BQ North East Issue 19

www.bq-magazine.co.uk

ISSUE NINETEEN: AUTUMN 2012

FULL THROTTLE The global rise of a car parts pioneer PSYCHED UP Industrial backdrop forges high-end fashion LASTING LEGACY The untold story behind a technology giant SITTING PRETTY The furniture creatives with designs on success

POWER PLAY

How using smart tactics to beat soaring energy and fuel bills created one of the region’s fastest growing firms BUSINESS NEWS: COMMERCE: FASHION: INTERVIEWS: MOTORS: EVENTS

NORTH EAST EDITION

Business Quarter Magazine

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BUSINESS QUARTER: AUTUMN 12: ISSUE 19 Unemployment is an unacceptable 2% above national average in the North East, with one in five who are in work getting less than a living wage. Yet businesses to their credit are making a fist of things. The region looks determined to be a pacemaker in recovery, now that doubledip recession seems to be passing. So we’d like you to meet in this issue Geoff Thompson, Steve Cochrane, Dan Ziglam, Elliot Brook and Mark Joynson and his family – enterprising spirits all, showing diversely why our region may be withstanding this recession better than previous ones.

Geoff recently put his young South Tyneside company Utilitywise on the Alternative Investment Market, a first float from this region for five years at a time when many might prefer to keep their heads beneath the parapets till all financial flak around us fades.

Geoff’s response from investors in the City supports his optimism. Utilitywise, after all, is a creature of its time, making money itself by saving money for others.

Dan and Elliot personify benefits coming now from closer working relations between business and our universities. Incubator reared at Northumbria University, their furniture and lighting design firm Deadgood, which offers prospects also to many other designers besides themselves, is progressing on two fronts: Newcastle and London. They also represent another trend we want more of: young people from outside our region who graduate here then decide the North East is ideal to run a business from. The remarkable Steve Cochrane has achieved with his company Psyche the once unbelievable; placing Middlesbrough alongside London and Leeds as a paragon of fashion retail.

While many department stores elsewhere are closing, he finds a way of attracting external investment to grow the customer base. He shows further initiative by planning a four star hotel he reckons Teesside badly needs.

Unfortunately, other Middlesbrough retailers lacked his enthusiasm when he championed the proposal that the borough should introduce a business improvement district – a BID such as Newcastle’s NE1, whose Live

after Five campaign to liven the city’s centre is estimated now to have put £157m more into its economy. Perhaps if near neighbour Darlington’s BID shows similar benefits, Steve’s fellow traders may think again.

The Joynsons, with multi-millionaire Graham Wylie, have exploited high-tech and turned an office equipment shop into a £45m a year IT solutions firm, with maybe even more yet to come. And on high technology we showcase also in this issue the Nasdaq-listed Gateshead firm Sevcon, capturing global attention with its advances in electric vehicle know-how.

In counselling corners of this BQ, Jonathan Brown at UBS Wealth Management explains the benefits of shrewd business planning. And David Simpson, senior client partner at Coutts in Newcastle, sketches the background to his bank’s newest entrepreneur research which, at publication on November 12, will emphasise what anyone planning to exit from a business ought now to consider, such as: It takes far longer to build a fulfilling lifestyle than many anticipate: entrepreneurs tend to overestimate how quickly they can settle on an enjoyable career after selling up.

The process is more challenging than many imagine: plenty of money and time don’t necessarily make it easy to find a fulfilling lifestyle post-exit, and; Living with uncertainty is part and parcel of life post-exit: few entrepreneurs anticipate the extent to which their plans may not progress as they thought, or that they may have to deal with more failure than they did before.

And won’t that apply to many of us, business owners or not? Thanks all round, then, for timely advice.

Meanwhile, we are delighted to announce the launch this quarter of BQ Breakfast, our new digital daily news service which reaches thousands of businesses across the region every morning. It’s been warmely received so far and - if you haven’t already - would urge you to give it a whirl via our webite, www.bq-magazine.co.uk Brian Nicholls Editor

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CONTACTS ROOM501 LTD Christopher March Managing Director e: chris@room501.co.uk Bryan Hoare Director e: bryan@room501.co.uk George Cheung e: george@room501.co.uk Euan Underwood e: euan@room501.co.uk EDITORIAL Brian Nicholls Editor e: b.g.nicholls@btinternet.com Andrew Mernin e: andrewm@room501.co.uk DESIGN & PRODUCTION room501 e: studio@room501.co.uk PHOTOGRAPHY KG Photography e: info@kgphotography.co.uk Chris Auld e: chris@chrisauldphotography.com ADVERTISING For advertising call 0191 537 5720 or email sales@bq-magazine.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, November 2012. room501 publishing Ltd is part of Business & Enterprise Group, the UK’s market leading business improvement specialist. www.business-enterprise.net

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

BUSINESS QUARTER |AUTUMN 12

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J 99g/km CO2 J 74.3mpg (combined)

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MINIMALISM Official fuel economy figures for the MINI Cooper D Hatch: Urban 67.3mpg (4.2l/100km). Extra Urban: 80.7mpg (3.5l/100km).

