launch of new products and services. by building a supportive business environment now, newcastle is ensuring science central becomes the natural home for science & technology companies in the near future.

pOOLING WORLD-CLaSS KNOWLEDGE TO LaUNCH NEW BUSINESS IDEaS newcastle science city’s business opportunities programme pools the city’s world-class scientific research to help launch new products and services. The programme is designed to provide entrepreneurs and innovative companies with in-depth knowledge of specific market opportunities which have already been identified by experts in their field and address real-life challenges impacting on social and corporate issues in the areas of ageing & health and sustainability. During briefing sessions, ‘opportunity canvases’ are used to paint a picture of each commercial opportunity to the business community. This unique insight provides a ready-made needs analysis to help accelerate the process of bringing a product to market. businesses inspired to develop ideas are then offered support to take them forward. companies with existing ideas, meanwhile, can test them against the specific market knowledge that has been collated. To ﬁnd out more about the programme and to view opportunity canvases visit www.newcastlesciencecity.com/business

The team is always keen to hear about new business ideas that they might be able to support. Meet them at one of the Science of Success events at Newcastle City Library (visit www.thescienceof.co.uk for details), call 0191 211 3015 or email simon.green@newcastlesciencecity.com to ﬁnd out how they can help. Newcastle Science City is part ﬁnanced by the European Regional Development Fund (ERDF), managed by the Department for Communities and Local Government, securing £2.3million of ERDF investment.

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SUCCESS STORY

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SUCCESS STORY in association with

A FORCE IN THE AIR From its home in a hangar in the North of England a team of aviators jets off every day loaded with the latest technology in search of adventure and new opportunities, as Andrew Mernin finds out

Toilet roll, water and fruit. They are the bare necessities, as Ron Raison has learned from his time at Cobham Flight Inspection, which must be packed before embarking on a mission to Yemen. You see, there is no such thing as a typical day at Cobham. Flight inspectors could start the day on a cold strip of Tees Valley tarmac and finish it in the baking heat of Afghanistan, via a stop-off in Jordan. While field trips for many business people involves conferencing in the Midlands and a night in a Travelodge, at Cobham, staff could be sent at relatively short

notice to anywhere from South Africa to Kazakhstan, sometimes for weeks at a time. Meanwhile, its military specialists can often be found engaged in war games, flying against Her Majesty’s finest and doing all they can with various gizmos and even chaff, to test radar and navigation systems to their limit. From its base at Durham Tees Valley Airport, Cobham’s North East-based subsidiary is targeting growth of around 10% this year, after two tough years in 2009 and 2010, during which it reduced its workforce from 85 to 70 as European airport operators became

The big issue will be leaving and losing key people. If we were to lose people that would just kill the business. It is about not moving people too far

increasingly squeezed in the recession. The company is now in recovery mode, with annual turnover of around £13.5m last year – a figure that is likely to rise beyond the £14m mark by the end of this year. At the time of writing, the company is also weeks away from discovering if, as expected, it has landed a £5m contract to work with the South African Air Force. “I’m going to go out there at the end of February and we are moving towards them making a decision,” says Raison, the Wolverhampton lad who narrowly missed out on serving in Iraq and the Falklands during his RAF days. “For the future, we are looking at expanding our presence across Africa, which we see as one of the world’s growth areas.” Other recent contract wins for the firm include a £1m deal for work in Ireland and a £10m, four-year deal with the MoD to work on all airfields across the world where British troops have a presence. >>

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INTERVIEWSTORY SUCCESS AUTUMN 11

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We’ve pushed the airport’s owners to try and give us an indication of any potential purchasers and they are just keeping their mouth shut Cobham has a fleet of four Beechcraft King Air planes, which are each valued at around £5m when kitted out with the required onboard equipment. It has also recently invested close to £1m in a new Diamond model, which Raison explains is smaller and therefore a more cost-effective alternative for certain projects. Before taking up his post at Cobham during the height of the credit crunch, Raison previously spent time in these parts when the military posted him to RAF Leeming in North Yorkshire. He recalls arriving in the region on a bus which dropped him a considerable and muddy distance away from his new home. “The bus driver told me he wouldn’t go any further. It was freezing cold, I was covered in cow shit and I thought, ‘What the hell am I doing?’” By the time Raison finally returned north on Cobham’s orders, rather than the RAF’s, he

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was a successful sales and marketing man. In the early stages of his tenure the company avoided any recession-related turbulence – no mean feat against the backdrop of high street retailers and banks plummeting deep into the red. In fact, so busy was 2008 that the firm was forced to turn work away from all over the world because of its limited number of aircraft. Then in 2009 the gloom of the downturn finally did clog up its engines. “The recession suddenly hit and we were being told by the UK operators that they had lost 20% of their market, while Spain had lost 30% of its market,” he says. “The only market that was holding up was out in the Middle East but nowhere else were they spending money on new equipment. A quarter of our business had been about new work and all of that had dried up. “The military work is different because they budget for the next year and once the money

is in there it is allocated, if they don’t spend it they don’t carry it over into the next year, so if they have committed to replacing all of their equipment, they will replace it. That said, if we check their equipment and it fails, they can struggle to find money to do additional checks.” Currently in the Middle East, Cobham’s team is involved in a project to install 17 new instrument landing systems in Oman and 21 new radars in Saudi Arabia. The company is also heavily involved in Afghanistan on behalf of the British, German, Italian and Spanish air forces, while another of its markets is Raison’s most memorable getaway – Yemen. “Work out in the Middle East in summer is about 52°C,” he says. “Air conditioning on an aircraft works because it stays high. As soon as you get on land, or below 10,000 feet, the aircraft gets red hot. When we went to Yemen there was no water in the toilet, no toilet paper, and the restaurant only served meat and one of our team was a vegetarian. “People think the job’s interesting, but it does get tiring.” The sweat and sand of Yemen seems a far cry from Tees Valley in winter but its purpose-built facility on the site of Durham Tees Valley Airport has been home to the firm since a cost-cutting exercise saw it move north from Stanstead in 2005. With the airport suffering from a worrying decline in route and passenger numbers in recent years, and currently at perhaps its lowest ebb for some time, talk inevitably turns to the future. And Raison is quite happy to ponder the elephant in the room; what would the company do if the airport did close? With the airport’s owners Peel Holdings putting its stake in the facility on the market at the turn of the year, uncertainty lingers over Cobham’s future on Teesside. “We’ve pushed the airport’s owners to try and give us an indication of any potential purchasers and they are just keeping their mouth shut,” says Raison. “They don’t want to put off anyone who is interested in buying it. We’d like to stay here and it would be our preferred location.” For now, even with the airport continuing to operate, its fading status as a transport hub >>

Hay & Kilner presents: THE GOOD, THE BAD & THE AWKWARD (an employment seminar by way of role play)

AIM: How to avoid costly employment claims, legal fees, lost management time and loss of sleep. Scene 1: A director and lawyer meet to discuss a potential dismissal where the personality of an employee is causing problems with the director and his staff. Scene 2: The director, upon a claim being made, is cross-examined in the Tribunal on all aspects of the dismissal and particularly, the mental process in reaching the decision.

Venue: Centre for Life, Newcastle Date: Thursday 26th April 2012 Time: 8:30am - 10:45am To reserve your free place at this seminar contact Jenny Simon. Call: 0191 232 8345 Email: jenny.simon@hay-kilner.co.uk Visit: www.hay-kilner.co.uk to book a place online Clients recommend Hay & Kilner’s employment team: “Neil Dwyer provides great and expert advice. He gives his own opinion, which is what you need rather than some solicitors who give you text book advice.” “Sarah Hall is thorough, flexible, approachable, clear, pragmatic, friendly and highly professional.” “I couldn’t have asked for more. Sarah Furness is very understanding and extremely helpful.”

INTERVIEWSTORY SUCCESS AUTUMN 11

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Ahead for business Whether you’re starting a new business or run a multi-million pound enterprise, we want to help you achieve your ambitions. We believe in providing the best possible breadth and depth of support to you and your business and that’s why our team of locally based Relationship Managers go through independent accreditation to ensure they fully understand the challenges and opportunities for your business. It’s also why we have developed a wide range of products and services that can be tailored to meet your needs – whether it’s through specialist financial propositions, unique business planning and management software, or sector and industry information, guides and case studies. And why we provide a network of business service experts who can provide additional support and even outsourcing of your legal and HR requirements. For further information contact: peter Sleigh, Regional Director Commercial Banking, north Email: peter.sleigh@natwest.co.uk has impacted on the way Cobham operates. “It does matter that the airport is not what it used to be,” admits Raison. “A lot of our work is done during the night, for example with our radar work for the military, the guy will finish at 2am but they can’t get back in here because it’s only working till 12:30am. Yes, we would consider moving but we are not going to move unless this closes. “We keep an eye on things and talk to the guys at Peel in Manchester to try and find out what’s going on. We wonder what the heck they mean when they say ‘use it or lose it’. “Does that mean we have to find new places to go?” But even if Teesside does eventually lose its airport, Raison is keen to keep Cobham in the North East, largely because of the need to keep his extremely specialist staff on board. “All other local airports have come to us and

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said they’d like us to consider coming to them. Newcastle has seriously offered. “The big issue would be leaving and losing key people. If we were to lose people that would just kill the business. It is about not moving people too far and the closest airport is Newcastle.” Judging by the vast year planner that stretches the length of the Cobham HQ office wall, the coming months will certainly be busy for the team. Pieces of coloured card denote missions to Botswana, Tunisia and Portugal, although Raison admits that staff members who are young, single and unattached tend to get the lengthy gigs in sunnier climes. As the ex-military Midlander holds the fort on Teesside between trips to Europe and beyond, the challenge ahead is to find enough extra work to justify the continual expansion of its fleet. n

Michael Burrow, Regional Director Business Banking, north Email: Michael.burrow@rbs.co.uk Try our online business planner by visiting app.natwestplanner.co.uk ahead.natwest.com

Security may be required. Product fees may apply. Over 18’s only. ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER DEBT SECURED ON IT All information within this magazine is produced by room501. Please note that the views and information have not been endorsed, issued or approved by NatWest. Any views expressed in this magazine are not necessarily those of NatWest.

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THE 2012 NORTH EAST CIPD AWARDS WILL TAKE PLACE ON 3RD MAY AT THE NEWCASTLE GATESHEAD HILTON. NIGEL WRIGHT RECRUITMENT IS DELIGHTED TO BE THE ASSOCIATE SPONSOR FOR THIS YEAR’S EVENT.

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3090 BQ Corporate full page CIPD Focus Jan 2012.indd 1

1/20/2012 5:26:39 PM

AS I SEE IT

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BEWARE SEARCH ENGINE ROGUES With almost £80bn likely to be spent online in the UK this year, business leaders need a carefully planned SEO plan now more than ever. As Andrew Mernin reports, however, finding a trusted partner to help achieve that may be easier said than done

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If you can outrun a Google panda, tread carefully around the Google spiders, and avoid confrontation with the Googlebots, you might have what it takes to win the search engine optimisation (SEO) battle. But the fight to the top of search engine listings is never over. Once you’ve reached the top of the mountain you are faced with an ongoing war as you defend your territory from competitors vying to overthrow you. In an industry full of jargon – much of which evokes images of Doctor Who baddies or a journey to a futuristic dystopia – finding a trusted SEO supplier is never easy. Furthermore, ensuring your company achieves long-lasting results with the precious funds

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They’ve clearly done no research on our business and they make all sorts of wild promises for suspiciously low prices

invested in your chosen SEO partner is equally difficult. From its beginnings as a dark art bordering on criminal activity, SEO has evolved dramatically. And in 2012, thanks to a perfect storm of favourable conditions, demand in the sector looks set to soar. Internet speeds are getting faster with Virgin Media and BT leading the charge. Traffic is at an all-time high – Sainsbury’s recently reported a 20% leap in e-commerce sales in the run-up to what was its busiest online Christmas on record. Wages in senior SEO positions are also reportedly going up, creating a clamour among the technologically-gifted to get involved in the sector. Throw in a greater hunger for online revenues and there is plenty of evidence to suggest a strong year of growth ahead for SEO in 2012. But as demand goes up, so too will the number of unscrupulous search engine cowboys who prey on businesses that don’t know their affiliates from their algorithms. By wowing marketing managers with too-goodto-be-true promises at rock bottom prices, they play a game of white smoke and mirrors that ultimately ends in disappointment for the unsuspecting corporate customer. Many North East businesses I have spoken to in recent weeks tell me they are inundated with calls from alleged SEO champions promising world domination, for less than the price of a hot dinner. And, as one Newcastlebased marketing executive advised me recently, these calls are not coming from distant lands where many online scams originate, but from UK-based operators. “They’ve clearly done no research on our business and they make all sorts of wild promises for suspiciously low prices,” says the executive whose large firm offers professional financial services to thousands of the region’s businesses. “We won’t necessarily spend more on SEO this year, but we will have more focus

on SEO,” he adds. One of the region’s SEO suppliers which certainly has no cowboys in its ranks is Mediaworks – just ask ScS, Azko Nobel, Eversheds or one of its other major national and international clients on its books. Founder Brett Jacobsen sees unqualified, inexperienced or just plain immoral SEO “professionals” as the industry’s single biggest threat. “If it sounds too good to be true, it definitely is,” he says of the rising tide of SEO cowboys offering £50 to £100 a month promises to get your business to the top of the search list. Neil Robbins, managing director at affiliate marketing firm Silverbean – also based in Newcastle – is equally scathing about “charlatans” who promise the world but deliver little. But the firm’s current growth, which looks set to take its annual turnover from £1.2m to £2.5m in the next 18 months, perhaps proves that demand for SEO services in the North East has held strong, despite many business leaders getting their fingers burned by con artists posing as pros. Of course, SEO is not the only industry damaged by an influx of the underqualified. Will writing, web design and PR are among numerous sectors whose standards are challenged by rising redundancies which have forced people into launching services they may not be able to deliver to the expected level. However, with online sales continually breaking records, not investing in SEO is not an option for any business with a web presence. Last year, online retail sales rose by 14% to more than £50bn, with predictions that the growth will continue to hit high streets, according to a new report. Shopping comparison website Kelkoo predicted a similar increase this year, well above the expected 3.65% rise in total retail sales. Online shoppers spent an average of just

AS I SEE IT

under £1,500 each on 39 items last year, with internet retail trade accounting for 12% of total spending, the highest in Europe. A similar recent report from the IMRG Capgemini eRetail Sales Index predicts that £77bn will be spent online in the UK this year. All of which highlights the pressing demand for goods and services firms to fight their way to the top of searches constantly and consistently. It is not only investment in SEO that is required, though; it is the right investment in the right SEO partner. ■ ...and now, for you, another valuable BQ service. As online traffic, shopping and the number of internet service providers all continue to surge, so does demand among directors and executives for business news, features and insight on the go. BQ has responded by this month launching our new online portal, bq-magazine. co.uk which features all the in-depth editorial content of the magazine, as well as breaking news and analysis on all the North East’s key sectors. Business leaders looking to break into Yorkshire or Scotland, or who already have an interest in these markets, can also keep an eye on things beyond the North East, with regularly updated news and features from our award-winning journalists based south of the Tees and north of the Border. Register with us and you also have the ability to tailor your own personal magazine content, choosing which content you wish to read from our regions and join other BQ readers to contribute your own thoughts while also having access to a range of unique offers and special promotions. Readers can also keep in touch with our regular BQmobile, which charts our most recent key interviews and stories, as well as news and events of interest that we feel are worthy of your time. Find out more by visiting www.bq-magazine.co.uk

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COMMERCIAL PROPERTY

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Scotch Corner becomes Holiday Inn, Science Central progresses, Esh secures funding, there’s a use for old buildings after all, agencies take on new names, and the call goes out for surveying graduates >> Design delights The Northern Design Centre at Gateshead – well under construction – has already given the region’s building industry a £5.75m boost. Managed by Gateshead Council, the project has provided work for 35 people so far. Council leader Mick Henry says of the four-storey centre at Gateshead Quays: “This unique building will be a showcase for our constructional as well as our creative talents.”

Looking ahead: Property consultant Kevan Carrick, left, with new appointee Thomas Conneely

>> Talent shortage threatens At a time when the professional sector in property has seen a drop in graduate trainee places, JK Property Consultants has appointed a Northumbria University graduate, Thomas Conneely, on a training contract to become a chartered surveyor. Kevan Carrick, principal of the Newcastle firm, says: “Universities have continued to produce surveying graduates throughout the recession, but firms have contracted. Training places have been cut. However, a graduate must be employed throughout their RICS Assessment of Professional Competence (APC) to qualify as a chartered surveyor, so it is vital that firms restart and expand their training programmes, otherwise, there will be a shortage of qualified professionals in the next few years – just as economic recovery is expected.” After a successful work placement, Conneely graduated with a first-class honours degree in estate management, and academic accolades that included the Northern Rock Award for top student and the Telereal Trillium Valuation Prize. Conneely, from Tynemouth, was a reserve officer in the Royal Air Force, stationed at RAF Leeming as part of Northumbrian Universities Air Squadron. He is a volunteer instructor in sport for Air Cadets, helping them through the Duke of Edinburgh Awards Scheme.