Combined 74.3mpg (3.8l/100km). CO2 emissions 99g/km.

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MINI Business Partnership YOUR COMPANY BENEFITS.

*Offer available to business users only. Figures exclude VAT. Based on a 36 month Contract Hire agreement for a MINI Cooper D Hatch with a deposit of £954.00 plus VAT, a contract mileage of 30,000 miles and an excess mileage charge of 7.11 pence per mile plus VAT. Model shown features optional extras: 17” Infinite Stream Alloys £1,130, White Bonnet Stripes £80 and White Indicator Lenses £60. Vehicle condition charges may apply at the end of your agreement. Subject to status and in the UK only (excl. the Channel Islands). Individuals must be 18 or over. A guarantee may be required. The amount of VAT you can reclaim depends on your business VAT status. Rentals may change if VAT rate changes during agreement. Hire provided by BMW Group Corporate Finance. BMW Group Corporate Finance is a trading style of Alphabet (GB) Limited, Europa House, Bartley Way, Hook, Hampshire, RG27 9UF. Offer expires 31 December 2012.

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CONTE BUSINESS QUARTER: AUTUMN 12 PSYCHED UP AND SOARING

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Features 26 POWER PLAY BQ talks to the driving force behind fast growing Utilitywise, Geoff Thompson

36 CAR PARTS PIONEER How a Gateshead firm is turning heads across the globe

44 PSYCHED UP The man who brought high-end fashion to an industrial borough

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54 BUSINESS LUNCH Mark Joynson relays the untold story behind tech giant TSG

78 DESIGNS ON SUCCESS An inside view of a dead good North East creative empire

84 THE X-IT FACTOR An experts view on the hows and whens of exiting a business

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ADMIRING FROM A DISTANCE

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TENTS NORTH EAST EDITION

DESIGNS ON SUCCESS

32 COMMERCIAL PROPERTY Deals and developments that are shaping the North East skyline

Regulars

60 MOTORING Joe Olabode attempts to tame a growling Porsche

64 WINE Featuring guest reviewer Adam Munday, GM of Hotel Indigo in Newcastle

08 ON THE RECORD Plan for the future takes shape as job market shows mixed picture

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

24 AS I SEE IT Is business planning an art or a science?

Jonathan Brown reports

66 EQUIPMENT

78 A CAR WITH SIZE AND SUBSTANCE

A new breed of vehicle is born in the luxury market

72 FASHION Enter the mysterious world of the brand with no branding, Loro Piana

96 A BIT OF CHAT With BQ’s backroom boy Frank Tock

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60 BUSINESS QUARTER | AUTUMN 12

ON THE RECORD

AUTUMN 12

Plan for the future takes shape, mixed picture in job market, banks move on lending, port’s performance picks up, tasty dish for fish and chips supplier, and law firm hits five in a row >> Flights stepped up

>> On go the thinking caps A high profile team of private-sector led thinkers is projecting the North East’s economic future up to 2030. Through the North East Local Enterprise Partnership (NELEP) they will also, propose for the Government strategic interventions to be applied over the next five years.

Less than six months after the abolition of regional development agency One North East, a working group has been announced under chairman Lord Andrew Adonis, former Secretary of State for Transport and Minister for Schools. It has to report to the Government before the next Budget.

Members include: Will Hutton, former editor in chief of the Observer, now chairing the Big Innovation Centre and principal of Hertford College, Oxford; Heidi Mottram, chief executive of Northumbrian Water, and member of the CBI’s national infrastructure panel; Lord Don Curry, chairman of NFU Mutual; Bridget Rosewell, who chairs Volterra Partners (an economic consultancy); and the Bishop of Durham Justin Welby.

A panel of notable economists and academics will also report. Deputy prime minister Nick Clegg, who will receive all findings, says: “This region is a place where business can thrive.”

The review will challenge existing assumptions and approaches, he added. NELEP has invited submissions from Tees Valley Unlimited, the region’s other LEP, and from bodies representing the civil engineering industry - one of the region’s worst suffering sectors.

LEPS are now being allocated their own London civil servant under government aims to see the partnerships become more effective. They have also been promised more state funding £125,000 for this year and £250,000 for each of the next two years subject to a matching by the private sector.

>> UNW goes global A new partnership between North East accountancy firm UNW and BKR International offers UNW greater international contacts and resources. BKR is a top 10 global accounting body, with 145 member companies in more than 70 countries. UNW, based at Citygate in Newcastle, has grown substantially over the past three years.

>> Jobs scene brighter PMI Composite Output Index, SA (50 = no change) 65 60

>> Lion’s share for region

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The North East region is getting £120m from the £1bn total of state investment the Government has allotted under round three of the Regional Growth Fund (RGF).

The North East LEP (NELEP) gets £30m for an infrastructure fund inviting bids from companies and public sector organisations. Tees Valley Unlimited (TVU) secured £15m for two funds – one to help smaller firms, the second to attract foreign investment.

Out of six regions the North East in total gets support for 25 projects and programmes, the nearest to that being the North West with 21.

Firms benefiting on NELEP territory include: Five-Quarter Energy, Blyth; Ebac, Newton Aycliffe; Actem (UK), Peterlee; Applied Superconductor, Blyth; Caterpillar, Peterlee; CAV Aerospace, Consett; Fabricom Offshore Services, Newcastle; J Barbour & Sons, Jarrow; Komatsu UK, Chester-le-Street; NSK Bearings Europe, Peterlee; Offshore Group, Newcastle; SCM Pharma, Prudhoe; Siemens Transmission and Distribution, Hebburn; TRW Systems, Houghton-le-Spring.

Firms benefiting in TVU’s area include: Nifco UK, Eaglescliffe: Marlow Foods, Stokesley; Sabic UK Petrochemicals, Wilton; Chemoxy International, Middlesbrough; Prom Chem, Wilton; SNF Oil and Gas, Stockton; PD Teesport, Middlesbrough; Tees Valley Unlimited, Strategic Site Development; Magma Global, Middlesbrough; High Integrity Products Group, Hartlepool; Tata Steel UK Rail Consultancy, Middlesbrough.

Every taxpayer’s pound invested is projected to leverage £6 from the private sector.

BUSINESS QUARTER | AUTUMN 12

Flights between Newcastle and Aberdeen have been stepped up from four to five daily by Eastern Airways. Also at Newcastle, Easyjet is introducing a twice weekly link with Jersey from next March.

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50 45 40 35

All UK North East England

30 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Sources: Lloyds TSB, Markit

Reports are mixed about job fortunes in the North East. Lloyds TSB says the rate of job cuts at North East firms in September was the fastest in three months - sharper than the UK average. But KPMG reports a rise in permanent jobs in the North generally.

Craig McNaughton, area director for Lloyds TSB Commercial in the North East, says: “A rise in new business in the North East raises hopes the current downturn in the region may be ending. But further growth in demand will be needed.”

Meanwhile, new figures show the leisure industry is continuing to suffer. More than a third of pubs and restaurants in the region >>

ON THE RECORD are “at risk of failure” within 12 months, the insolvency trade body R3 fears. But retail administrations fell 15% during the last quarter, Deloitte says.

Official figures show unemployment in the North East is 2% above the national average at 9.9%. While fewer are now out of work, many new jobs are part-time and lower paid.

And with summer seasonal work likely to recede now the trend could be affected.

The statistics may also conceal cases of people redundant but who have not started claiming jobseeker’s allowance. Neil Foster, policy and campaigns officer for Northern TUC, says: “Part-time work may take people off the Government’s job seeker lists. But it barely provides enough household income to keep heads above water.” Jonathan Walker, head of member relations at the North East Chamber of Commerce, says however: “Unemployment figures are heading in the right direction.”

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Government’s Funding for Lending Scheme, drawing down £1bn initially from the Bank of England.

The group pledged to lend this within weeks through discounted lending to SMEs, midmarket companies and homebuyers.

It had already launched its own discounted offer under the same scheme.

A £60m pot of Regional Growth Fund investment and bank finance launched in October will provide lending for small, micro and social enterprises around the country.

The Government’s £30m is being matched by the Co-operative and Unity Trust Banks.

The aim: to create or safeguard more than 8,000 jobs over six years.

Spruced up: Greenwells Quay, Sunderland

>> Technology link Sunderland will be wired into a network of some of Britain’s most influential and progressive cities, universities and venture capital networks, thanks to a £300,000 technology donation. Technology giant Cisco UK has given the city council the funding to link it with Cisco’s National Virtual Incubator (NVI) – a public technology network connecting sites by IT.