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In demand: Industrial space is being taken up on North Tyneside

>> Saturn’s in orbit Advanced Industrial Solutions has taken 14,000sq ft of industrial space at Gladedale Capital’s Saturn Court in North Tyneside, leaving only one unit remaining. Jones Lang LaSalle, agents on the development with GVA, has let units 9 to 11 to the industrial services specialist, which already has a 5,000sq ft unit on the business park. The firm is expanding its training for the industrial and oil and gas sectors. Saturn Court is part of Orion Business Park, at the junction of the A19 and the A1058 Coast Road in Newcastle. The development has 11 high specification units ranging from 3,500sq ft.

>> £61.5m mop-up in the region Two hefty contract wins look like sending £61.5m worth of North East building work the way of Surbiton, Surrey, builder Willmott

Dixon. The company is starting the first stage of building in a £33m contract to provide a centre for start-up businesses, combined with a leisure and community complex in the heart of Redcar. This adds to the £28.5m development already under way of a new central police headquarters in Newcastle, converting the six storey King’s House and an adjacent warehouse on Forth Banks behind the Central Station. The builder, in the first of a two-stage contract, is now also erecting the business centre for Redcar and Cleveland Council, which calls also for a six-lane, 25-metre swimming pool, a dance hall and performance space. Further included is a debating chamber and relocated registrar’s office. It is hoped entrepreneurs will be attracted to the centre, creating jobs for locals. The leisure and community development comes under the council’s economic master plan to create and attract 14,600 new jobs, 600 new businesses, £4.5bn of private investment and £291m of public investment. Anthony Dillon, managing director for the firm’s northern office, says: “We built the first BREEAM ‘outstanding’ health facility for NHS South of Tyne & Wear in Houghton-Le-Spring, and appreciate the importance of the ‘local pound’. We use local businesses and support local jobs whenever possible.” Willmott Dixon is working with S&P Architects on the leisure side of the Redcar scheme and with +3 architects on the civic and business facilities. It is using Buro Happold for all structural and civil engineering work. Willmott Dixon also got the job of building Redcar’s 80ft vertical pier.

>> Bridges building Construction group Morgan Sindall is doing the £15m expansion of The Bridges shopping centre in Sunderland.

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COMMERCIAL PROPERTY >> New looks for North East agencies Consolidation in real estate dealing has brought big changes to a North East property business. Niche consultancy Edward Symmons, has acquired Storeys:ssp Ltd. And DTZ is now part of Australian support services group UGL. Symmons chairman Paul Proctor says Storeys:ssp now gives expert exposure and coverage within the North East as part of the firm’s national development ambition. “The North East agency team’s strength is well known,” he added. The addition of Storeys:ssp’s 71-strong team has taken Symmons’ staff total up to 285 in all. The firm’s £17m turnover compares with Storeys:ssp’s £4m. Founded in Newcastle in 1891, and operating from a network of five regional offices, Storeys:ssp has long been regarded as a leading independent. Some of the staff are moving to the buyer’s offices in Leeds, Manchester and London. Storeys:ssp’s existing Tyneside and Teesside offices remain the dominant regional offer, employing 59 staff. The North East operation is now trading as Storeys Edward Symmons (forming part of the Edward Symmons Group). Bill Lynn, chief executive of Storeys:ssp says: “We see this as the start of an exciting new era.” DTZ, whose roots go back to Birmingham in 1784, was the first property agent to list on the London Stock Exchange, in 1987. It was first also to move into China. But parent company DTZ Holdings was recently put into administration and delisted. Trading entities were immediately sold to UGL and DTZ’s 4,700 staff transferred in return for UGL repaying £77.5m of DTZ’s £106m of debt to Royal Bank of Scotland. Shareholders, including 175 present DTZ staff, were to receive nothing, whereas five years ago DTZ was worth nearly £500m. But jobs have been saved and DTZ chief executive John Forrester thinks DTZ and UGL an “exceptional fit”. DTZ hit problems just before the recession, following a spending spree to buy Rockwood in the US and retail agent Donaldsons. Recovery looked possible at first.

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>> Smart move More than 400 jobs may be created in a warehouse that Clipper Logistics is locating to distribute Asda’s George brand of clothes from Wynyard Park, Stockton. It’s a £15m investment in 350,000sq ft by the Leeds firm, which will later serve other users too.

Tyneside, should be finalised soon. For an investment, landlords have their buildings brought up to standard tenants want, with value added by LG Developments. Then The Office Company fills the space, manages the building, the tenants and all services, from liaising with IT and telephony companies to providing cashflow forecasts for the landlord, from liaising with the local authority valuation officers to get rate relief and marketing to invoicing the rent and sundry items and collecting money.

>> Industrial builds resume

Revivalists: Lynn Gate, founder of The Office Company, with Graham Hall of Bradley Hall, who are helping landlords breathe new life into empty buildings

>> New approach revives empty offices Landlords of office space are being offered a lifeline in a new approach to bring empty buildings back from the brink. Lynn Gate says many small businesses still need offices. They are put off by a sector driven by agent and landlord fees, long leases and inflexible terms. Her own business, The Office Company, has maintained 95% occupancy at Metropolitan House, near the Gateshead Metrocentre, with more than 30 small-medium organisations taking space. Now the company, in partnership with office fitter LG Developments, and working with agent Bradley Hall, has developed a model for reviving derelict space and managing it on behalf of landlords. The first under the scheme, Moor Chambers at Framwellgate Moor, Durham, has welcomed its first three tenants. The 7,000sq ft building, which was empty for three years, has had a £250,000 refurbishment with all the tenants managed and supported by The Office Company on behalf of owners TJD Properties. Another building, at Forest Hall on North

A four-year lull in building large industrial space in the North East has ended with UK Land Estates about to construct a £7.5m, 200,000sq ft factory at Team Valley in Gateshead. UK Land is working in partnership with the Homes and Communities Agency as North East Property Partnership on this project. A spokesman says NEPP is close to securing prelets though work on the factory is not due to start until summer. No industrial space remains on Team Valley otherwise. Tony Sarginson, of the Engineering Employers’ Federation, says:.“The news that building quality industrial premises is resuming shows confidence in the sector.”

>> Down to business Business space is now being let in the lower area of developer Quintain’s 80-apartment Community in a Cube block, seen here as originally envisaged, nine storeys tall and standing near the Transporter Bridge at Middlehaven in Middlesbrough.

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Comms/563/Jan2012

COMMERCIAL PROPERTY >> Esh wins nuclear build Esh has won a £5.5m contract to design and build a new construction skills centre at Lakes College in West Cumbria. Site work should start in early spring, with construction taking 48 weeks. The centre will

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take on around 280 trainees a year for the nuclear sector facing skills shortages now as older workers retire. Esh recently reported revenues up by 25%, partly with work wins beyond the North East. But the Bowburn, Durham, group has also

New owners: Members of the Handa family, new owners of the Scotch Corner Hotel

>> Global presence

>> ‘Gateway’ hotel transformed The famous Scotch Corner Hotel, southern gateway to the North East, is no more. It is now – take a deep breath – the Holiday Inn Darlington A1 Scotch Corner – following a £3m revamp and creation of around 50 jobs by a new owner. An iconic building at the junction of the A1 and the A66 near Darlington, it has been restreamed to attract more markedly families, business trade and holidaymakers on the move. Established in 1939 on the site of a 16th Century coaching inn, it offers four-star services and facilities. Besides 91 executive and standard en-suite bedrooms, the hotel now has a staffed business lounge with computers and internet access. There is a 75-cover Fratello’s restaurant, and work is under way on spa facilities. Cairn Hotel Group’s hospitality now reaches from Aberdeen to London. In Newcastle it has, besides the newly opened Double Tree by Hilton at the airport, the imposing Royal Station Hotel, the Cairn and Carlton in Jesmond, and Rooms – while in Darlington it has the also recently acquired King’s Hotel. Expansion begins: Work is under way on a new 18-hole championship golf course – the first stage of a multi-million pound leisure development and hotel expansion at Ramside Hall Hotel and Golf Club in Durham. Ramside Estates Ltd also has permission there for 34 upper-range homes, a new conference and banqueting centre, a leisure centre with gymnasium and spa and 48 more bedrooms for its four-star hotel. The development is expected to provide 104 jobs and generate an additional £11m of spend in the Durham visitor economy. The hotel and golf club already employ 550 people. Visitors to the hotel spend £2.67m a year in the local economy. On the market: Two notable North East hotels – the four star Vermont Hotel in Newcastle and the Jersey Farm Hotel at Barnard Castle. The Vermont continues to run, despite its parent company’s entry into receivership. The hotel, which took over the old Northumberland County Hall beside the Castle Keep in 1993 has been a success but in September the 101-room building was put onto the market for £9m. The Jersey Farm, a popular dining haunt, has been in business since 1976 and has 22 rooms and conference facilities. John, Jean and Mark Watson who run it are retiring. Travelodge double: Budget chain Travelodge is opening hotels in Stockton and Sunderland this year under a major expansion creating 880 jobs in all. The Stockton hotel near the Yarm Road junction on the A66 is to open in November.

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opened the year working on the first of 541 affordable homes in the North East and Cumbria at Government behest. This is the first of £61m worth of contracts. The initial contract, the first of its kind signed nationally, represents almost 6% of all funding allocated to the North. Esh secured a grant of £10.4m from the Homes and Communities Agency under the Government’s Affordable Homes Programme to increase supply of new affordable homes in England up to 2015. Of the 541 builds, 164 are in Cumbria, and 377 in Northumberland, Teesside and Durham. Most will be for “affordable” rental, but some will be for “affordable” ownership, supported housing and social rent.

A world-leading contract manufacturer in biopharmaceuticals has taken additional new premises in Billingham to expand. Agents Sanderson Weatherall handled the 10-year lease of a 1.65 acre site on Cowpen Lane to Fujifilm Diosynth Biotechnologies (UK) Ltd. Last year, Fujifilm bought MSD Biologics (UK) and US company Diosynth RTP Inc which, between them, comprised all assets of the Merck Biomanufacturing Network.

>> Science takes root Work is going on to prepare Science Central, the 24-acre former Scottish & Newcastle brewery site, and make the central Newcastle site ready for development and improvement. To create a permanently stable platform for buildings, up to 60,000 tonnes of near-surface coal may have to be removed and replaced by surplus materials already on site from previous demolition of the brewery buildings. The site, owned by Newcastle Council and Newcastle University, is a 15-20 year project. Later this year, application will be made for gateway building proposals and permanent landscaping. The building will be used to promote sustainable science, and will have an incubation centre, spaces to attract new and established knowledge-based businesses, and commercial office space.

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Winning finance for business The issue: How can businesses best position themselves to attract private sector finance and investment in today’s economic climate, and what must be done to achieve this? This quarter’s BQ Live Debate, which locked financial and legal executives with company bosses, ended with participants each pledging to take a personal step towards helping North East businesses to access finance more easily. Here’s a synopsis of the discussion... Joe McLean: We all understand the economic backdrop in which we’re all working. Banks are lending but not as much as many would like because they’re being asked by too many businesses not wholly viable, and are not emerging from some experiences of distress. Banks are lending where a company shows a robust business plan demonstrating viability and good management. The Governor of the Bank of England in November told banks to prepare for things worsening because of the increasing risk of sovereign debt failure. There are banks owed by governments which are not going to be able to pay. The banks are being

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warned to get their capital ratios up. The day before there had been a debate about getting money into the economy. But the banks will have less to give out because they’re fearful of any sovereign debt failure. Andrew Mitchell: In past recessions many problems arose in the small business sector. Since 2008 people have seen the problem arising from investment banking. There’s a concept that small businesses are being punished. People see other profits announced, and high remunerations, and conclude banks are tightening only the belts of small businesses. There’s a mismatch of communication, a message that it’s business as usual and if you can’t get a loan it’s because you’re a bad business. That can’t be right, any more than that bad businesses given money five years ago were good businesses. Grahame Maddison: It’s generally known businesses aren’t as well structured now. Businesses that have a good business plan, are well managed, well structured and have assets can still get money. David Land: Finance people are risk-averse. You don’t want your money in any manufacturing that has a marginal element of doubt. Our whole business carries risk whatever we do; every day we walk in and something may break down. We may not be able to supply, creating a big financial burden. There’s a layer between us. How is that gap

Taking part Andrew Mitchell, chief executive, North East Finance Joe McLean, partner, Grant Thornton Angus Allan, partner, Clive Owen & Co Andrew Burton, managing director, Viking Fund Grahame Maddison, area commercial director, HSBC David Land, commercial director, Tallent Automotive Nicki Clark, chief operating officer, Business & Enterprise Group Lucy Tarleton, business development manager, London Stock Exchange John Flynn, executive partner, DWF Newcastle Alastair Waite, director, Onyx Group Bill Scott, chief executive, Wilton Group Nigel Williams, partner, Dickinson Dees Mark Simpson, group executive director, Nigel Wright Recruitment Brian Nicholls, editor, BQ Magazine In the chair: Caroline Theobald, BQ Live Venue: Rockliffe Hall Hotel, Darlington BQ is highly regarded as a leading independent commentator on business issues, many of which have a bearing on the current and future success of the region’s business economy. BQ Live is a series of informative debates designed to further contribute to the success and prosperity of our regional economy through the debate, discussion and feedback of a range of key business topics and issues.

bridged? It’s difficult. Our company has no problem getting money because we’re a global conglomerate, and absorb cash quite quickly. We’ve a six-year turnover of product and probably invest £10m or £15m yearly. But supply chain firms struggle. Where’s the commitment, the push, the incentive? Joe McLean: Isn’t the challenge about how businesses are to position themselves to attract capital? Businesses have to gear up, ready with a business plan that’s irresistible. David Land: I think we’re getting progressively better at doing the right things. We’ve never been busier over the past two or two-and-a-half years. I’m working six days a week – long may that continue. Alastair Waite: I have had no great problem with banks. We’ve a good business, good assets, contracts and revenue, and we’ve generally found it not difficult to raise funds. If you’re successful, funding finds you – and

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not only from banks. There are all the other types of funding. It’s getting the mix right. The challenge for many firms is understanding the stage of the development cycle their business is at, and what type of funding is therefore most appropriate for that stage. I just wish there was a decision tree to help businesses get through that myriad of where are you now, what business are you in, what are you looking to invest in, why do you need the money? You should be able to go onto something like Northeastfundingsupermarket.com and find the most appropriate funding, so you can go directly to the money and aren’t wasting time. Andrew Mitchell: People often think things are government-funded and the Government should provide a central access. Different people want different kinds of funds. If you’re a company involved in a £20m buyout the source of fund managers we have, or even the local bank, may not be the right people. There are private equity houses possibly in London, Leeds or Edinburgh, and I don’t know to what extent you can ever make it easy for knowing how to access money. A company clued up, will find it. Alastair Waite: A clearing house would be a start. I’ve come across a fund or two I didn’t know about. If we’re trying to help businesses along, having them appoint an adviser or consultant to spend a couple of hours explaining what they must do, and querying whether they’re actually ready to get funding, would help. Many don’t have a well developed plan. They waste time talking with people who were never going to invest in the first place. Andrew Mitchell: Barclays research has shown that historically in business start-ups about 70% were opportunity entrepreneurs, 30% were necessity entrepreneurs. Over the next three to five years the figures will reverse. The 70% will have lost their job, probably in the public sector, and are starting business not necessarily seeing an opportunity but because they’ve got to earn a living. They may be well educated, skilled and with specific knowledge. How does the region help some of those? They may be able to grow their lifestyle business into something that might develop. Alastair Waite: I’ve been involved with engineering companies that have had

problems not necessarily of their making. Their only place to go to is banks. But they didn’t want that type of business. Joe McLean: The region will have to distinguish between winners and losers. Everyone will say: “I’ve a right to have a business, I’ve a right to get capital.” They haven’t a right to capital if their business is flawed. Nicki Clark: I feel there’s plenty of supply out there. Is that true? Do you need to be more busy as business angels or whatever? Andrew Burton: There is money out there. But people look for money for different reasons. Bringing the two together has traditionally happened through banks. They’ve lent out customers’ money. I think the internet, social media and suchlike are putting power back with the money’s owners. You see funding circles and individuals in the US now making loans to business directly, from a web platform. So a direct investor can get up to 14% and all done in 36 hours. No lawyers, no accountants, no banks. I think there’s a future in this. It won’t affect banks in the next five or 10 years, but it’s going to take root. Grahame Maddison: You’re borrowing from a bank at 3 or 4% over base rate. A private investor will want maybe 25%. Andrew Mitchell: Investing normally now you get zero return on cash, zero from the stock exchange currently, and most unit trusts offer no value. Many investors think: “Where

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do we get a return?” We can’t all invest in gold. Grahame Maddison: Business Angels are different. They are prepared to take risks, unlike the average person using a bank. Andrew Burton: Many who have been in business themselves are prepared to take risks, understanding the nature of risk, and would rather control it themselves than put the money into a large pot paying 3% a year and handled by someone else. Mark Simpson: We had an interesting experience about 15 months ago. Previously we had no debt in the business at all. We’d come from recession beating the market significantly. Private equity firms did all they could to get their hands on us. Bank funding was the problem. All the results we had were positive, but there seemed to be a red light in London saying we were in the wrong sector. Despite all the positives, including the due diligence, we were still considered too high a risk for banks. A private equity firm came forward and we got the funding. Lucy Tarleton: The market has been volatile for two or three years and there has been a red light, but not necessarily because there’s one piece missing. Maybe the company hasn’t been as ready as it thought it was. Maybe it came to market at the wrong time, thinking the window was open and it would be ready by the time due diligence was done, but the market wasn’t necessarily ready for it to >>

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come forward because of the volatility. The stock exchange has seen it is difficult for SMEs to come to the AIM just now. We’re making companies aware an exit strategy could be an IPO of the future, and advising them to plan for long term growth, and work with alternative sources of funds such as business angels, VC funds and private equity firms – right across the whole spectrum – to get finance. Legal fees were mentioned as a factor in costs of joining the Alternative Investment Market. Nigel Williams: Everybody in the room charges for what they produce. Andrew Mitchell: I’m told the Entrepreneurs’ Forum hadn’t allowed accountants or lawyers to be members. I thought, if you were in London someone might say that lawyers and accountants are as big a generator of cash and capital as any manufacturing. If anyone thinks law or accountancy firms are necessarily bad, we’re probably a million miles from where we want to be. John Flynn: I agree with Nigel largely, but I think that at the bottom end of venture capital when a business wants financial input, and goes to a lawyer, the average lawyer can’t distinguish between a £10m deal and one of £100,000. They apply the same rules. Andrew Mitchell: On the AIM, is there any difference between a £2m and a £20m float in terms of what needs to be produced? Lucy Tarleton: The rules are the same, whatever a firm’s size. Costs probably won’t be the same. It’s difficult to give a precise figure on the costs of bringing a company to the AIM. The more money raised, the less the percentage. If you come to float on AIM or the main market, the cost of the IPO is a one-off. Once on the market, you must think of the benefits of being a public company, which will probably outweigh that one-off cost. Angus Allan: Many companies in the region have succeeded in raising venture capital. It’s about the right business getting investor ready, getting the fundamentals in place. Still too many people in the region work in a business rather than on it. Over 20 years past there have been so many quangos and other bodies around that nobody knew where to go. Andrew Burton: Entrepreneurs are opportunistic and optimistic. They’ll seek to

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drive an opportunity regardless of access to resources or capital. We’ve some very successful and largish companies in the region. All started as one, two, three or four person businesses. We’ve got to nourish the young companies that’ll become tomorrow’s large companies. When you start a business you don’t normally take a year off to learn about invoice accounting, performance bonds and all that. You start your business. Then a time comes when you realise you must learn about finance. You can’t expect to learn everything about finance without actually diving into the pool, so a problem will always exist. People will start a business without adequate capital, without adequate knowledge. That’s why we have a business advice community. There are people out there who potentially will be very successful. But they’re making poor decisions because they lack the experience. Andrew Mitchell: Who’d have predicted that Wilton or Onyx were winners 10, even five years ago? If you want to encourage people to try their entrepreneurial hand – perhaps we’re excluding corner shops, hairdressers, window cleaners etc – but if we want to start businesses that will go on to be notably successful, spotting is easy with hindsight. Bill Scott: When I started I was 26 and had a flat. I took my business plan to three banks. All three rejected, saying it was too positive... told me to go away and reduce my optimism. I went to the Yorkshire Bank. I had always thought of it as a penny bank. The manager said exactly the same but added: “You’ve got that glint in your eye. You really want to do this, don’t you?” I said Yes. He called in my wife and asked for our flat as security. That was the traditional bank manager. Nigel Williams: There aren’t as many MBOs or start-ups in this area as in some areas and I wonder if it’s because, for generations here, you left school at 16, served an apprenticeship then worked till you were 65 and retired. I think there are echoes of that. But in the last 10 years there have been more businesses and a friendlier business community. Bill Scott: If you have potential, an idea and are young enough, and if you can be identified early enough, you’ll be given opportunity. John Flynn: A hundred years ago you’d have gone to the local rich bloke and explained

properly to him. When the railways started on Tyneside it was agreed Gateshead would have to be bridged. At a meeting in Newcastle, everyone just chipped in. This summer, a girl who was getting £3,000 for something to do with digitising a book wanted to talk to me about a service agreement she was being asked to sign. People lending her the £3,000 wanted her to sign a 25-page service agreement. Why should she have to do that? Andrew Mitchell: Most money is lent or invested through the stock exchange and institutions. We need in this region 100 or 200 people who are prepared to lend and invest to a lot of entrepreneurs without the 20 pages or 50 pages. You can do it in two pages. In the old days lawyers would make a two-page document. We’re never going to get major capital funds in this region unless publicly financed. We’re never going to get banks lending to high growth, high tech companies with zero assets. If you want to do something in a region like this, far from London – places where an entrepreneur goes into a bar and three people listen to their story and offer fifty grand – how are we to do that here? Maybe we just don’t have a critical mass of wealthy people. Previously, when a good idea surfaced everyone looked to One North East for funding. As part of living in a healthy business community where businesses are growing and good for everybody, how do you gather together that informal need of advisory stuff

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I think your average person is intimidated by the mystique and black art of the finance world – the langauge, presentations, networks, clubs to make a difference? It still takes some doing to put money that would have gone to a unit trust now losing money into clubbing instead with other people, to see if it’s possible to lend money to local business – even where this guy could be the guy. Andrew Burton: People make the biggest difference in investment. The idea, great. Compelling marketing opportunities, fantastic. Strong intellectual property, even better. But money doesn’t move by itself. We’ve had presentations from companies where everything looked fantastic but the people didn’t have it. If you can sell your business opportunity to an investor, your track record to a mean-spirited business person and make him part with a cheque for fifty grand, you’ve got a start in life. Unfortunately in the banks’ credit scoring that counts for nothing. Andrew Mitchell: In Silicon Valley most of the best investments were made not by private equity funds but by entrepreneurs who put some of their own profits back into other businesses. Agents don’t make good

investment decisions; they make prudent investment decisions. We need people who can make intelligent investment decisions. How do we create informal networks? John Flynn: Bring a group of people together and you spread the investment risk. Joe McLean: In the agrarian and industrial revolutions that made Britain great, people not only ploughed back profits but formed capital unions, family circles – and we hear that phrase coming back about circles. There was then a largely uneducated class who wanted to better themselves. We’ve now had 250 years’ economic progress. We’ve also got millions of young people leaving schools and universities and in some cases unable to take their place in the workplace. They haven’t been educated properly. Nicki Clark: I think your average business is intimidated by the mystique and black art of the finance world – the language, presentations, networks, clubs. The average person who might be competent to run a business with a great future nevertheless finds

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it intimidating. They may have confidence individually and be well educated, but haven’t a clue how to talk to a business angel. They suspect clandestine rings. I think many people are realising they should stick to weathering the storm even before they think about growing. But they’ll have to look at different ways of financing. There’s money out there but it’s how to remove the mystique and the black art and make it just a regular process. Andrew Mitchell: It is a two way process. If you’re keen to invest in exciting young businesses you can’t just wait for envelopes through your door. You must go out, meet them, try to understand them. Too often venture capitalists have had thousands of business plans dropping through the door and it has been very much a buyer’s market. This is where informal local networks can come in. Perhaps investors could get closer to the businesses they want to invest in. I’m put off when anyone suggests they can’t find someone who makes an impressive presentation. Are they investing in a presentation? Nicki Clark: How much effort goes into taking money to a potential customer and presenting it in a way the customer can understand, and feel they can access and use it? Part of the key to removing intimidation lies with the investor and how they present themselves. Andrew Mitchell: Lots of people with 4% inflation can’t get any return on cash, either on the stock market or from most conventional investments. If you don’t want your money disappearing at 3 to 4% a year you’d better go out and find things that will give you a return. There aren’t many. But put it in a bank or a unit trust and you make yourself poorer by 2 or 3% a year. Andrew Burton: The wealth in this country is largely institutionalised – pension funds, pension schemes, bonds, trusts and offshore. We expect some sort of return and don’t necessarily bother with it ourselves. Look at economies now growing, with young populations – places like Turkey and Mexico. People getting wealthy there don’t put their money into institutional funds; they put them into business run by friends and family. Investors like these are entrepreneurial with their money. We’ve lost some of that here, >>

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as governments have recognised. So they give tax breaks. You’ve had the Enterprise Investment Scheme giving 20% tax relief. From this April you’re going to get 50% on the small amounts going in up to £100,000. I can put £100,000 into companies and suffer only a £25,000 loss if it all goes wrong. I’m

really only investing a quarter of the money myself. The rest is the Government’s loss. Andrew Mitchell: Most people don’t understand. They’d still give it to a money manager in London or put it into a hedge fund. They returned last year an average of -5%. If you want to throw your money down

Banking on new ways of accessing finance Grant Thornton is delighted to support the latest BQ live debate around accessing finance. As advisors to businesses across the region we know what challenges our clients are going through during these difficult conditions. The round table discussion concerned how businesses should position themselves in the light of the current well documented macroeconomic difficulties. Some delegates still felt that some Banks were not being as supportive as the community would like, but the majority were of the view that in the current climate no one should expect banks to lend to businesses other than those that demonstrated the following: • demand for their products • demonstrably viable businesses • sound business plans • strong management teams The group agreed that Banks had been criticised for lending too freely in recent years, and given that some of these Banks were now partially owned by the UK tax payer, the view was that Banks needed to guard their precious capital and lend only to businesses who were able to present irresistible business plans. Concern was expressed that UK Banks may still have to deal with the effects of possible sovereign debt failures in the future. Many Banks were owed significant sums by foreign governments and in the event of sovereign debt failure, those Banks would face further write offs, thus ensuring that there would be even less capital available for lending in the future. Against this gloomy background, businesses had to brace themselves for Banks becoming even less able to support businesses in the UK. Some of those present suggested that we take our cue from history, and from the experiences of the successful entrepreneurs in the last 200 years. These were often individuals who made great personal sacrifices in building businesses and then ploughing back into those business recently made profits, supported by loyal colleagues and employees who demonstrated a very deep rooted work ethic. Perhaps this may be the way forward in today’s difficult times. Individual shareholders may have to accept less in dividends from business ventures, and be prepared to sell some of their shareholdings (perhaps to private equity houses) for much needed capital to be invested into the business entities. As a result, there was a consensus that the old model of going to the Bank and asking for additional loans was perhaps being replaced (to a degree) by a new paradigm, involving individuals obtaining capital from friends, funding circles and perhaps by the use of the internet whereby investors may be put directly in touch with businesses seeking equity. What was clear from the debate and from our experience is that businesses do need to take a step back and consider whether there are different ways of working which will help a struggling business, before approaching the banks for finance. The days of just asking for more money without a robust plan are long gone, but business leaders who are able to adapt and change, reigniting the entrepreneurial spirit which made Britain great, will reap the rewards. Joe McLean, Partner, Grant Thornton

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the drain, give it to institutional managers. IFA financial advisers don’t get commission on private sector deals. Investing comes with 57 pages of FSA warnings and you must sign up to all sorts of things. When the government set up the FSA it put up a very fine mesh. On an investment of £100,000 people had to go through a whole bunch of hoops because someone had screwed £2m out of some widows about 20 years ago. The system now bucks against risk at every level. It was suggested up to 3,000 entrepreneurs in the region may have potential to create big businesses. Some need educating as to how to get money. Joe McLean: Every month the Bank of England allows banks to borrow by auction. European Central Bank does it on an even larger scale. In the last six months the ECB told banks in Europe they could borrow from them at extraordinarily low interest rates, to try to kick-start economies. For an option six weeks ago 420 banks in Europe all queued. They all borrowed and they’re being challenged by the authorities now to lend it. They’ve all kept the money, frightened to lend. They’re paying interest but not using it out of concern for their own capital position. Andrew Mitchell: This is unnerving to many people, this remoteness. They don’t understand how it works. There’s a big argument here for a return to localism. Would I feel safer investing in half-a-dozen smaller local companies? One might go bust, sure. But what are the other options now? You still have to be intelligent about tax breaks. But if you could develop a cadre of 200 to 400 people, all in this region, prepared to put some money into business, you could transform the picture. Joe McLean: I think it’s less a question of how should funders do more than of how should people wanting funding do more? Businesses must do more to wean themselves off debt, engage in profitable activity. If not, drill down to reasons why they’re not making as much profit, and change the whole mentality that says you have a hole in your cash flow and you want to borrow more money. If you’ve a hole in your cash flow you correct it rather than borrowing more. Angus Allan: It’s a lot about educating clients, ensuring they’ve a proper strategy, and the

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right people in place. Many business people don’t do it. Perhaps because they don’t know. Grahame Maddison: Negative press stops people approaching banks now. Every one of my managers, and probably the same for the other banks, runs with maybe 100 clients of £2m to £15m turnover business. Out of that 100 there may be 80 you’d readily lend to, maybe 20 not. We’re sending out letters to those 80 clients saying we’ve funds available. They don’t have to come straight in and borrow – they may not have need. David Land: A lot of small and medium suppliers are good at what they do, but how the business is structured they’re not there yet. Sometimes what you’re good at is not what you have to do to move your business on. Andrew Mitchell: A banker told me recently his bank has stripped out a lot of regional ability to tell good businesses from bad businesses. Things become subject to a

formula. Twenty sectors that might have been green light are suddenly red light. John Flynn: Go Ahead, an incredibly successful bus company, went into rail. They went to their bank and were told, to their horror, the bank didn’t “do” rail. They ended up with someone else and were flabbergasted. Andrew Mitchell: It’s guys in London who don’t do rail. David Land: How many today will invest in pubs? Andrew Mitchell: A few years ago, the easiest way to get money was to say you were in property. Now every Irish billionaire worth his salt is bankrupt. Equipping advisers to make good decisions is as important as making businesses ready for investment. Nicki Clark: When you approach a finance house you don’t feel like a customer. Often you don’t feel like a customer of your bank. You feel like you’re having to seek approvals.

Participants were asked to pledge personally one step to help businesses attract private sector finance and investment more easily. Answers were: Alastair Waite: Since many companies don’t know how to move to the next stage, he will try to help. Andrew Mitchell: Will put £500 into an advertisement for more people with spare cash to become business angels, investing in firms rather than have money lying in the bank. Nicki Clark: Her organisation runs meet-the-buyer events, and she hopes to extend these into the access to finance arena. Bill Scott: Will invest in an angel syndicate and seek to bridge the skills need. Andrew Burton: Will organise master classes coaching for growth, and seek local providers of access to finance. Master classes for investors too. Joe McLean: In the worsening situation will help businesses to fight insolvency, showing how to survive and prosper with renewed vigour. Mark Simpson: May be able to organise a forum through which managing directors of small and medium size businesses can talk to private investors and the private investment community. Angus Allan: Persuade more people to invest directly into companies. John Flynn: Will find out more about the Teesside angel syndicate and help put one in place perhaps further north. Lucy Tarleton: Will try to promote awareness of alternative funding sources ahead of IPO in reply to the many queries received from small and medium size businesses. Also try to get closer to the SMEs through the like of the Institute of Directors, the Confederation of British Industry and trade associations. David Land: Contact first and second tier suppliers to see if they have further potential, and try to help them forward. Grahame Maddison: Aims to have his team over the next few months become trusted business advisers rather than just bankers, so getting back to relationship banking. Nigel Williams: Will mentor for a year the first firm backed by the angel investment group Gabriel, being set up by businesswomen in the North East.