>> Banks move on lending HSBC intends to approve at least 80% of applications for finance from SMEs. The bank provided £771m of gross new lending to North East SMEs during Q1 and Q2 this year.

The figure – greater than last year - makes the North East its third largest UK region in terms of new lending.

David Beaty, regional commercial director for the North, says: “We remain committed to helping more SMEs in the North East.”

Even so, one in three small firms report inability to secure finance in the past year, and only a few get what they ask for, a survey of 1,000 SMEs by Bibby Financial Services suggests. Lloyds in September was the first bank to access funding under the

BUSINESS QUARTER | AUTUMN 12

>> Port picks up Port of Sunderland, enjoying recent investment, has had its busiest year since Wearside’s demise of shipbuilding and closure of collieries.

Docks traffic is up by some 84% year on year. A £500,000 crane built by Liebherr nearby is enhancing facilities that include a roll-out ro-ro ramp, heavy lift crane pad and a loadout quay for heavy lifts.

Speculation is rife that Nissan, after a 26 year break, may resume exporting from Sunderland as well as Port of Tyne.

>> Sharp practice The second of three installations in an £80m-plus investment has been completed, enabling Narec at Blyth to run the biggest blade-testing hub in the world for wind turbines. It can now test 100m blades – double the size previously possible.

were up £39,000 to £411,195. The business, with 118 staff, cuts energy costs by driving delivery vehicles on old cooking oil.

>> On the rails Nomad Digital, the Newcastle provider of wireless solutions to transport, is listed seventh in the latest list of 100 fastest growing private technology firms.

Its turnover rose 120% last year and it expects to raise its £19m sales by 30% this year.

>> Thailand a rich pasture Exports from the North East hit another record 12 months at the end of June – giving £14bn.

That was 7.8% up on previously, despite a dip in the latest quarter. Figures from HM Revenue & Customs highlight Queen’s Award winning Bonds, the North East foundries group, now selling more than half its steel castings to 23 countries. Its workforce is up from 175 to 220.

The USA is top destination for North East goods. Thailand is fast growing. Some £13m of state funding will help 10,000 more firms via UK Trade & Investment. Up to £9m will go towards SMEs.

>> Five wins in a row Commercial law firm Muckle LLP took top award at the North East Insider Dealmakers Awards for an unprecedented fifth time running.

It has also won Regional Law Firm of the Year award at The Lawyer Awards.

>> 40 years young Blyth based Weir Insurance is marking its 40th year in business with intensified market coverage in Alnwick, Berwick and Hexham, it has announced.

>> Tasty dish

>> Box gets bigger

Fish and chips remain a popular staple in these harder times, financials of Gateshead chip shop supplier Henry Colbeck suggest.

Sales rose by £1m to £40.5m last year. Profits

Gibraltar based car insurer Insurethebox, which opened at Quorum Business Park on North Tyneside with 20 staff in 2010, now employs 200 with 70 more to come soon.

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FOR EVERYTHING YOU NEED TO KNOW ABOUT MAKING THE SWITCH TO ELECTRIC VISIT whynotelectric.com Charge your Car does not offer tax advice which will be dependent on individual circumstances, we recommend that you consult your own accountant for tax advice.

NEWS

AUTUMN 12

Train project looks to get businesses on board, troubled bakery changes hands, Barbour’s boomtime continues, EEF man makes his mark, and a stark warning for even the smallest firms >> Hitachi calls for suppliers The Seaham based Business & Enterprise Group (B&E) is seeking suppliers of equipment for the £4.5bn train assembly plant under way at Newton Aycliffe.

Appointed by Hitachi and Merchant Place Developments, B&E is gathering expressions of interest from a range of equipment sources vital to the project, including storage, lifting, weighing and actual assembly. The Intercity Express Programme to provide new rail carriages for East Coast and Great Western main lines by 2017 could bring more than 900 jobs and involve exporting.

Nicki Clark, B&E’s chief operating officer, describes it as “an enormous opportunity for firms to be part of a new global supply chain.”

Interested businesses can contact the group (tel 0191 426 6408). Geoff Hunton, director of Merchant Place Developments which found the site for Hitachi and is helping drive its programme, says North East suppliers will get fair consideration.

The world’s biggest privately financed passenger rolling stock deal, the Intercity Express Programme for Great Western Mainline, has now been completed, ensuring a Newton Aycliffe go-ahead. PwC is lead financial advisor to the DfT on the project over five years.

Existing Intercity high speed trains (HST) on the Great Western and East Coast Main lines will be replaced by a 92-strong fleet of the new faster, higher capacity trains.