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Should there be a meeting of minds about acknowledging that the person seeking the investment is to some extent a customer, in which case effort has to go into educating that customer to make them ready, rather than expecting them to be the polished article? Andrew Burton: Until you’ve sold your company to me I’m not going to sell my investment to you. That’s how it works. Nicki Clark: In the current climate it’s not working. Not enough businesses are borrowing. You can still say No. But if it’s for the greater good for more businesses to be borrowing why can’t that rule change? Andrew Mitchell: I think it’s down to legality. You’re not a customer until I’ve agreed you’re signed up. I’m talking primarily as a business angel. It probably takes only three minutes to sell me the investment.. Mark Simpson: If you’ve a small business and want to grow, you need someone to help, perhaps a mentor. Organisations must spend to get the right people. There are many experienced people in the region who once ran good businesses but aren’t now asked to help. Attitudes must change. People must take advice. n

Positive outcome BQ brought together an excellent group of local business leaders, financiers, professional advisers and others in a superb setting, where we are able to discuss some of the most significant issues facing businesses in the North East today. I feel extremely positive that the outcomes of the meeting will result in some tangible practical solutions for SMEs, coupled with pledges of support and advice from the business leaders present. The discussion generated a great deal of enthusiasm from everyone present, and we have committed to maintain a momentum, to ensure that the both the north and south of this region continue to provide an excellent base in which to start and grow a business. Andrew Mitchell, chief executive, North East Finance

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A GOOD EYE, A GOOD BUSINESS

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ENTREPRENEUR

Michael Stephenson’s craftsmanship is in demand at the highest level. He tells Brian Nicholls how he achieved his business success without paper qualifications

What a morale boost it would be if Michael Stephenson’s inspiring feat in business could be told among some of the jobless young people presently eager for a career but lacking paper credits. Stephenson, a hands-on blue-jeaned boss who, at 48 looks nearer 30, wasn’t very academic at grammar school in Chester le Street, where he was born and raised. Good at art but not really interested otherwise. “A good eye is my forte,” he explains. Schooling over, he journeyed south because then, as now, too few jobs for young people could be found locally. He entered the hotel trade at Torquay then for three years on Jersey. He returned to the North East thinking: “What the hell am I going to do?” He says: “I started working as a salesman and found, ‘phew, I can do this’. Then I got into the rental market and bought a few properties. I’d got no inspiration for my present business by working in hotels. That sort of thing didn’t come until probably when I was 21. “You think then, ‘everyone’s got their niche but I haven’t got mine’. I took interest in architecture, found I had a good eye and could see why things were done the way they were, what values they had and what values were worth keeping.” Now he’s a talented and perceptive family business owner called upon by the affluent and noteworthy to put elegance, style and comfort into their homes. Herrington Gate Furniture at Rainton Bridge, between Sunderland and Durham City, is where growing numbers of people are turning to for a home to look like no other. Tom Maxfield, Sir Peter Vardy, Sir John Hall, and a rich line-up of professional footballers

I took interest in architecture, found I had a good eye and could see why things were done the way they were, what values they had and what values were worth keeping

the latest of whom, Alan Shearer, is currently commissioning his furniture layouts, have all been among them. And, of course, Tony and Cherie Blair whose patronage carried Stephenson into the headlines. It wasn’t the Blairs’ erstwhile home at Sedgefield that got the treatment. Nothing so modest. It was several rooms at 10 Downing Street while they occupied it; also their London home at Connaught Square and South Pavilion, their country home in Buckinghamshire. Downing Street was first. “That came through an interior designer in the North East,” Stephenson says. “It was when the Blairs first moved into Number 10. It was felt they could get some good quality from the North East at non-exorbitant prices. Our name had popped up in conversation, and about six months later we were fitting out the first couple of rooms. “We worked there in summer recess for a couple of years. I had to be there and took my entire workforce down at various times to fit out. I made sure we didn’t leave anyone out. Even the trainees went down – great experience for them.” So impressed, obviously, was Cherie Blair that when Stephenson’s new factory got up and running last summer she – openly praising Stephenson’s capabilities – volunteered to open it officially and did so gratis, which may surprise some sections of media which have recently portrayed the Blairs as money grabbers. Meticulous and Stephenson are words that fit comfortably together. The factory, distinctive to the industrial estate where it stands, is a paragon of good planning and good housekeeping. Entering it brings immediate delight through the sight of craftsmen in >>

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ENTREPRENEUR this age of mass production applying manual skills to wood. Yes, there’s machinery too – the best you can buy, Stephenson suggests – but craftsmanship is also essential in giving the firm’s work esoteric quality. This new factory took three years to build, not through reluctance to leave the previous building nearby, unheated and requiring the work to be done on four different levels. It was more Stephenson’s endless quest for perfection, here in the planning and fitting out of the building. It was designed and redesigned, with some touches included that had been employed for those luxury homes that bring in the business. And note the marriage of environment awareness and financial astuteness. Stephenson points out: “We installed a biomass boiler to burn all waste – no skips. It heats the building free for us too. No mess. No landfill. No fuel bills. You can save £12,000 a year on skips. That was the outlay in our old factory on a normal turnover.” Of the previous factory he recalls: “For five years we’d had it working 23 hours a day to keep up with demand. Our efficiency is much higher here. We also had to work much harder then to achieve good quality. Basically all our machines here are brand new, also the benches, hand tools, everything.” With that £2.5m investment, all told, the company will be able eventually to double capacity. “The whole thing adds up easily,” he affirms, especially as it includes an additional rental revenue from partly sub-letting. In the 17,000sq ft footprint of the building, only 8,000sq ft of ground floor is given to furniture manufacture. But a first floor of 6,000sq ft more takes the total area of Herrington Gate’s activity to 14,000sq ft. Belief is widespread that people who are well off feel the pressure less in hard times. That’s not Stephenson’s finding. The relocation, in light of events, didn’t come at the best time. “In fact, people say we expanded completely at the wrong time and probably we did,” he admits. “But there was no turning back. We project-managed this ourselves, so on the other hand our turnover during building and fitting out was likely to go down anyway. But last year we turned over 20% more than we

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Quest for perfection: Michael and Ashley Stephenson in their high-quality workplace ever did in our best year previously. This year we’ll break that record again.” Some £2m-plus is expected this year satisfying, surely, to a firm of 20 whose emphasis is on quality rather than quantity. More jobs are coming too. “About £1.3m worth of work is actually quoted for at the moment,” Stephenson says. “If it all goes ahead, as seems likely, we’ll need another four people at least.” One member of the workforce is retiring after serving more than 15 of the company’s 17 years. Normally, replacement would not be easy. “But just now we have a list of individuals who’ve had their eyes on us,” says Stephenson. “They want to come here because they see ours is a good business, and some companies they are with are going down.” All furniture and interior features the company designs and provides are bespoke. This hallmark dates back to his time in the property business. He explains: “I had built a small portfolio – about eight houses- and my most ambitious move was to buy Herrington Gate Lodge, a little two-up, two-down in its own grounds – the original lodge to Herrington Hall.

“I planned to double its size sympathetically then sell. After the building work we looked for quality fittings. We couldn’t find any. I took a drawing board out and started sketching some ideas. Back then, we were having them made by a company in Harrogate. Within a year we were manufacturing from a little garage ourselves. I had bought three machines – a little planer, a little saw and a little hand router. I employed an old-timer and we made our first two jobs. Within a couple of months we needed larger premises.” For all its demerits otherwise, the unit chosen did enable the firm, ahead of moving to Rainton Bridge, to grow four times bigger. The extended lodge was never sold. It is home today to Michael, his wife Ashley and their two children. A remarkable aspect of the business is its low-key marketing. You won’t find its product in any retail outlet. Many orders come by word of mouth and through interior designers in many parts of the country. The firm did bring out a 110-page brochure at the launch of the new factory, and copies are going out to the designers and many other targeted individuals. “You never know who you’re going to get a phone call from,” Stephenson says. Customers pay more for the Herrington >>

ENTREPRENEUR Gate effect in their homes because of its obvious quality and uniqueness. Stephenson works alongside his designers on the computer screens. Sometimes commissions come in a cluster, for as he explains, a place like Ponteland can be a serial provider. Residents there visit each other and admire. It compels the firm, however, to ensure that for fees to follow, each home will have an individual appearance. Customer input is encouraged since they have to feel comfortable with the outcome. Stephenson will visit them at home and they are equally welcome at the factory as plans are laid. Often they bring a photograph of something they fancy. Says Stephenson: “We’ll analyse it with them, and pick out the features they actually like,

It’s not just the furniture planned but everything. From walls to furniture to timber used, and stone on the ﬂoor to materials for the staircase – everything must blend successfully

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rather than just copy. We then design the furniture round their homes, their rooms, windows, doors and their own situations.” His own ideas are often sparked by magazine illustrations, but not the kitchen or bedroom magazines you might expect. “All that stuff is a little old-fashioned, a little old hat,” he says. “I tend to study fashion magazines. Usually the high profile fashion industry is the one for me to watch. People there tend to have no budgets to fret about. They spend a lot on their backdrops for the models, and some are really great. “Also we have some stunning new designs we found on Bond Street in London at Louis Vuitton, and Burberry. The Louis Vuitton store cost £30m to fit out. I imagine they must have had teams of fantastic designers, certainly a very famous architect I know of, Peter Marino. The result was stunning. I can take lots of inspiration from somewhere like that.” Modern is the style in demand. “With traditional, cycles tend to happen like any fashion,” he explains. “Traditional styles can be very overdone. You can buy that in the high street. The more cutting-edge, modern, up-to-the-minute ideas haven’t filtered down to the high street yet.” One-off pieces are a rarity – Stephenson’s gift lies in giving room design a makeover appropriate to the furniture there. Doesn’t this trample on an architect’s toes? Stephenson reasons: “We’re working on a house at Darras Hall which is literally just coming up out of the ground. So far in four days we’ve completely changed the position of all the walls, all the doors, the shape of the staircase, the shape of the landing. “Diagonal walls were originally planned. We’ve turned them into curved walls with curved doors and there are curved walls at the front of the house. This all follows the radius of the landing. Basically we’ve redesigned. The architect did ask important questions, but I instantly felt he warmed to the idea, and thought it might make his house look even better.” The potential value of work like that for Herrington Gate could be £300,000 to £400,000. Producing a kitchen like no other may bring in £200,000. Stephenson is anxious his company does not appear as being most

Keeping it in the family Herrington Gate may remain a family firm for many years. Stephenson’s wife Ashley already handles administration and many essential tasks besides. Son Milo, 15, would like to come into the business too eventually. Daughter Raine, 14, is showing talent, designing handbags in leather – a material less familiar to the company – and parental hopes are that she might one day be tempted into the drawing office. Stephenson is nursing the idea of a London showroom but meanwhile is tapping into a firm of London architects focused on houses in the £30m-plus bracket. Someone’s in for a treat.

expensive and stresses that value for money is always promised. Panelling above a chimney breast may move to unveil a television screen. Panelled ceilings may have to work symmetrically with panelling below it. Hallway floors may have tiled inlays. Black walnut may feature, along with rarer timbers such as zebrano and macassar. “It’s not just the furniture planned but everything,” Stephenson points out. “From walls to furniture to timber used, and stone on the floor to materials for the staircase – everything must blend successfully. I think our clients realise they can’t get ideas like this anywhere else.” A desk sure to make a statement about the managing director sitting at it may cost £12,000, so it’s understandable that commercial orders will tend to be restricted to his or her office, and the boardroom. But Herrington Gate’s artistry is evident also in hotels such as Wynyard Hall which, being “the most splendid 19th Century mansion in the country,” as Nikolaus Pevsner called it, had to be empathetic, and the Crab and Lobster at Asenby in North Yorkshire. Work may start soon also at an Edinburgh hotel. n

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COMPANY PROFILE

2011 was an important year for the region’s economy, Deloitte and Paul Feechan who took up the role of office senior partner in Newcastle.

DELOITTE LEADING BY EXAMPLE

asT year saw northern rock return to private ownership and a number of takeovers of prominent local businesses including northumbrian water, eaga and The Priory. business advisory firm Deloitte played an important role in each of these deals. in addition to a large audit and tax compliance portfolio, Deloitte is increasingly working with the region’s leading businesses in an advisory role. for Paul feechan, it’s a case of the firm leading by example. The company continues to grow despite the economic headwinds. “2011 was a great year for Deloitte’s newcastle office with our involvement in a series of major transactions, increasing our tax headcount by a quarter and the growth of our audit and advisory practice in the private and public sectors. our focus on building deep industry expertise has enabled us to make significant contributions to our clients in areas like manufacturing and consumer Products.” The challenging economy means firms are increasingly looking to Deloitte for other services: “both the public and private sectors are implementing cost reduction and restructuring initiatives and we’re working with companies to suggest improvements in areas like managing cashﬂow, tax and pensions. “access to finance remains a major concern for companies. The north east has done incredibly well from the first two rounds of the regional growth fund, but competition from other regions means there’s no guarantee that will continue. “Deloitte’s industry specialists can use their experience working with companies to help them access funding, to offer insight on how the banks view their industry and the wider trends in the sector which may impact their business. “some things never change, more than ever cash is still king and there are signs that companies are adapting to the post-lehman environment. There’s an increased emphasis on finance to

paul Feechan, ofﬁce senior partner

ACCESS TO FINANCE REMAINS A MAJOR CONCERN FOR COMPANIES. THE NORTH EAST HAS DONE INCREDIBLY WELL FROM THE FIRST TWO ROUNDS OF THE REGIONAL GROWTH FUND, BUT COMPETITION FROM OTHER REGIONS MEANS THERE’S NO GUARANTEE THAT WILL CONTINUE become more forward looking, requiring people who can analyse data and drive high quality information that can shape a business’s future direction.” The region’s exporters including the car industry and chemical sector are doing well. The chemical

sector on Teesside is benefiting from the rise in commodity prices. nissan is leading the charge into russia, while the local automotive supply chain is winning business from other manufacturers. however the north east economy remains heavily reliant on the public sector and is susceptible to spending reductions. approximately 60% of the region’s gDP is generated in the public sector and areas like construction are already feeling the impact from reduced infrastructure investment. but feechan believes the real potential for growth comes from entrepreneurs: “There is a significant population of private firms with turnover in the £15m - £100m+ range that have huge potential to grow. Deloitte is able to share its expertise in areas like finance, tax and investment appraisal to help companies overcome the barriers to growth. “with a declining number of listed companies and the threat of a shrinking public sector, private businesses will play an increasingly important role in the region’s economy and looking further ahead a number of new and dynamic businesses will go on to provide the region’s next cohort of plcs.”

If the North East economy is going to grow, these companies will need help and Deloitte has the depth and breadth of experience and expertise to help them prosper. paul Feechan can be contacted on 0191 261 4111

BUSINESS QUARTER | WINTER 12

BUSINESS LUNCH

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in association with

Let’s talk shop High street retailers can learn from Mary Portas-style advice, but they’d be much better off listening to the likes of Richard Rutherford, as Alastair Gilmour discovers

One of Newcastle’s most creative and progressive advertising agencies once relied on a rudimentary rule of thumb when hiring staff. A job wasn’t guaranteed even if a candidate arrived with a display book bursting with slick slogans and stylish graphics. Or if dressed

BUSINESS QUARTER | WINTER 12

raffishly, bristling with individual and eyecatching touches, from gold earrings down to roguish Chelsea boots. The big test was: “Could I go for a pizza with this person?” In that respect, Richard Rutherford, managing director of Rutherford & Co department store

in Morpeth, would get the job. He’d also qualify in a tie-break final through his fashion-dismissive sports jacket, gentleman’s slacks and “hail-fellow” charm. He’d enjoy a pizza too, but a glass or two of respectable wine, a main course of beautifully-prepared

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“comfort food”, then perhaps a damn fine dram would be more his kettle of fish. Of course, Rutherford doesn’t need a job. He’s got the top one in the family firm (but by his own admission, “disappears” from his leading role at the 166-year-old Bridge Street premises as often as he can). He could certainly show any boss in any sector how to get results. Rutherford & Co of Morpeth occupies the same spot as in 1846 when founded as a draper’s and milliner’s. Much sideways elbowing has followed, and fashions in everything have evolved enormously. But it still thrives on a blend of quality, tradition and family values. And, there are plans to expand at the slightest glimmer of upturn in the economy. The opening of the swanky, £32m Sanderson Arcade across the road just over two years ago might have been taken as a huge competition alert. But Richard Rutherford was quoted at the time as saying his store’s takings had gone up 10%. “When the first proposal came for the arcade I wrote to the council saying it was too big and Morpeth couldn’t stand something of that size,” he says over lunch at Barluga Deli, a restaurant taking up a fair old space in the chi-chi development. “The next developer, Mark Dransfield of Dransfield Properties, came and asked me what size it should be and what we needed to put Morpeth on the map. He was superb to work with. You can’t do without competition, fair competition is great, and if I’ve got 10% of the competition I’ll be doing fine.” Rutherford has turned 60, a milestone his

BUSINESS LUNCH

three daughters – not involved in the family business – delight in teasing him over. He admits to “feeling 40” but pacing himself better. He is an animated and energetic lunch companion, emerging as an individual (in the literary sense) with deep-seated honesty. Perhaps he calls a spade a spade at times when it would be better to say “digging implement” – or nothing at all.

Mary Portas: Understanding High Street Performance Main recommendations: • Improve management of high streets with new “town teams” • Affordable town centre car parking • “Town centre first” approach to planning • Disincentives for landlords who leave shops empty • Greater inclusion of the high street in neighbourhood planning.

“You don’t stop, things don’t stop,” he says. “By the way, this pasta is probably the best I’ve ever had. “You’re running a business, particularly during this year when everybody says things are going to be worse than ever, and we’ve made plans for opening three new departments. You never stand still. We’re looking at a new menswear department and even though you have to batten down and keep things tight,

you have to go on. If things go wrong you’ve got to keep moving, you’ve got to keep evolving. You’ve got to keep changing – customers expect that, they expect to see change.” All this time he has been up and down from the table, shaking hands with customers he recognises, having a word with staff (from across the road) and enquiring after the health of old friends. It’s his first time in Barluga Deli, but already he feels comfortable. “It shows where Morpeth is going as a town; just what we needed,” he says. “Morpeth is becoming quite cosmopolitan. “The town went through 10 years or so of bad times when half the shops were boarded up. But you keep going and do your best and you survive. Now we’ve got people telling us it’s totally different, it’s vibrant. It shows what can be done in a small market town. It’s through vision and lots of hard work, and down to people like Dransfield who are prepared to invest. “A lot of people come to Rutherfords because they know they’ll find something different – fashions are different, gifts are different, home furnishings are different.” Isn’t that one of the conclusions reached recently by Mary Portas – TV’s Mary Queen of Shops – after being commissioned by David Cameron to diagnose what’s wrong with our high streets? Her recommendations include free parking, national market days, relaxed licensing rules for traders and restrictions on night-time deliveries. “I could have written that report – she’s told us nothing new,” says Rutherford. “What >>

BUSINESS QUARTER |WINTER 12

BUSINESS LUNCH

People think because you’re a family business it’s easy, you just walk in. You’re always underfunded, so it’s not a cushy number she’s trying to do you cannot make work because you cannot dictate to councils that you want free parking. You can’t ask them to reduce rates. They won’t do it. “I’m not knocking her, and it’s good the Government thinks retailing and the high street needs looking at. She has said how she can help the high street and that’s fine. But what would help me is if someone gave me a million pounds tomorrow – and that’s not going to happen. “She said the high street needs all these things – but putting it all together is more difficult. Give us dualling for the A1 instead of a new train line that won’t be ready for another 20

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years and only goes to Birmingham. “In Morpeth we’ve now got a good mix of local independents and national chains with more coming in – and more restaurants – and it’s good for a company like this (the Newcastle-based Fluid Group which operates Barluga Deli) to come here and see what’s going on.” There was no pressure on the young Richard Rutherford to succeed his father at the helm of the family business. Yet it seemed inevitable after studying economics in Edinburgh, then on to a management training scheme in Jenners department store there – the Harrods of Scotland – despite his hankering after a life in the Army. “It was never accepted I’d automatically come in,” he says. “It was discussed at times but eventually my father needed to know. People think because you’re a family business it’s easy – you just walk in. Really you’re just a custodian and I think you’re expected to fail. “To keep a family business going you need a lot of shareholders and you’re always underfunded, so it’s not a cushy number. You inherit everything but just get on with it; it’s your life and soul. I’m fifth-generation. I brought Jenners’ values and methods to Rutherfords. You’ve got to have high standards. “I had a very close relationship with my father.

From day one he said, ‘Right, you’re not going to be put in the position I was when your grandfather died. You’re going to work with me from now.’ “He took me through everything so that when he was about 62 he said, ‘Get my pension sorted for when I’m 65’. And he walked out and never came back – apart from coming in and having a cup of coffee with me. “When he died at 74 it was a great shame because he was a great friend. We fished together – he liked trout fishing and I liked salmon. We never talked about work then. A great chap, a gentleman, a good businessman, and one of my best mates. My grandfather had left the business when he took ill. My father was running the carpet department then had to run the whole thing.” Away from fishing, Richard Rutherford’s great passion over the last 15 years has been horse racing. He owns a string of racehorses which are in training with Brian Ellison in Yorkshire and in Fife with Lucinda Russell, Scotland’s champion trainer. He reasons that’s what running a family business is about – “I can do what I like” – though, rather than appearing cavalier, he quickly praises the others running the store, and acknowledges his reliance on their formidable abilities. “I’ve got good people who I can leave in charge. Our company secretary has been >>

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BUSINESS LUNCH with us 48 years – he’s Mister Reliable – and there’s my wife whose knowledge of design is fantastic, also my sister who does all the staffing and what have you. We have 75 staff; we’re a big local employer. “I said to my wife 22 years ago, ‘Why don’t you come in and do our buying?’ It’s not teaching people how to buy that’s the problem – it’s teaching people what to buy and she’s got so much flair. So much so that because of her, our house has had five pages in House & Gardens and we’ve just had photographs taken for Country Living magazine.” He seldom goes out for lunch. “I go down into our coffee shop,” he explains, “and I work there for a couple of hours. It gives me a chance to talk to our customers when they’re relaxed. They’ll tell you what you’re doing right or wrong, and you can’t stop them on the shop floor to do that. I’m a great one for people. It’s my way of keeping in touch. “We call ourselves a lifestyle store. We’ve looked at our competition and thought, ‘What can we do better than them?’ And we’re small, so when we make a decision we can change things immediately. We try and do things that are different – that’s why people travel to us. We’ve a following from Edinburgh to Durham and we have customers in Essex and Exeter.” At one time Rutherford & Co had a store in Newbiggin on the Northumberland coast and another further along Bridge Street in Morpeth. Does the town’s recent renaissance as a retail and leisure destination merit another go at off-site expansion? Rutherford is pragmatic. “Yes, I could get another store and have more hassle and more debt,” he says. “People might say, ‘Oh my God, he’s not progressing’, but we’re very comfortable as it is. This is my third recession and it’s the longest and deepest yet. I’d be lying if I said life was fantastic. We’ve got control pretty much over what’s going on, but the next year does worry me a bit. “I told the bank manager – business relationship manager as it is now – the figure I thought we’d end up with at the end of January. His view was, ‘If you’d seen those figures a year ago you’d have been happy with them, wouldn’t you?’. I said yes so that’s probably right.

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“If anybody asked me for business advice it would be, ‘Never hide anything from your bank manager, warts and all.’ We’ve always been totally honest – good times, bad times. Whatever happens, there’s got to be trust.” Now, if confirmation of that trust, honesty and optimism were needed, it comes from Simon Pringle of Morpeth Lions. The organisation, alongside Morpeth Rotary Club, was heavily

involved in Morpeth’s clear-up following the floods of 2008 and borrowed a Rutherford & Co van for a time to lug loads around. “Richard Rutherford’s vehicle has an amazing feature,” Pringle wrote on the daily progress blog. “Regardless of how much fuel has been used, the tank is always full the next day.” Richard Rutherford is not only a tank-full individual, he’s a pizza man. n

Something different: Barluga Deli Barluga Deli’s grey and mushroom attire sets a mood – sophisticated and suave – without draining the pocket. Décor-wise, light bulbs sit inside bell jars; dark-coloured furniture contrasts with white porcelain wall-tiling, and a display of glass storage jars containing everything from sliced apple and pasta shells to cinnamon sticks and red chillies greets visitors at the head of the stairs. The deli counter chill cabinet is filled with sweet-tooth favourites. Head chef Andrew Laurie says the pasta starter Richard Rutherford thought “the best” is a recipe he has used for years. “It’s garnished with garlic chives, which works very well as it doesn’t make it as strong as using garlic itself,” he says. “We’re very happy the way things have gone since we opened in November. December was jumping here. Sharing platters are very popular. Everything is made in our kitchen – except the ice-cream. But our own ice-cream machine is on order.” We both chose meatloaf for our “comfort food” main course. “My mother used to make this,” said Richard. “My wife makes this,” I replied. The meatloaf – whose consistency suggested the meat was minced at least twice – came atop mashed potato with a surround of finely shredded cabbage. “This cabbage is superb,” said Richard – or was that me? Two starters, two mains, two – large – glasses of Pinot Grigio and a bottle of Vedett beer came to a very canny £35. Barluga Deli, Sanderson Arcade, Morpeth NE61 1NS. Tel: 01670 505000. www.barlugadeli.co.uk

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Official fuel consumption figures for the Audi A6 range in mpg (l/100km): Urban 26.2 (10.8) - 48.7 (5.8), Extra Urban 42.8 (6.6) - 64.2 (4.4), Combined 34.4 (8.2) - 57.6 (4.9). CO2 emissions 190 - 129 g/km.

PEARSON ON WINE

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Just A Minute – Chilean Everyday Wines in 60 seconds or 600 words. Steve Pearson, executive chairman of Pearson-Harper Ltd, samples two without hesitation, deviation or repetition. Well, almost

In the radio programme Just A Minute, as most readers will be aware, contestants are required to talk for one minute without hesitation, deviation or repetition on any subject given to them by the octogenarian chairman Nicholas Parsons (I digress a little at this point just to marvel at the fact that, although I knew he was in his 80s, I didn’t imagine for just a minute that he is actually 89 this year!). Anyway, to continue with the idea of talking on any subject for 60 seconds, that’s a bit like me being asked to write 600 words on a couple of wines. Don’t get me wrong, I’m not a complete novice – in fact I pride myself on having developed a keen, mean nose and palate in recent years, used to very good effect in competitive wine tastings (ask my wife or PA). However, neither am I one of that select bunch of erudite wine writers like Hugh Johnson, Jancis Robinson or Andrew Jefford – all of whom could fill 60 seconds or 600 words on any wine without a problem. But I’m nothing, if not willing and, who knows, with my quick wit and cutting satirical edge, I could

BUSINESS QUARTER | WINTER 12

be the North East’s next Paul Merton. The wines selected for this month’s feature hail from Chile – a red blending Cabernet Sauvignon and Carmenère and a white made exclusively from Chardonnay. Now to be honest, I tend to approach Chilean wines without any great sense of anticipation and excitement. Undoubtedly, Chile is responsible for producing some stunning wines to match the very best (reference the historical tasting in Paris when Vinedo Chadwick 2000 from Errazuriz outshone the luminaries of Bordeaux and Tuscany), but their reputation is built largely on providers of reliable house wines with easy drinking attributes. My personal preferences are for wines that reflect their origin and which show character, both in the making and the drinking, and I’m not usually content with a fruity red or a crisp white. Let’s see how these wines from El Campesino stack up. Both are made by Errazuriz Ovalle (not sure of the connection, if any, with

Errazuriz previously mentioned) from grapes grown on their own vineyards, covering 2,500 hectares in the premium Colchagua and Curico valleys. Grapes for the red, (Cabernet Sauvignon/Carmenère), are sourced from Colchagua, and Curico is the source of the Chardonnay. Now to the interesting bit, tasting the stuff, but first let’s do a bit of scene-setting – I always think time and place play a big part in determining reaction to a wine and as with any well conducted experiment, conditions need to be specified. On this occasion we are talking about a dark, damp Friday evening; wind whistling and rain lashing outside but warm and cosy inside, seated around a solid oak table in the kitchen with some tasty oven-cooked tapas playing a supporting role. Starting with the Chardonnay – clear and bright in the glass with glints of gold and a restrained nose that reveals just a hint of citrus. Well balanced, very fresh on the palate with a real zingy quality that could be felt on the tip of the tongue. The red was also clear in the glass, neither too dark nor too light – what you might call a mid-red sort of colour. The nose has some interesting leafy and menthol character with blackcurrant fruits popping through. The fruits came through on the palate, tannins were light and it was an all-round pleasing wine. Like me, these were wines of good, upstanding character that would hold their own at parties (also like me) or accompanying, as we did, light tapas-style dishes. ■ White is an El Campesino Chardonnay £8.00 and Red a El Campesino Cabernet Sauvignon Carmenere £8.00, both 2010. Wines were kindly supplied by The Wine Boutique at 14 Narrowgate, Alnwick NE66 1JG, and Heighley Gate. Tel: 01665 6006304.

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MOTORING

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cruiser bruiser BUSINESS QUARTER | WINTER 12

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MOTORING

Craig Iley, regional director, North East, Santander Corporate Banking, gives the BMW X6 a rigorous weekend going-over There is an old joke about what happens to a man who meets a good-looking woman in a leather dress. “Have you ever wondered why his eyes dilate, he breathes more deeply and his heart beats faster?... it’s because she smells like a new car.” Perhaps it’s not that funny but there is something special about getting a new set of wheels, even if it is only for the weekend. When it’s a real bruiser like a four-litre BMW X6 you know immediately that it’s going to be fun. This is a car that wants to make a statement. Its imposing size, striking looks and contrasting colours of white with huge, black alloys hit you square in the face. It’s always going to be a conversation piece and one which is likely to divide opinion quite sharply. You are unlikely to get a middle-of-the-road reaction (no pun intended) and so it proved at home. For my 15-year-old son, it was love at first sight. Dad was now officially cool, ferrying him and his mates to five-a-side football. Dad was now first choice taxi service and mum was relegated to second place. My altogether more studious 18-year-old daughter, on the other hand took one look at it and rolled her eyes. The subsequent entries on her Facebook page, whilst amusing, painted Dad in an altogether different light. On a more serious note, I am a big fan of German cars. With excellent build quality you know the reliability will be bullet-proof. In the unlikely event of a problem, the high quality dealer network will sort it out with typical Teutonic efficiency and the X6 certainly gives you that reassurance. The cabin feels spacious and luxurious with acres of white leather, all stitched together beautifully, and everything that opens or closes does so with a reassuring “clunk”. It feels very solid and well put together. It’s also very well equipped with an array of technology including the latest sat nav, Bluetooth and iPod

connectivity all easily accessed via the iDrive system. Despite never having owned a BMW, I found the system is so easy to use that I felt totally at ease with it inside 10 minutes. So what’s it like to drive? Initially, because of the height, the ride felt a little unsettled but I quickly realised that this feeling was just a product of being used to a lower driving position and a firmer ride, so it took a little while to adapt. As you would expect, the four-litre diesel is silky smooth with more than enough power available in any situation and the wide tyres help put that power on the road in an even fashion. Even so, I was still surprised by the >>

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What Bob says...

Country casual: Craig Iley was impressed by the four-litre BMW X6, even on minor roads amount of torque, and you can feel the back end twitch on a greasy surface if you put your foot down too quickly as the 300-plus horsepower tries to get from the engine to the road surface. The eight-speed automatic gearbox is smooth and adaptable when your driving changes but you also have the option of the manual shift. Whilst I generally prefer a manual, the auto box is so good that after the first few miles the manual options seemed totally surplus to requirements. The combination of power, smooth gearbox and good power distribution make the X6 a very relaxed cruiser and the motorway is where it will be most at home. But where’s the fun in that? I couldn’t resist a spell on the back roads of the North Yorks Moors. Although most people would be highly unlikely to go off road in this car, I tried the

automatic hill descent system which worked admirably. You get the impression that it would perform sensible off-road tasks if it has to, but personally I would stick to the Tarmac. At first glance the car seems huge so I was a bit wary about the tight bends and narrower country roads but it was sure-footed at every turn and it was a doddle. In fact it was just as relaxing as the motorway cruising and this is the first clue as to just how much impact the styling makes. This really hits home when you try to park it. It looks fine from the inside but when you get out it’s all gone pear-shaped. Strangely this is a real positive. The combination of the chunky looks and poor visibility out of the rear window are deceiving and you begin to realise that it’s not as big as you think. The large mirrors and parking sensors, front and rear, soon help you get a feel for where the edges are and you start to trust your judgement more. This is a lovely car to drive with all the comforts you are ever likely to need but you will need a healthy disposable income to run the four-litre version. Verdict: Big boy’s toy, great fun. Oh dear, I forgot to count the cup holders. n BMW X6 xDrive 4.0D, Lloyd Newcastle BMW, www.lloydnewcastlebmw.co.uk OTR £48,800.00 The Car Craig Iley drove cost £56,400.00

BUSINESS QUARTER | WINTER 12

The BMW X6 was launched back in 2008 and is based on the X5 but with a more of a sporty coupé look. The X6 is slightly longer and wider than the X5 but it only seats four adults. In April 2011, BMW introduced the option of a third rear seat. It has all of the attributes of an SUV with high ground clearance, all weather ability and permanent four-wheel drive. The X6 opened up a whole new market for BMW and the Sports Activity Coupé was born. In three years they have sold over 100,000 units. Both Audi and Mercedes are both planning to introduce models to compete with the X6. You would expect it to be made in Germany but it is actually built alongside the X5 in South Carolina in the US. The car is available in either two petrol or two diesel engines. In 2009, BMW introduced the X6M and this car appealed to owners wanting a sporty SUV with sports car performance and handling. As you may expect, the diesel accounts for over 90% of sales. The 4.0lt diesel engine is actually a 3.0lt diesel engine with two turbos. The additional turbo gives the engine much-needed extra power. The car has 301bhp and it gets to 60mph in 6.3 seconds and its top speed is 147mph. Considering the car has more power than the base 3.0lt diesel engine, it also emits less Co2. This engine really transforms the car and makes it feel more like a petrol engine rather than a diesel. The real trump card is its handling, as it loves to be thrown into corners and even on wet roads it feels glued to the surface. The X6 not only feels sporty but with its unusual styling it also looks the part, too. Bob Arora is an independent car reviewer and also owns Sachins restaurant on Forth Banks, Newcastle. kulmeeta@hotmail.com

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FASHION

WINTER 12

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UTILITY IS SO COOL We may not have just conquered the Eiger but we want to appear as if we have – while still looking good on the train, as Josh Sims reports “Look at the way water breaks on it into beads and runs off,” says Donrad Duncan. “That’s an example of how nature provides ideas that we try to emulate. It requires a lot of research and development.” Duncan, however, is no fruiterer but the designer of a new Italian clothing company called Ma.Strum. “Most industries apply the latest technologies wherever they can, but that’s much less so in the clothing business,” he says. “The object of clothing design needs to be much more about

BUSINESS QUARTER | WINTER 12

benefitting the user – and I say user rather than customer.” The approach is, however, catching on. Ma. Strum is, of course, not the first brand to look at fashion with a more functional approach – clothing as tool rather than trend. Ma.Strum itself is co-created with the Massimo Osti Studio in Italy, revered among menswear aficionados for its pioneering fabric technologies and creating the Stone Island brand. Duncan’s previous job was designing advanced clothing for Swiss Army knife-maker

Victorinox, which is moving increasingly into the lifestyle market. Indeed, such is the demand for smart clothing – in the sense of utilitarian design as much as style – that it is increasingly seeing the same market open up for its originators; those brands that have long developed it for specialist use, but which have found customers keen to wear the kit as much to the mall as the moors. According to Paul Anderton, European merchandising manager for Patagonia – previously of Saloman and Berghaus – in large, part of the new appeal