Paul Mankin, PwC’s corporate finance partner in Newcastle said PwC earlier advised on infrastructure such as the £1.15bn M25 deal, a US$3.9bn desalination scheme in Australia and the €1.8bn R1 road in Slovakia.

The team also helped deliver £2.1bn of long term project debt from European and Japanese lenders. The new trains should raise peak capacity by 34%.

>> Bakers battle on Joint administrators of KPMG have sold the troubled Peters Bakery of Durham to Cooplands of Scarborough, safeguarding 208 jobs. Altogether 22 shops are saved, and 129 store staff transferred.

The factory and headquarters at Dragonville see 69 staff transferring. Ten other staff stay on in a transferred retail van business.

But 34 stores were closed, 149 jobs lost. Four staff in distribution and two at head office were made redundant.

Meanwhile a second bakery, Tindale and Stanton of Burnopfield, is back in business following a fall into administration. Four long-term managers there now expect to get the 38-year-old firm back into profit within a year, building on its piemaking reputation and introducing new lines.

Administrators cut 25 jobs while the new team, by partly remortgaging homes to raise capital, expect to save 82 other jobs. The firm

BUSINESS QUARTER | AUTUMN 12

once employed 300 and had sales of £14m.

Revenues now are £3.5m, but the rescuers believe contracts are there to be won.

>> Start-ups galore Business start-ups are at a peak in Sunderland. Q2 recorded 171 – more than ever before. In 2010 the city had the most start-ups of any UK region.

>> Lawyers may merge The North East’s biggest law firm Dickinson Dees is discussing a possible merger with South West lawyers Bond Pearce.

Jonathan Blair, managing partner of Dickinson Dees, said: “Bond Pearce’s vision is to compete as a top 30 UK law firm. Dickinson Dees’ vision is to be, by 2020, a top 20 UK law firm.

Our strategies, cultures, sector capabilities and geographic footprints seem sufficiently

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complementary to warrant consideration of whether, in a rapidly consolidating market, a merger would facilitate the respective strategies.”

Dickinson Dees has offices in Newcastle, Tees Valley, York and London. Bond Pearce operates from Bristol, Plymouth, Southampton, Aberdeen and London. The outcome would be 125 partners and more than 450 lawyers.

Out in front: Claire and David Glynn saw nothing to match

>> New Aspect to software Sunderland based 4th Aspect, a software specialist in search engine optimisation, plans expansion after taking its product to market successfully.

The company at Evolve business centre was set up by husband and wife Dave and Claire Glynn. It has received over £200,000 of funding to prove its concept and invest in the infrastructure and team needed to get the business up and away.

>> Oldest golf club scores Cleveland Golf Club, which boasts Yorkshire’s oldest course, has achieved a six figure settlement in a legal negotiation on its behalf by Teesside lawyers Endeavour Partnership. The course and clubhouse will now be improved. The club is celebrating its 125th anniversary and Frank Spenceley, for the trustees, says the club’s future is now secured.

>> Horses for courses A North East manufacturer of equine supplements has broken into the >>

“The best move I ever made.�

Join the world-class companies based at Quorum Business Park in Newcastle. Here you’ll find free sports facilities, on-site events, plenty of parking and subsidised public transport, all less than four miles from Newcastle city centre. No wonder businesses at Quorum attract and retain so many of the best people.

www.quorumbusinesspark.co.uk

NEWS

AUTUMN 12

Mongolian market with a £10,000 order.

Four pallets of supplements from Equine Products UK have gone to the Mongolian capital Ulan Bator. The supplements are bought by herdsman boosting tourism with their feats in an ancient festival to celebrate heroism and masculinity which dates back to the days of Genghis Khan.

>> Cleaning up A cleaning firm has doubled its workforce in 12 months through acquisition and contract wins - including work on the new official home of English football. MJF Cleaning, of Darlington, is progressing in commercial, industrial and construction cleaning.

>>Newsmakers >> Boomtime Barbour Annual sales of family owned J Barbour and Sons are up more than a third, and profits by more than half.

While the South Tyneside clothier employing nearly 600 people continues to supply waxed jackets and other countrywear, it is also winning younger customers with coloured quilted jackets.

Sales are now £121.6m, almost double in five years, with profits £17.25m.

>> Yorkshire bound Business law firm DWF has advised Attends Healthcare on relocating its UK head office from Newcastle to Wakefield, said to be closer to its core base.

>> Lawyers score a treble Law firm Ward Hadaway has completed a hat-trick of deals for marketing services provider Communisis plc.