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FASHION

There is no question that the market is developing an appreciation that a technical garment should look as good as it possibly can

of such specialist clothing lies in the greater awareness of, and demand for, durability and utility which has been fostered by the recession. “When they have less money to spend people look for clothes that are especially versatile in all situations and are prepared to invest in those that are durable, waterproof, breathable, that have the right pockets and fastenings and so on, rather than pay less for something that just looks like it might have that functionality,” he says. A more educated consumer – aware as much about cloth and construction as brands, thanks in large part to access to information via the internet – has helped fuel interest too. And a breakdown in dress codes that has seen less

and less need for formality in the nine-to-five working world have also encouraged the transition of technical clothing from its intended purpose to tackling the trials of more everyday life. The specialist brands have certainly preempted this demand too – by providing styles, most notably in outerwear, that look the part as much in an urban environment as in the traditionally day-glo world of outdoor sports. Anderton notes that supreme utility is not enough if the garment looks unappealing, especially for women, for whom colour, silhouette and the right details remain just as important. And according to Tim Jasper, brand director of Rohan: “There has been a demand for those

items of clothing in particular that move away from that highly functional aesthetic that specialist clothing has traditionally had and towards retaining that functionality in more wearable styles. That can be a problem for the guy who wants to look as though he has just come down off the Eiger, but it works much better for the guy who wants to do that and then not look too out of place waiting for a train.” Rohan, which has seen business expand to encompass 60 own-brand stores nationally, has consequently introduced the likes of fleeces that look more like conventional knitwear and general use, deconstructed blazer-type jackets that also happen to be abrasion-resistant, crease-resistant, breathable and machine-washable. And, Jasper notes enthusiastically, with zips on the pockets. The demand for clothing that has as much panache as practicality has spread across sports too. As across the dale, up a mountain or on the snow, so too at sea. If fashion brands have developed their own specialist clothing for sailing over recent years – >>

BUSINESS QUARTER |WINTER 12

FASHION

WINTER 12

The technical jacket says you’re healthy, active, practical, but also suggests a certain old-fashioned manliness that is big in fashion right now

Prada, for example, has its Luna Rossa line, already with annual sales of more than E20m, while Italian luxury textiles company Loro Piana has recently launched its Regatta clothing collection to celebrate its Superyacht Regatta competition – so specialist sailing brands are becoming more aware that their clothes are not just being worn on deck. “Marine brands have to be careful not to dilute their perception in the rather insular marine market, but there is no question that the market is developing an appreciation that a technical garment should look as good as it possibly can,” says Matt Gill, product development manager for the Gill brand. “Now consumers don’t just want bright red, yellow or navy, for example. Up until just a few years ago you would never see classic black. It might be low-visibility in the water but it looks good and has seen real demand.” Nor is Gill Clothing alone in pursuing more pleasing aesthetics to their specialised clothing. Norwegian brand Helly Hansen has sought to blur the fashion/function boundary with its new Ask advanced sportswear line. Henri Lloyd has teamed up with Japanese fabric and chemical manufacturer Teijin to

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launch Blue Eco, sailing’s first fully recyclable, waterproof/breathable collection. But while recessionary pressures, practical lifestyles and changes to the design approach by manufacturers may all be important in shaping this growing cross-over market, none of that touches on one of utilitarian clothing’s biggest draws – image – and especially so for men. The clothing might suggest an outdoorsy life rarely actually lived – “the technical jacket says you’re healthy, active, practical,” as Anderon puts it – but it also suggests a certain old-fashioned manliness that is big in fashion right now. A trend for workwear-oriented style – backpacks, heavy boots, chunky knitwear – has seen technical outerwear embraced

in particular, especially any in line with the growing appreciation for so-called heritage brands. “And this rugged aesthetic not only suits the times, but its comfort and practicality means it’s likely to last much longer than most trends,” says Alastair Rae, co-founder of British menswear brand Albam, which has launched a line of parkas made from Ventile, one of the original, WW2-era technical fabrics. “It may be fashionable but in a way this is a new appreciation for clothing that is beyond fashion, clothing that is made to be fit for purpose.” n All images courtesy Ma.Strum. http://mastrum.com

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GREEN WATCH ON DUTY Some manufacturers like their timepieces to shout ‘style’ at every movement of the wrist – others take the understated approach and are all the more highly regarded for it, writes Josh Sims

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That IWC’s new collection is called Top Gun may be a somewhat tongue-in-cheek name for five new pilots’ watches, but that they are pilots’ watches will be enough to get fans of the brand all a-fluster. That’s because IWC might well lay claim to being makers of the definitive pilots’ watches – outsized, offering maximum legibility, supremely reliable to allow use for navigation – since the 1940s. Only, these new Miramar models now come with grey ceramic cases, matte anthracite dials and textile straps. They are about as stripped down, utilitarian and unshowy watches as the market currently offers. “But IWC has always been apart from that (fashion) world; we have a provincial touch,” the company’s CEO Georges Kern has suggested. “We’re not Paris, Milano or New York. We make no-nonsense watches and try to represent solid values. Certainly the industry has seen excessive watch designs and blingy watch brands

and they are now looking very dated...” Indeed, IWC’s long history is partly that of the outsider, such that it may be able to make a somewhat surprising claim to be an American or Italian brand, rather than a Swiss one. It was the unlikely named Florentine Ariosto Jones, living in Boston, who was convinced that he could do a better job than that offered by the then fledgling but progressive American watch industry, launching his own company 144 years ago this year. Jones, in fact, had never been to Switzerland – but he did know about their manufacturing techniques, using old machines and cheap labour. His idea for a competitive advantage was simple – employ the same workers but use advanced machinery to make a more advanced product for sale across the US and, later, Europe. From the start, the scale of the operation lent itself naturally to the new company’s grandiose name: International Watch Company. But not everyone was ready for >>

Those who might regard luxury goods as divorced from concerns for the wider world may care to know that, although, like its understated watches, this understated brand does not shout about it

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Jones: many of the cottage industry watchmakers in Switzerland regarded his newfangled equipment as a threat rather than an opportunity. Certainly Jones was ready to embrace anything that suggested it may be the world of tomorrow – the European business was saved, and enhanced, by the industrialist Heinrich Moser who made a deal that allowed Jones to make use of Moser’s factories in the small town of Schaffhausen, a name now emblazoned across the dial of many IWC pieces (though if you ever discover one that reads “New York” instead, as very early pieces did, you may have just found your retirement fund). But what Moser was really offering was, for 1868, altogether more exciting than work space – electricity. Moser had his own hydrostation. Jones, as it turned out, did not stay in the watch industry for long, selling his business to Swiss interests and returning to the US. Yet he left an indelible legacy – modern watch manufacturing. Fittingly, in recent years IWC has opened a watch museum dedicated to documenting its efforts in this field; it can count among its ground-breaking moments the first anti-magnetic watches, the first made from ceramic and also from titanium, and the first mechanical depth-gauge. As its former creative director Guy Bove (now designer for Chopard) once noted, “we might not make the hottest watches in fashion, but then we do make watches their owners will still be wearing in decades to come.” Certainly, in watch circles IWC is also recognised as having in its portfolio what most companies in the industry can only long for – a flagship design beloved of connoisseurs and collectors. And it’s not even the Mark series of pilot’s watches with which it is perhaps widely associated, though it does date to the wartime era. When, in 1939, two watch importers in Lisbon asked IWC to produce two special models in celebration of Portugal’s seafaring heritage – think Vasco da Gama, Fernando Magellan and Bartolomeu Dias – the result was more than expected. First, the styles were oversized timepieces with pocket-watch movements in the spirit of navigational instruments, and a radical departure for watch design of the time.

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Secondly, it promoted a new category of watch – capable of withstanding the extreme conditions often found at sea. Thirdly, and most importantly for land-lubbers, it gave birth to IWC’s Portuguese line, recently updated and relaunched to include a hand-wound and a Grand Compllication with a minute repeater – a grandfather clock for your wrist. Not that IWC is one of those 21st Century companies coasting on a 20th Century archive, with its modern watch-making comes modern business. Those who might regard luxury goods as divorced from concerns for the wider world may care to know that, although, like its understated watches, this understated brand does not shout about it, IWC is also the only premium watch company to be carbon neutral. Not for them its name emblazoned over a yacht or some Hollywoodtype paid to wear its watches, rather the company has, for instance, maintained a long-term relationship with the likes of the Cousteau Foundation – promoting its work through celebratory watch launches and a percentage of sales as a charitable donation – and eco-explorer David de Rothschild’s Adventure Ecology organisation. The company is the first to admit its soft environmentalism gives the brand a competitive advantage; that it is a marketable point of differentiation. But its behind-thescenes activities are as green as those that public-facing – the company subsidises employees’ public transport costs, for instance; pays them to drive a car with reduced emissions; supports them in the greening of their homes. “We’re a business and we still have to deliver – but we can do so in a meaningful way,” Kern has stressed. “We can’t be beholden to a corporate way of thinking that is always about cost, cost, cost. And I think companies, be they in the watch industry or not, that don’t invest in something of social worth are going to face problems.” Corporate responsibility may be appropriate for a business whose headquarters now stands on the site of a former monastery. But it is even more appropriate for a one that set out to be at the forefront of its industry and, in both new ways and old, remains a leader – and not just in the air. n

We might not make the hottest watches in fashion, but then we do make watches their owners will still be wearing in decades to come

BUSINESS QUARTER |WINTER 12

BUSINESS QUARTER | WINTER 12

WINTER 12

ENTREPRENEUR

GOING FOR IT Sir Peter Vardy, chairman of the Vardy Group of Companies, talks to BQ about today’s opportunities and rewards for young entrepreneurs and apprentices, and about philanthropy’s place in an organisation. Brian Nicholls puts the questions Do you think it’s harder for young people of initiative to launch a business than it was in your day? In my day it was all about coal, ships, steel and big investment to get started. Now, with the multitude of opportunities there are with internet and other types of business, there are far more alternatives to get involved in and established with. You don’t need as much cash to get started. That must offer a big opportunity for younger folk these days. What are the drawbacks for them now? There was a lot of help with Business Link and all the other agencies that were about until the economic cutback and the ending soon of One North East. Cash is obviously an issue, and when banks aren’t as forthcoming as you’d like them to be, getting the initial capital together, even though the requirement may be a lot less than before, is something young folk have to focus on. What’s the best advice you received when you first set out to build a business, and what advice would you give a young entrepreneur today? Where are you going? How are you going to

get there? And how keen are you to make it happen? It’s all about vision, strategy and passion. Have you clarity of vision about what you’re actually going to do? Have you sat down and worked out your strategy so you know how you will get from where you are to where you want to be? Having the strategy written down and embedded in your mind – and importantly, the minds of those who may be round about you – keeps you on track. These days it’s so easy to get sidetracked, that you’ve got this other opportunity and so you’re off to the left or off to the right. You need absolute clarity, then pursue your strategy with great passion. With the Reg Vardy business we did this every three and five years. We sat down and said: “What franchises have we got? How do we grow them? What are the franchises we don’t have? How are we going to go about that?” By having that platform of strategy, everybody in the business knew this was what we were going to do and this is what we’re not going to do. It’s important when you’re leading a team that the team knows where you’re going. You can’t be lost in the fog ahead of them, leaving them ignorant of what’s going on. They don’t then

feel part of the organisation. You need to have your people brought into your vision, understanding your strategy because you need their passion as much as yours. And make sure people you recruit cover your weaknesses, so that the company benefits from the strengths of all its employees. Asked: “What’s your greatest asset?” we may reply, “Oh, it’s our staff. But it’s the strengths of the staff that are the greatest asset, not the people themselves. You need to ensure you have strengths covering your own weaknesses. Often a guy may be looking for someone to join him in the business. He recruits someone like himself. But you need balance. My strength, I suppose, was sales and marketing. My weakness was finance. I went out and got the best finance director I could find. He was my greatest asset. Together, we had the strength in the right places. I’d advise writing down on the left-hand side of a sheet of paper what you enjoy doing and what really gives you the buzz. On the other side of the paper, write down the things you don’t like doing, the things you find a grind, then recruit someone to do those things. It’s not getting someone to do the dirty work but finding someone to do well the things you >>

BUSINESS QUARTER |WINTER 12

ENTREPRENEUR don’t do well. We’re all better if we’re working 100% of the time to our strengths. If you’re working to your weaknesses you’ll never make your weaknesses your strengths. If you were starting out again would you consider a completely new activity? No, I’d stick to my known strengths. If you’re starting a new business and your livelihood depends on it you must stick to what you know best. My dad had a haulage business and a car business and my interest was in the cars. I worked my way up that business. What’s the greatest satisfaction in being your own boss? The ability to make decisions and travel at your own speed, with no-one holding you back. You can get on with the business. It’s a big responsibility making all the decisions but at least you can get on and do things, whereas if you have to sit around and think about it or persuade other people to do it that’s quite wearying. It saps your energy. Is the North East becoming more entrepreneurial? I think it is. There are lots of opportunities. Nine years ago we started the Entrepreneurs’ Forum to encourage people to be thinking entrepreneurially and building the entrepreneurial spirit that exists in the region, and that’s very, very successful. And we have to help each other; support each other in our journey as business leaders and entrepreneurs. Do you favour the return of apprenticeships? Definitely. One of the biggest mistakes this country and its business has made was slowing down on the apprenticeships. Everyone coming out of school should have had the chance of an apprenticeship for two or three years. It would have given them wonderful work experience, knowledge and ability. It faded away when apprentices wanted too much money, wanted to earn too quickly and not learn enough. So the foundations of someone’s working life weren’t firmly laid. Schools aren’t able to do it. We’re much poorer as a nation and as employers in

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I’d advise writing down on the left-hand side of a sheet of paper what you enjoy doing and what really gives you the buzz. On the other side of the paper write down the things you don’t like doing, the things that are a grind. Then recruit someone to do those things industry alike, as indeed the individuals are much poorer through not having had that experience. I worry about the new apprenticeships to an extent. Businesses need to embrace apprenticeships and train folk for their own organisations. That’s essential to the success of their own company. Once you get into the Government handing out money then, as we’ve read in the newspapers over the past few weeks, there are a lot of companies making an awful lot of money out of training schemes and it doesn’t actually get back to an apprenticeship in the first place. Some are just getting a general training. It’s not the same as coming into a company at the bottom. We don’t want a return to folks just making the tea and sweeping the floors. Proper employers know that; they’re not looking for cheap labour. But we do need to train people for the good of our own businesses. What goes against that, obviously, and it may be one of the reasons, is that by the time they’re 30 now people may expect to have had about six jobs whereas before, when they got an apprenticeship, they stayed with the company, and saw their career progression through the company. There was a lot more stability in our society. The stability has gone. Can apprentices realistically aspire to executive positions eventually? Definitely. There are lots and lots of examples where folk have started off in apprenticeships and risen through the ranks. I did it myself. I was in a family business but I still started by sweeping the floors and serving the petrol, then I became a mechanic. I think it’s great

when you have a foundation in the company and you can speak from a position of strength. You’ve seen everybody; you’ve done most of the jobs. You know how people feel. It was a great help to me when I was a mechanic in my dad’s company. In later life, when I was employing mechanics, I knew how they were doing their job. You knew how it felt to be pulling out gearboxes and all that sort of thing. I didn’t have a very good education, or very good schooling. I got off to a bad start and never recovered, to be honest with you. I wanted to leave school at 16 and work. I got the opportunity to work in my father’s business when there were only six employees. I did time as a paint sprayer and a panel beater – did all the jobs for the first few years. Then I got into selling and that’s where I enjoyed my time the most. What would you advise aspiring entrepreneurs to be on guard about? Cash and accounting. Those are two things they really must understand. I find a lot of people don’t spend enough time learning to understand the financing of business. They get into all sorts of trouble. They treat income as profit, whereas there are expenses and everything else to take into account. They don’t get someone into the team early enough who can give sound accounting advice. They could do an awful lot better if they actually knew the numbers. Profitability, cost base, everything else... They may need someone to mentor them and there are plenty of people keen to help. You need to get things right, otherwise you’ll find yourself down the road and having used up all your >>

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ENTREPRENEUR

WINTER 12

initial capital. Then you find yourself in an almighty struggle. Would you advise anyone to follow your example and combine business with a growing sense of philanthropy? Yes, but concentrate on making the money first. Don’t start trying to give it away before you’ve got it. A lot of folk think philanthropically but some think to give it away before they’ve got it. I’m a great advocate of giving 10% of your profit to charity. But make sure you’re making it, and that your business is on a firm footing first. Is there any young entrepreneur in the North East presently you’d tip as being a major success story in the future? I think there are many, and to be honest I wouldn’t like to name them. At the Entrepeneurs’ Forum we have a campaign called If We Can You Can and there is some fantastic talent among younger members. So the North East is well blessed. It’s up to those of us who have been on the road a while to help, nurture and mentor them to achieve the breakthrough and create some great companies in the North East. Come March 4, Peter, will you be inclined to retire at 65? Never in a million years! When you’ve worked all your life, 65 is only a milestone. There’s so

His route to success Sir Peter Vardy took over control of the car dealership Reg Vardy plc in 1976, after the death of his father. By the time the Sunderland-based business was sold for £506m in 2006, he had built it into one of the largest companies of its kind in the country. He is chairman now of the Vardy Group of Companies, comprising Vardy Property Group and Peter Vardy Ltd, and based in Durham City.

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When you’ve worked all your life, 65 is only a milestone. There’s so much to do, so little time in which to do it. Looking at life, there are two halves much to do, so little time in which to do it. Looking at life, there are two halves. The first half is when you’re doing all the work. For me it was creating a success, and creating the funding. The second half is: how do I give it back? How do I put it back into society? How do I

influence for good whatever I can come into contact with? How do I help other people? A lot of folk are doing tremendous work and just need funding to go on doing it. So we’re involved with hundreds of different charities at home and abroad, but also trying to concentrate on the North East. n

Sir Peter Vardy on business ﬂair where you’d least expect it.