It has advised on acquiring a 49% stake in London agency The Garden Marketing Ltd. The deal follows two acquisitions Ward Hadaway advised Communisis on in May purchase of specialist software production agency Kieon and the acquisition of the trade and certain assets of specialist social media agency Yomego. >>

BUSINESS QUARTER | AUTUMN 12

Andy Tuscher is the new regional director of EEF North. He was previously head of external affairs for Yorkshire and Humberside region from 2010. A Sandhurst graduate, he served with the Army in a number of theatres and operational tours and has also worked for Business Link.

John Wilson (above) joins Newcastle University Business School on November 12 as director, leading the school and its 2,800 students of up to 80 nationalities from new £50m headquarters on Barrack Road. Professor Wilson was previously professor of strategy at the Management School of Liverpool University.

Lucy Winskell is now a non-executive director of five subsidiaries of North East Access to Finance (NEA2F). A former Newcastle Law Society president and current pro vice-chancellor at Northumbria University, she has extensive board level experience. She is deputy chairman of Business Enterprise UK Ltd and a former non-executive director of the North East Regional Investment Fund.

Kate Priestley now chairs Northumberland Tourism following a career in the NHS and is a council member of Newcastle University.

Olivier Bonte, originally from Lille in France, is now restaurant manager for Darlington’s five star Rockliffe Hall hotel. He has previously worked in North Yorkshire (Swinton Park and the Black Swan, Helmsley) and Cambridge (the Michelin two star Midsummer House restaurant). Jordan Will has been appointed events operations manager. Originally from Aberdeen he has worked at Hilton hotels and the Savoy in London.

Gavin Prior who, for six years was operations manager of the Metrocentre at Gateshead, is now general manager.

Carl Swansbury, of Ryecroft Glenton Corporate Finance, was named Young Dealmaker of the Year at the Insider Dealmakers Dinner in Newcastle. He is 29.

Robert Johnson, 19, from Redcar, is one of the UK’s most able apprentices of any trade. He’s in the final of a Euroskills competition in Belgium. He studies plastering at Redcar & Cleveland College and is apprenticed to Classic Plaster Moulds, his father’s firm in Middlesbrough.

Steve Cook, 41, a Yuill’s site manager of Wolviston Village, has been named regional winner in National House Building Council awards.

Matthew Phillippo, 18, has been named the best plumbing apprentice in the North of England by the Chartered Institute of Plumbing and Heating Engineers. He lives in Newton Aycliffe, works for K Hewitt & Co in Bishop Auckland, and studies at Bishop Auckland College.

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AUTUMN 12

COMPANY PROFILE

Supporting business owners throughout the north east The north east’s largest specialist family law firm is striding into its third year with its head held high after a successful first two years as a niche family practice.

Silk Family Law’s 10-strong team of specialist family law practitioners helps separating and divorcing couples resolve financial issues and issues relating to children. The team is seeing growing demand for advice on cohabitation agreements and disputes, as well as pre-and post-nuptial agreements – particularly among business owners seeking to reduce the risks to their business if their marriage were to break down.

Silk, which has offices near the Quayside in Newcastle, puts its success down to the firm’s focus on a single specialist area of law; the strength of its experienced team; and a continued

commitment to providing top quality service and support to every client.

Partner and barrister Ian Kennerley says that the team’s reputation and consistently high level of service is to thank for the steady stream of referrals from both clients and professional service providers that has helped the firm exceed its growth targets for the year. That same focus on service has earned the firm a commendation as ‘one of the best England has to offer’ in the annual Chambers UK legal guide.

Silk also received high praise in the 2012 Legal 500 guide, published recently, which ranks law firms and lawyers based on client and peer feedback.

In a three-tier ranking system, Silk was placed in the top tier of family law providers in the north of England, as a firm that has “quickly established itself as a market-leading specialist family law firm, with a focus on high-value divorce cases.

The team is ‘incisive, and the quality of work extremely high’.”

www.silkfamilylaw.co.uk

BQ Breakfast

The new indispensible companion to Business Quarter Magazine in print, BQ Breakfast is a new daily digital news service providing comprehensive overviews of the days breaking news together with features and news analysis, business stories and events.

Reaching a targeted audience of 46,000 North East business directors and owners on a daily basis, BQ Breakfast will aim to inspire, enlighten and empower, reporting on relevant national and regional business stories for our readers at the start of each day, interweaving daily news with additional online editorial compiled by our award winning journalists.

Register now at www.bq-magazine.co.uk to receive your early morning update.

BQ Breakfast, the only way to start your day.