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SUCCESS STORIES

WINTER 12

Back to the bicycle A Rolls or a Porsche may be the ultimate business executive’s dream but in these difficult times reliance on two-wheel transport can be the key to start-up success, as award winner Barbara Croce and other entrepreneurs are showing. Brian Nicholls reports The wheel is turning full circle as business amid austerity gets back to basics. Would you believe there’s even a magazine and website devoted to bicycle businesses now: Bike Biz, www.bikebiz.com? Barbara Croce is a notable example of this new cycle of success. She has some of the best small businesses in the North East, her triumph in the recent Women into the Network annual awards suggests. Like a growing number of small start-ups these days, her achievement in the regional awards has been partly built on restoring cycles to a moneymaking role. Changed days, of course, from when the butcher boy or the grocery lad delivered orders door-to-door to our grandparents, making money for their employers on a nameplated bike. But the outcome is the same. Doing business on and through cost-efficient bicycles and tricycles, geared by the internet, can take business creators the distance in more ways than one. Barbara Croce’s imaginative transformation of tricycles and vans for sale has enabled her to build three successful businesses over 10 years: Coffee Latino, Storm Tea and On Your Trike. Croce, 38, claims now to be Britain’s market leader in “mobile” coffees. Customers in Australia, Iceland, Germany, the US and Dubai all enjoy tea flavours and coffee tangs from Durham County through Coffee Latino

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and Storm Tea, sent to them from a High Spen factory. There the family business fabricates, brands then sells coffee vans, tricycles, carts and trailers. There too, it roasts imported coffee beans, blends imported tea to its own formulae, and gives barista training. It offers a choice from eight models of coffee van and two models of coffee cart, and can provide uniforms to order. There’s an element of high technology also, for the coffee-making machines on the tricycles are solar powered, an inspired move introduced in 2007. And having started as a mobile coffee operation, the business also offers ongoing guidance to anyone keen to go into outdoor vending. They say behind every successful man stands a successful woman. Conversely, Barbara Croce affirms that behind her success there’s >>

The business has grown every year. But without doubt this is our best year yet

What goes around: Barbara and Mario Croce have developed a thriving enterprise in retailing from bicycles

BUSINESS QUARTER |WINTER 12

SUCCESS STORIES certainly a man. That’s her husband Mario – “as good a husband as any could be”. He’s a fully qualified chef, trained at the Marriott Gosforth Park Hotel, and subsequently a member of multi-millionaire Graham Wylie’s team running Close House Hotel, Heddon on the Wall. Mario, 39, is managing director and secretary of the High Spen operations, combining these responsibilities with that of company taster and vitally, househusband, at their home in Ryton, Gateshead, he looks after their three children – Luca, 10; Vito, seven; and Nito, six – while Barbara as sales director, sometimes works until quarter to one in the morning meeting orders for vehicles and commodities. Their workforce of around 10 is inundated with phone calls from 7am to 11pm from many parts of the world, and the internet enquiries and orders just go on around the clock. They run four websites besides www.coffeelatino.co.uk, each offering a different service. Before he retired, Mario’s father Antonio, was “Toni” to countless loyal customers who bought ice-creams from his van on the Quayside at Newcastle. It struck Barbara that many promenaders might also enjoy a cup of espresso, a street-sale novelty then. She converted first one van that she and Mario bought, put it on the road, and a year later found they could sell the vehicle at a profit. One van followed another and the business developed. Fabrications once carried on at the Croces’ home now continue on a larger scale at the factory. Tricycles imported from Holland and adapted there to carry the delicate coffee machines are also branded to clients’ preference. A “pop-up” cafe enterprise, surrounding a coffee-making cycle with parasoled tables, is building nicely, used most recently at The Baltic in promoting the Turner Prize. Coffee Latino cycles have appeared on television in The Apprentice and EastEnders. Back at the factory, orders are going out to Canada, Ireland, Massachusetts and Colorado, Taiwan, Spain, Poland and Cologne in Germany. Storm Tea has recently extended its customer base into Poland and Germany. Enquiries for bikes and trikes are 70% from overseas with the US a close second to the

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Wheeling ahead: Jack Payne and Rob Grisdale, Scratch Bikes entrepreneurs, with, left, Sean Bullick, chief executive of NE1 Ltd.

Our investment has also enabled Scratch to develop the unique locking and tracking system which is being patented, and the company is in talks with international companies about selling the systems UK in requests for detail. Barbara Croce says: “The business has grown every year. But this is our best year yet.” Bicycles and tricycles also have a key role in the success of Newcastle’s NE1 business development district covering the city centre. Jack Payne and Robert Grisdale have proved entrepreneurs in this, wheelers and dealers literally – and so successful with their Scratch Bikes hire business that the retro-inspiration has impressed Newcastle fund managers Rivers Capital into backing them. Grisdale and Payne, in their mid-20s, got the idea for Scratch Bikes while studying civil

engineering at Newcastle University. Grisdale says: “We’d seen and used other systems across Europe and loved the concept. We wondered why they have to be so technology and infrastructure intensive – too expensive for any but the largest cities.” They planned their simpler solution, and launched it in September 2010 at Newcastle University. It worked. From the first week they got positive feedback from almost every customer. They employ apps in their simpler system, so users can keep in touch and give feedback on possible new rental locations and difficulties or faults. Soon NE1 Ltd started

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working with Scratch Bikes. It wanted just such a service and liked what it saw serving the university campus. NE1 offered the finance and backing Grisdale and Payne needed to extend their business. Biz Bike says hire schemes may employ slightly different methods and pay structures, but all are driven by the basic principle of offering bikes for hire to navigate busy cities, providing an alternative to gridlocked roads and busy public transport. Sean Bullick, chief executive of NE1 Ltd, says: “When we learned about Scratch Bikes we didn’t want to reinvent the wheel. So we teamed up with them to extend their scheme across the city with 150 NE1 sponsored bikes.” Positioned at hire stations across the city, these also provide great visibility for NE1 Ltd, Bullick says, as more and more people take to hiring them. A growing number of businesses have signed up for their staff to use them. He says: “Our investment has also enabled Scratch to develop the unique locking and tracking system which is being patented, and the company is in talks with international companies about selling the systems. NE1 Ltd bikes for hire are here to stay in Newcastle.” As in Paris, Dublin, London and Barcelona, sightseers on Tyneside now pedal through the city, as do many local workers wanting a quick weave to appointments or on errands through heavy traffic. The transport enables NE1 to avoid extending its motor fleet for short journeys – in keeping with “green” transport advice. Indeed NE1’s Street Rangers and Clean Teams who help spruce up the city centre do so on bikes and trailers for rapid response to calls for help from businesses. Clean Team responds to litter, graffiti and hygiene issues at business premises, complementing the city council’s street cleaning. There are also two Info Trikes from which Street Rangers provide information and advice to the public. These are like the old-fashioned butchers’ bikes, with a large basket on the front. These days it opens into an information stand. These often stand at busy intersections in Newcastle, at the Monument for example, giving a focal point for public information and distribution of leaflets and maps. NE1 buys locally too – from a recently-opened

SUCCESS STORIES

bike shop, Ride, on Westgate Road. Infinite Design on Leazes Park Road designs the livery. NE1 Ltd, which also took an equity share in Scratch Bikes’ development company Grand Scheme (which is pursuing the patent for its

locking and tracking technology), suggests the cycle revival in Newcastle, and the partnership with Scratch Bikes, offers a viable model for many cities at home and abroad. Payne and Grisdale are looking at mainland Europe and the US. n

Cycle treat: Charles King, left, and his ice-cream cycle make a seaside visit even more enjoyable for Peter Devany on his visit to Saltburn

Holiday favourites Elsewhere in Newcastle, Paul Snedker has shown for 15 years that cycling enterprise in Europe can be profitable and praiseworthy. The Ouseburn company Saddle Skedaddle, of which he is director, recently won the Best Short Break Operator (small operator) title in the Guardian, Observer and guardian.co.uk Travel Awards. Snedker and co-founder Andrew Straw, the firm’s marketing director, are particularly delighted because it’s customers who select the winners of these awards. The firm offers more than 100 cycling holidays in the UK and 35 countries throughout Europe, South America, Asia and Africa, as well as bespoke and self-guided trips. They employ 10 people and work with 40 partners and guides across the world. And at Saltburn, North Yorkshire, Charles King, a get-up-and-go local businessman, has found like NE1 Ltd that cycles can be cost-efficient as well as environmentally friendly. He drove to Brighton and bought a £2,000 ice-cream seller’s cycle that he put on the road to start trading with last summer. He got it from someone selling more to Portuguese beach traders than to North East retailers. He runs Sweet Kings from the former Post Office building he owns in Station Street at the holiday resort. The strenuous ride up the steep hill from the beach to Station Street after day-long selling of ices is no daily sweat for him, though. Anyone who has strained their way up that incline will appreciate why pedalling and peddling ice-creams there might be a job more for fit young men. But the recent Indian summer proved the energy was worthwhile expending. “We’ve even had bookings for weddings,” he chuckles, which must take some licking. Starting a business these days may be cheaper than we sometimes think.

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IN ANOTHER LIFE

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From neurosurgeon to software guru

Sarat Pediredla is the co–founder and partner of mobile agency Hedgehog Lab which specialises in designing, building and marketing mobile apps, sites and touch-screen experiences. In the booming mobile and app industry, Pediredla spends his days pursuing new business, working on national projects and managing a team of 11 with the aim of tripling turnover this year. However, instead of researching, designing, developing and testing software in another life, he might have been found in the operating theatre treating brain, spinal cord and peripheral nerve illnesses as a neurosurgeon. He explains

My career as a software developer sees me working within a sector that’s constantly evolving. You never stop learning in the technology industry as developments are made every day and night. It’s part of my aptitude and dedication to learn constantly new ways of thinking, which is a key skill needed for my job, and I believe that too of a neurosurgeon. Like fixing and understanding the human body’s complex network of synapses in the nervous system, I work creating and dissecting complex source codes when creating software using computer programming languages. However, if you’d asked me 10 years ago where my future lay, I’d never have predicted I would have swapped the nervous system for the internet network. Growing up in an Indian family, the two most socially respectable jobs you could embark on were either engineer or doctor, and my father was very keen to encourage me to study medicine. It was something I was very enthusiastic about, since I was a hard working and conscientious student, scoring distinctions in all my subjects

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as a child and teenager. It was kind of obvious really. And if I was to become a doctor, I wanted to become the best surgeon there was out there. For nearly all my teen years I was prepped for medical school and went to one of the best pre-med schools in my region. However, it was at the same time as my dad bought me my first computer and the rest – as they say – is history. In 1999 I came to the UK to study for a BSc (Hons) in software engineering at the Southampton Institute. I then went to work as a freelance designer, carrying out some contract work in my early years before settling at digital agency Th_nk in Newcastle, working

as lead developer on some of its biggest client accounts. There, I met Mark Foster and we started to talk about founding our own digital agency that valued great software and technical skills, combined with exceptional design. In 2007 we formed Hedgehog Lab – an agency focused on nurturing talented developers and designers rather than the marketing-focused digital agencies that were the norm. Now four years old, the company continues to grow, seeing the opening of our London office this year. If asked whether I’d swap my life with my iPad for my life with a scalpel, it’s safe to say I have no regrets.

Growing up in an Indian family, the two most socially respectable jobs were engineer or doctor and my father was very keen for me to study medicine

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PRINCE’S TRUST

Classic welcome for a remarkable entrepreneur

By John Wall Charles Dunstone, the remarkable founder of The Carphone Warehouse and Talk Talk – and chairman also of The Prince’s Trust – will be visiting the North East on February 7 to launch the trust’s North East Leadership Group. The event will take place at The Aston Workshop at Beamish, where there will be a unique opportunity to see behind the scenes of this world-class facility where classic Aston Martin cars are restored. Young people’s lives can be changed for the better in the UK through The Prince’s Trust charity. It gives practical and financial support, developing skills such as confidence and motivation. Further, it works with 13-30 year olds who have struggled at school, have been in care, are long-term unemployed or have been in trouble with the law. This year, the UK’s leading youth charity will support 50,000 young people to develop key skills, confidence and motivation, enabling them to move into work, education or training. In 2012 the aim is to help 4,000 disadvantaged young people in the North East. Through the North East Leadership Group, successful entrepreneurs, organisations and leaders from across the region will gather in

support of the trust’s Enterprise Programme, which provides support and funding to help young people explore their enterprise ideas and start their own business. Bob Fountain’s Aston Workshop is perhaps a fitting venue for the occasion, since Prince Charles has a classic Aston Martin DB6 Mark 2 Vantage Volante. Only 12 were ever made and Prince Charles’s was the dark blue convertible that took William and Kate, the Duke and Duchess of Cambridge, off on honeymoon. A sister car sourced from South Africa currently stands in the Aston Workshop awaiting a rebuild. Only three of the 12 models were made as automatics, and one of the three is this one.

The Enterprise Programme helps young people to test their ideas and learn about areas such as finance, marketing and taxation. For those going on to start a new venture, business mentoring and financial support is available where needed. The Leadership Group will provide funds to expand and develop the Enterprise Programme and entrepreneurship in our region. If you would like to support and inspire leaders of tomorrow, please say “yes” to the invitation you have received or call me on 07802 917 615. John Wall is chairman of The Prince’s Trust North East Development Committee

The launchpad: The Aston Workshop at Beamish will be the launchpad for an ambitious take-off enabling young people to get a better start in life

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MEDIA BRIEFS

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opposing a services cutback at Bishop Auckland General Hospital. Yet it only sold 2,000 copies. Assuming the norm of three readers per newspaper why didn’t 10,000 others who knew it existed also read it regularly? Editor Phil Hardy, who ran it with six reporters over the years, blames the tough economic situation. “We all tried our very best,” he said. Pity more Wear Valley folk hadn’t.

The Scrutator >> One at a time Allan Leighton, deputy chairman of Selfridges and non-executive director of BSkyB, has recently taken up yet more chairmanships and non-executive directorships. Remember him also at Asda and Royal Mail? He even finds time to write. Tough Calls (Random House £18.99) suggests routes to swift but sound decisions in trying circumstances. Included are “how I did it” interviews with other major business leaders who outflanked the recession. These include Sir Terry Leahy, formerly of Tesco; Mark Thompson, director general of the BBC; Stuart Rose, former exec chairman of Marks & Spencer; Archie Norman, ITV chairman; Marcus Agius of Barclays and, militarily, General Sir Mike Jackson and General Lord Richard Dannatt.

>> No hiding place Neil Fowler, a former editor of The Journal newspaper, suggested in his recent Guardian Lecture at Nuffield College, Oxford, that more daily newspapers should become weeklies to survive media’s tempest. But weekly papers aren’t failproof either. The Wear Valley Mercury at Crook in County Durham has expired without even a fifth birthday, even though immersed deeply in community life. At one point it had gathered more than 16,000 signatures

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>> Laid back boss Peter Taylor, on the other hand, contends you can do more with less effort, and succeed in work and personal life without rushing round like a headless chicken or putting in 100 hour weeks. In the Lazy Winner (Infinite Ideas paperback £14.99) he says when facing a knotty problem or task ask yourself: Do I want to do this? Is it worthwhile? Do I have to do it myself? What’s the shortest path to success? Can I maximise the return on my effort? Taylor says if the questions create panic you may be set to become a busy loser. It doesn’t have to be that way...

>> Give us a break I was sorry to miss Andrew Crisell’s seminar at Sunderland University suggesting radio and recorded pop music may be heading for divorce. Professor Crisell contends that the internet and social networking are removing the need for records on radio, which could get back instead to live music. I’d argue additionally the need for local radio to replace records and presenters’ gabbling about their Saturday night out, and how many sugars in their tea, with locally input short stories and poetry – also, local quizzes, and business news and information much deeper than the contract wins and redundancies that station editors seem to think are all that will hold listeners’ attention. And what of minority sports – some women’s hockey, schools rugby? Stations

might argue they must give listeners what’s popular. But listening figures suggest the present diet isn’t popular. BBC’s imminent budget cutbacks give an ideal opportunity to revolutionise content. But don’t hold your breath.

>> Doing business, Shearer style You don’t always win battles in business. Maybe Alan Shearer has the answer. Ex-England captain David Platt recollects that whenever Newcastle’s former goalscoring machine missed a chance no head in hands histrionics followed. He just sniffed, his way of saying the chance was over. He moved on, confident of another chance, another goal. That, says Platt, is the mental strength of the man once one of football’s leading scorers year after year. He tells of this in Geoff Greenwood’s motivational book The 12 Biggest Business Problems You Cannot Solve are all Really Mental (The Global Business Training Company Ltd). Greenwood, a consultant in performance psychology, draws on sports success to inspire achievement in business. Many top sports performers, as we know, have their mental attitudes sharpened by psychologists. Greenwood brings out the “corporate athlete” in business owners and executives by developing a growth mindset, and the ability to perform at highest level, even under pressure. Two contentions he addresses: • More than 80% of our daily thoughts are negative and limiting • Try to remedy a customer problem or issue and 82 to 95% of the customers affected will stay with you. A former chartered accountant for a subsidiary of a UK plc, and an MBA, Greenwood now runs workshops and e-learning guides. “Many businesses still use strategies and thought patterns now outdated,” he says.