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BUSINESS QUARTER | AUTUMN 12

NEWS

AUTUMN 12

Communisis has an option to buy the remaining 51% of TGML for around £600,000. Leeds-based Communisis also has operations in Newcastle and 10 other UK cities and towns.

>> Hargreaves energised Durham-based energy and fuel company, Hargreaves Services, shows record gains of £54m in preliminary results for 2012.

The Esh Winning group reported a 15.6% rise in pre-tax profits, and nearly 25% rises in revenue for the year to last May. It employs 2,500 people and trades with Russia, the USA and South Africa.

>> No barrier to growth

>> Jon Bon sees the light American rock band Bon Jovi have agreed to perform at Sunderland’s Stadium of Light next year, becoming the latest global superstars to sign up to the stadium’s diversification as a concert venue.

Bon Jovi will hit the road in 2013 to fill stadiums and arenas worldwide with Bon Jovi: Because We Can – The Tour. When it pulls into the North East next June it will no doubt deliver a considerable economic boost to Wearside as thousands of rockers young and old descend on Sunderland.

Gary Hutchinson, Sunderland AFC’s commercial director, said: “We are absolutely thrilled to have been chosen as a venue for a tour of this magnitude. Bon Jovi are one of the world’s top live bands.”

>> Cause to celebrate Simpsons Malt enjoys its 150th anniversary this year with sales up from £109m to £134.5m. Managing director Tim McCreath is confident that agriculture and whisky distilling will remain resilient. “The UK brewing sector as a whole remains flat,” he says.

“But it is still an important sector.”

The Berwick based family firm showed better than expected pre-tax profit, slightly down to £8.8m from £9.3m.

In 2011 the group acquired John Guthrie Ltd, of Angus. It also spent £3m-plus on new facilities at Berwick.

BUSINESS QUARTER | AUTUMN 12

Tyneside industrial paint specialist Barrier has acquired the insulation and architectural services division of Arc Industrial Services in Middlesbrough.

>> Faster still The Chester le Street electrical repair, warranty and servicing firm Pacifica Group has preserved almost 60 jobs and edged towards £20m turnover with the purchase of the Normanton, Yorkshire, based Hi Way Express Home Delivery from administrators of Hi Group.

Pacifica was named the North East’s Fastest Growing Company in 2011.

>> Pipe of plenty Barrier Ltd, the Wallsend industrial paintings and coatings specialist, has completed one its largest ever pipework projects – 18km for a gas installation contract in South Wales.

>>Twin boost in renewable energy The North East’s prospects as a strategic centre of renewable energy are being doubly boosted. Air Products is to build and run what may be the world’s largest renewable energy plant at Billingham. And, at Newton Aycliffe, a newly announced biogas energy plant will be constructed to produce

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1.4MW of electricity yearly from food and farm waste.

The Billingham plant will use advanced gasification energy-from-waste technology with 50MW capacity - enough renewable electricity to power 50,000 homes. Up to 350,000 tonnes of non-recyclable waste from landfill a year will be diverted after start-up in 2014. Up to 50 jobs will arise, plus potentially 700 during the construction phase.

John McGlade, chairman, president and chief executive officer of Air Products, promises: “This pioneering clean-energy technology offers a sustainable solution to the UK’s waste management strategy.”

In Newton Aycliffe area, a new biogas energy business is also set to contribute to renewable energy production.

Emerald Biogas will reduce the region’s carbon footprint through an anaerobic digestion facility producing up to 1.4MW of electricity a year from food and farm waste. Emerald’s directors have a background in farming, waste and recycling. Brothers Antony and Adam Warren run a family-owned animal by-product, food waste collection and recycling business. Ian Bainbridge owns a farming, land and resource management and plasterboard recycling business.

Business advisors UNW guided Emerald Biogas on £8m of financing with law firm Ward Hadaway legally advising.

>> Bugs under attack Muckle LLP has advised Rivers Capital Partners on its first investment in biotechnology industries, enabling a North East university spinout to develop drugs tackling super bugs. Rivers has invested in Demuris, a Newcastle University bio-tech spinout developing the antibiotics to tackle MRSA, E-Coli and Psudomonas aeruginosa.

>> Setting the world on fire CVO Fire is meeting orders globally from Newton Aycliffe and growing into one of the UK’s top fireplace designers >>

AUTUMN 12

COMPANY PROFILE

North East futures look bright Deloitte’s UK Futures report was published this autumn, and it outlined the ways in which we believe business can ignite the North East, and UK, economy.

As part of UK Futures, Deloitte is currently studying 1,000 UK firms with revenues between £30million and £1billion, which have collectively generated a staggering 55 per cent growth in revenue from 2008 to 2011.