>> One for you A limited number of Geoff Greenwood’s manuals are being offered free to BQ readers, and a digital version will be made available. Contact info@geoffgoodwood.com

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BIT OF A CHAT

with Frank Tock >> Face the airport facts No-one’s reached the nub of the crisis Durham Tees Valley Airport faces. Vital though KLM’s connection remains in battling the airport’s £2m losses, full recovery requires restoration of a Heathrow service. An airline using smaller aircraft could make it pay. Eastern Airlines proves this at Teesside already, shuttling up the East Coast. But Heathrow landing slots – scarce as silverware to North East football clubs – are also needed. Heathrow slots are a scandal successive governments ignore. Concern for wellbeing of British Airways seems paramount, as if BA was still nationalised. And slots are secretly sold for ridiculous sums to allow external routes more profitable than domestic ones. Guaranteeing a slots quota to the regions could raise Teesside’s passenger numbers – at 192,000, now at their lowest for 35 years. Ending the mounting charges on air travel under a guise of environmental consideration would also help. A loopy report to the Department for Transport claims local airports will double their capacity or more over 40 years. The eventual passenger throughput predicted for any potential buyer of Peel Airports’ 75% stake in Teesside is put at 10 million, but to date, its highest ever has been 917,963, and the report even inflates present throughput to three million. British Midland, slots and all, has recently been sold to International Airlines Group, owner of British Airways and Iberia. It was BM that isolated Teesside from Heathrow. BA has long made clear Teesside does not interest it. Iberia likewise, for sure. When Teesside first opened in the 1960s it was suggested Luton was in London and that’s

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where Teesside/London flights should go. Given the mess successive governments make of our air transport – hence Heathrow’s bottleneck now – linking Teesside with some other outlandish destination may be suggested. That would have to be resisted. Heathrow is essential, even if holding out delays potential buyers’ interest in Teesside. Prime minister David Cameron describes Teesside’s airport as “vital”, but if we must wait 20 years for some slots at a proposed Thames Estuary Airport, I fear there’ll be no Teesside facility. We await a Government report on air transport in March.

>> A gentleman... Fred Holmes and Jack Diamond, two lovely people to deal with in business, are sadly no longer with us. Fred was, as David Faulkner his ex-colleague at Northern Electric, says, “modest, unassuming yet full of humour and always with a smile, never spoke ill of others and such a loyal company man”. He, David and another ex-colleague, Andrew Horne, helped defend Northern Electric against a Trafalgar House takeover attempt in 1994-5. They led the PR gun battery. Andrew remembers Fred being particularly anxious that their PR messages must ring true not only to the media. He recalls: “The company hadn’t long been privatised. Fred appreciated better than most that the shareholders included many customers, and they’d had mixed feelings about privatisation in the first place. Also, our stance throughout had to be consistent with what staff were seeing in their daily working lives – be it the bloke mending an overhead line, someone digging a trench, or an operator at the call centre. “He understood staff were just as likely as the PR team to be tackled in the pub or elsewhere about what the company was up to. They needed to have confidence it was doing right, even if they didn’t know all the ins and outs.” Fred, in short, cared. The company was later split up instead, the parts being redistributed under the Utilities Act 2000.

>> ...and a wit Jack Diamond – ex-ICI, ex-Glaxo – was the voluble, witty and competent commercial microbiologist who set up Diamond Scientific at his home in 1974 and ran it very successfully for many years, till selling on. The firm was in demand across Britain and mainland Europe for its skills in cleanroom consultancy. Jack himself, a perfectionist, spent much of his time on the road, in Britain and on mainland Europe. He was always enthralled by experiences in Ireland particularly, partly through family background perhaps but also, of course, because that’s where odd things happen. He loved the Sunday morning he turned up at a factory there as arranged, to find the place locked and deserted. He stood for ages. Then a cyclist – the one who’d passed him some time before – took pity, returned and said: “Shure now, if ye go round to the front door ye’ll find the key under the mat!” Fred lived at East Herrington, Jack at Gainford near Darlington. Both died in their 79th year.

>> Oh, my aching gut Have you got the stomach to be an independent financial adviser? Walter Gavaghan, who practices on Teesside, has had a phone call from someone asking for a “Mr Gaviscon”.

>> Smiles for SMEs Cheer up, small business. It’ll be easier to pitch against larger rivals for public sector work soon. Karen Andrews, a partner at law firm Ward Hadaway, tells me of EU plans to simplify the bidding for contracts. Despite recent cuts, public procurement still accounts for around 17% of GDP in the EU, but smaller companies win maybe only 38% of that, despite providing over half of all turnovers in the EU. The EU also wants better training provided for small businesses on this. Andrews is sure the move will be welcomed by those it aims to help. Sub-dividing contracts beyond €500,000 into different “lots” is one of the major proposals.

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COMPANY PROFILE

It’s time to celebrate the spirit of enterprise that exists in the Tees Valley with the selection of the winners of the Best New Business Awards.

TIME TO RECOGNISE TEES VALLEY ENTERPRISE “we’ve a lot to be proud of here in the Tees valley; the best new business awards are a great way of showing that pride.” many previous winners have gone on to become very successful companies including guardian marine Testing, citrox, global Transport logistics and qurios entertainment, kate fearnley and cornerstone business solutions.

Stephen Catchpole and Colin Brown with last year’s winners, Guardian Marine Testing

nce again Tees valley unlimited (Tvu) & colin brown i.f.a are the main sponsors of the awards to showcase firms that stand out from the scores of successful new names trading in the region. The awards – devised and organised by colin brown, of lighthouse fa ltd, are also sponsored by Teesside university and PD Ports. now in their 12th year they aim to recognise new businesses (trading 3-years or less) that help drive economic growth. 2011 was an excellent year for many new and emerging businesses and out of the 70 entries 24 have been nominated across eight categories. The winners will be announced at an awards dinner which takes place at middlesbrough football club on monday, february 20. each category winner will receive £500 and the overall winner will receive an additional £1,000. The cash injection is a welcome boost to new businesses at a critical time in their development. and despite forecasts of tough economic times

ahead awards founder colin believes the time is right for new businesses to come to the fore. he said: “it’s the private sector, in particular small businesses, that are driving the economy at the moment and these awards are a great opportunity for new businesses to show their ambition and be honoured for their hard work. “The awards fulfil a vital role in identifying, recognising and rewarding new business start-ups. many young firms honoured by the awards go on to become successful regional, national and even global companies.” stephen catchpole, chief executive of Tvu, said: “we’re constantly striving to improve the economic performance across the whole of the Tees valley. recognising those new and emerging businesses that contribute so much to local growth is essential. “The best new business awards are a great way of rewarding enterprise and entrepreneurship. They are a vehicle for promoting the region and act as inspiration to other would be entrepreneurs.

category sponsors this year are: RETaIL – stockton borough council SERVICE – middlesbrough council MaNUFaCTURING – north east chamber of commerce CREaTIVE INDUSTRIES – institute of Digital innovation COMMUNITY – five lamps organisation MaRKETING – chartered institute of marketing (ken atkins) YOUNG ENTREpRENEUR – uk steel enterprise ENVIRONMENTaL – industry nature conservation association OVERaLL WINNER – colin brown of lighthouse fa and Tees valley unlimited Tickets to this year’s awards dinner are available and cost £35. Tickets can be purchased by calling Colin on 01642 862177.

Further information on Tees Valley Unlimited and its activities please visit www.teesvalleyunlimited.gov.uk

BUSINESS QUARTER | WINTER 12

EVENTS

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BQ’s business events diary gives you lots of time to forward plan. If you wish to add your event to the list send it to b.g.nicholls@btinternet.com. The diary is updated daily online at www.bq-magazine.co.uk

FEBRUARY

20 House of Commons Reception, showcase for North Sea offshore, wind and subsea industries. 0191 384 6464. k.leng@nofenergy.co.uk

1 Durham Business School, MBA preview event (10.30 onwards), p.g.bus@durham.gov.uk

20,21 First national event at Northern Design Centre, Gateshead. Design Means Business Conference. www.designmeansbusiness.org.uk

2 Building an Entrepreneurial Organisation, Richardsonhowarth workshop, Tyneside Cinema, Newcastle (1.30). 0191 222 0845 2 Tackling Business Crime Together, inaugural meeting to form a North East Business Crime Centre, Marriott Hotel, Metrocentre, Gateshead (8.30am).dawn@racne.org.uk 07944 616 202

22 North East Business Awards, Tyneside and Northumberland, Gosforth Park Marriott Hotel 22 NSCA, Essential Tips for the Busy Practitioner, Ramside Hall Hotel, Durham (1.30pm). Marie Rice 0191 300 0532 or Marie.Rice@icaew.com

4 30th presentation of Tom Cordner North East Press Awards, National Glass Centre, Sunderland (6.30pm). 0191 265 6111 or Bernice@sortedpr.com

23 Energy and Environment North East, free event for SMEs interested in those sectors, Xcel Centre, Newton Aycliffe

10 IOD North East /ICAEW Northern Region,The Role of the Chairman, breakfast seminar, Teesside University Business School (7.30am). 0131 202 1252. alison.tait@icaew.com

23 Routes to Investment, NEA2F and Science City workshop series featuring Paul Walker, Jeremy Middleton and Fiona Cruickshank, Newcastle City Library michelle.blow@hilaryflorekpr.co.uk. 0191 285 7100

14 CECA (NE)/Watson Burton seminar, Supply Chain, Durham County cricket ground, Chester le Street (8am). 0191 228 0900. vickiceca@aol.com

28 ICAEW Northern Region/IoD North East, Director Development Breakfast Seminars: The Role of the Human Resource Director, Ward Hadaway, Newcastle (7.30am). Alison Tait 0131 202 1252 or alison.tait@icaew.com

15 South Tyneside Manufacturing Forum, Manufacturers’ Exhibition, Bede’s World, Jarrow (noon). 0191 427 2324 20 NOF Energy, Market Visit: Oil and Gas to Australia. 0191 384 6464. k.leng@nofenergy.co.uk 21 NSCA, How to Create a Winning Practice, Jesmond Dene House Hotel, Newcastle (1.30pm). 0131 202 1252 or alison.tait@icaew.com 23 NOF Energy Networking Lunch, Wilton Group, Hardwick Hall Hotel, Sedgefield. 0191 384 6464. k.leng@nofenergy.co.uk 24 Routes to Investment, NEA2F and Science City workshop series featuring Paul Walker, Jeremy Middleton and Fiona Cruickshank, Newcastle City Library. michelle.blow@hilaryflorekpr.co.uk. 0191 285 7100 24 NOF Energy, Oil and Gas Market Briefing: Papua, New Guinea, NOF offices, Durham. 0191 384 6464. k.leng@nofenergy.co.uk

30 Routes to Investment, conclusion of NEA2F and Science City workshop series featuring Paul Walker, Jeremy Middleton and Fiona Cruickshank, Newcastle City Library. michelle.blow@hilaryflorekpr.co.uk. 0191 285 7100.

APRIL 3 NSCA, PAYE Update, Ramside Hall Hotel, Durham (9.30am). Marie Rice 0191 300 0532 or Marie.Rice@icaew.com 3 NSCA, HMRC – Penalties, Compliance & Agents, Ramside Hall Hotel, Durham (1.30pm). Marie Rice 0191 300 0532 or Marie.Rice@icaew.com 16 NOF Energy, International Oil and Gas Visit: Brazil. 0191 384 6464. k.leng@nofenergy.co.uk

29 Robson Laidler Property Conference, Gosforth (5.45pm). 0191 281 8191 or sbowen@robson-laidler.co.uk

17 ICAEW Northern Region, Excel Making the Most of Your Accounting Data, Ramside Hall Hotel, Durham (9.30am). Alison Tait 0131 202 1252 or alison.tait@icaew.com

MARCH

17 ICAEW Northern Region, Excel Make Excel even Better, Ramside Hall Hotel, Durham (1.30pm). Alison Tait 0131 202 1252 or alison.tait@icaew.com

2 Routes to Investment, NEA2F and Science City workshop series featuring Paul Walker, Jeremy Middleton and Fiona Cruickshank, Newcastle City Library. michelle.blow@hilaryflorekpr.co.uk. 0191 285 7100

18 South Tyneside Manufacturing Forum, Ian Hunter (TDR Training) on Behavioural Safety, and John Raine (Assessment North East) on Equality and Diversity, Bede’s World, Jarrow (noon). 0191 427 2324

2 to 4 NSCA, Redworth Three-Day Conference, Redworth Hall, Darlington. Marie Rice 0191 300 0532 or Marie.Rice@icaew.com 5 Durham Business School, MBA Preview Event (10.30 onwards), pg.bus@durham.gov.uk

26 North East Business Awards Final, Hardwick Hall, Sedgefield. 26 ICE North East Dinner and Robert Stephenson Awards, Gosforth Park Marriott Hotel

7 NOF Energy, A Balanced Future conference and exhibition, Hilton Gateshead. 0191 384 6464. k.leng@nofenergy.co.uk 8 Achieve, Entrepreneurs Forum, International Women’s Day business conference. Speakers: Michelle Healy and Fiona Cruickshank. Hilton Gateshead (9.30am). Open meeting hazel@entrepreneursforum.net 8 North East Business Awards, Teesside, Olympia Building, Teesside University 12 to 16 NOF Energy, Market Visit: Oil, Gas and Renewables to Spain. 0191 384 6464. k.leng@nofenergy.co.uk 15 North East Business Awards, Durham and Wearside, Stadium of Light, Sunderland. 16 Routes to Investment, NEA2F and Science City workshop series featuring Paul Walker, Jeremy Middleton and Fiona Cruickshank, Newcastle City Library. michelle.blow@hilaryflorekpr.co.uk. 0191 285 7100 20 EEF members’ briefing, Employment Laws Update, Gateshead (9am). 0191 384 6464. k.leng@nofenergy.co.uk

BUSINESS QUARTER | WINTER 12

19 CECA (NE) agm, Ramside Hall Hotel, Durham (6pm). vickiceca@aol.com. 0191 228 0900

28 ICAEW Northern Region, New to Practice, Beamish Hall Hotel, Durham (9.30am) Alison Tait 0131 202 1252 or alison.tait@icaew.com please check with contacts beforehand that arrangements have not changed. Events organisers are also asked to notify us at the above e-mail address of any changes or cancellations as soon as they are known.

KEY: acas: Advisory Conciliation and Arbitration Service, CiM: Chartered Institute

of Marketing, CECa (nE): Civil Engineering Contractors Association (North-East), HMRC: Her Majesty’s Revenue and Customs, iCaEW: Institute of Chartered Accountants in England and Wales, iCE: Institution of Civil Engineers, nECC: North-East Chamber of Commerce, nSCa: Northern Society of Chartered Accountants, FSB: Federation of Small Business, Tbc: to be confirmed.

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Real world solutions for testing times. At Grant Thornton, we’ve always gone about our business in a very different way. Delivering a bespoke service to all our clients is our primary concern and we won’t offer you or your clients an ‘off the shelf’ financial and tax solution. Far from it. Our advisers take the time to understand a client’s individual circumstances and aspirations. We believe it’s important to provide flexibility to meet our clients’ needs, to tailor our solutions accordingly and to dedicate the right people to the job in hand.

For further information on our services or to arrange an initial consultation, please contact: Joe McLean Partner T 0113 200 1506 E joe.mclean@uk.gt.com

© 2011 Grant Thornton UK LLP. All rights reserved. ‘Grant Thornton’ means Grant Thornton UK LLP, a limited liability partnership. Grant Thornton UK LLP is a member firm within Grant Thornton International Ltd (‘Grant Thornton International’). Grant Thornton International and the member firms are not a worldwide partnership. Services are delivered by the member firms independently. 21003_GT_IOD_205x260mm_3.indd 1

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21/10/2011 16:21

The new BMW 3 Series Saloon

Lloyd Newcastle

The Ultimate Driving Machine

LEAN vs MEAN.

THE NEW CLASS-LEADING BMW 3 SERIES SALOON IS A CAR WITHOUT COMPROMISE. Lean? The sleek new BMW 3 Series Saloon might be bigger with more cabin space, but it’s no heavier. Weight-saving measures contribute towards lower emissions, as low as 109g/km in the case of the 320d EfficientDynamics model. With selectable ECO PRO mode standard on all models, it also offers greater efficiency and a highly impressive 68.9mpg on the combined cycle. Mean? One look at the athletic stance and it won’t surprise you to discover that the new BMW 320d EfficientDynamics model also reaches 62mph in just 8.0 seconds. With three new models – Sport, Modern and Luxury – joining the popular ES, SE and M Sport variants, no matter which model you choose, don’t think the specification is mean. They all have Bluetooth, Cruise Control, USB iDrive Controller and a 6.5" colour screen fitted as standard. If you’re leaning towards the new BMW 3 Series Saloon, call Lloyd Newcastle on 0191 2617366 for more information and be one of the first to enjoy a test drive.*

THE NEW BMW 3 SERIES. JOY WINS. Lloyd Newcastle

Fenham Barracks, Newcastle Upon Tyne Tyne & Wear NE2 4LE 0191 2617366 www.lloydnewcastlebmw.co.uk Official fuel economy figures for the new BMW 320d SE Saloon: Extra Urban 74.3mpg (3.8l/100km). Urban 48.7mpg (5.8l/100km). Combined 61.4mpg (4.6l/km). CO2 emissions 120g/km.

BMW EfficientDynamics reduces BMW emissions without compromising performance developments and is standard across the model range. The new BMW 3 Series Saloon range from £24,880 on the road. Model shown is the new BMW 320d Sport Saloon. On the road cash price is based on manufacturer’s recommended retail price and includes 3 year BMW Dealer Warranty, BMW Emergency Service, 12 months’ road fund licence, vehicle first registration fees, delivery, number plates and VAT. *Test drive subject to status and availability.

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20/01/2012 15:20