These predominantly privately-owned companies added nearly 170,000 jobs to an employment base of 510,000 over this period. They now account for 7.8 per cent of GDP and are likely to have played a very important role in allowing the economy to keep its head above water in recent years.

There is no denying that our region has been hit particularly hard by public sector cuts. However, the UK Futures report contained some remarkably encouraging evidence that shows certain businesses in the North East are growing at a remarkable rate.

Of the 1,000 businesses examined, 23 came from the North East – a figure in line with expectation.

What was exceptional news, though, was the rate of growth these companies were demonstrating – 16.6 per cent over the past three years, higher than the national average of 15.7 and a better rate of growth than any other regions outside London.

These 23 companies have shown three-year growth worth £1.4bn, creating 3,000 new jobs in doing so. This puts the North East in the ‘overweight’ category, where growth is exceeding what is expected of the region.

One such company is Newcastle’s Pearson Engineering, which employs 270 people and has seen revenues top £207m last year, thanks in the main to a dedication to innovation, a strong focus on R&D and an ability to tap into global trends.

The North East is home to a number of these active businesses which have continued to invest in innovation throughout the recession and have been doggedly pursuing growth and seeking opportunities despite the economic headwinds.

More broadly, UK Futures is a long-term programme. It is Deloitte’s bid to capitalise on business expertise across a range of sectors, to

Paul Feechan, Office Senior Partner, Deloitte

The North East is home to a number of active businesses which have continued to invest in innovation throughout the recession promote a new business “ecosystem” based on entrepreneurial spirit, diverse ownership models, international consumer markets, and international business-to-business services.

We have looked at what makes some North East companies successful, the challenge is to help others to replicate that success for the benefit of the entire economy.

We believe that North East business can play a key role in the rejuvenation of the UK economy, but that a period of significant investment and reinvention must take pride of place as part of that.

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We are faced with low levels of public trust, an eastward shift in global demand, corporates holding a £750bn cash pile they’re unwilling to invest and record levels of public and personal debt.

All of this points to the need for a range of measures to encourage and help business to take up the mantle and increase levels of investment.

The sustained recovery that we need cannot, currently, be driven by the public sector, or by consumers who are tightening their belts faster than ever.

It is clear that more innovation is required to meet the needs of critical international markets, which are in the midst of profound, ongoing change.

North East business has so much to offer the export markets and competing at that level has to be the aim.

In recent years, the North East has gone some way to rebuild and diversify its economy. Alongside our traditional strengths in manufacturing, automotive and energy the Deloitte research shows the region is also cultivating a range of diverse and exciting businesses in sectors that receive less recognition. These business success stories come from a range of backgrounds including consumer related businesses, and also businesses in the services sector which is a sector under-represented in the North East.

These exciting businesses represent a real bright spot in the UK economy – now we need to learn from, and replicate, their success.

Paul Feechan Office Senior Partner at Deloitte in Newcastle 0191 261 4111

BUSINESS QUARTER | AUTUMN 12

NEWS

AUTUMN 12

and manufacturers.

Clients include hotels such as Marriott, InterContinental, Crowne Plaza , Banyan Tree and the Connaught. Also, in London it has installed at Terence Conran’s Lutyen’s restaurant and at the DoubleTree by Hilton Hotel on Southampton Row. It has provided for Gleneagles Hotel in Perthshire.

It is working in Greene King and JD Wetherspoon bars and pubs, supplying domestic customers and house builders around Europe, and did Marco Pierre White’s restaurant in the Fairmont Hotel, Abu Dhabi.

Managing director Andrew Munro, and financial director Christine McLoughlin took the company over in 2007, since then turnover has risen by 80% giving work to 17 people.

>> Flying start Gas engineer Mark Jones, 29, has set up his own gas engineering firm on the strength of an Eaga Trust allotment. Mark worked for Eaga then Carillion for five years before being made redundant this year. His verdict on the start-up scheme: “Invaluable.” www.eagatrust.com

>> Working for wealth Henderson Insurance Brokers Teesside has acquired Arlington independent financial advisors, which handles the interests of many wealthy North East individuals and businesses through a £100m portfolio. It will now be known as Henderson Private Wealth.

>> Easier to tender A Quick Quotes system is being introduced to simplify the quotation procedure local businesses go through in bidding to supply goods and services below the value of £50,000 to North Tyneside Council. The system is only for contracts let directly by the council. It does not include work done through Kier North Tyneside, such as housing repairs and maintenance, office maintenance, and capital construction. www.nepoportal.org

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Work campaigner: Chris Quickfall is creating jobs to counter redundancies

>> Job openings E-Quality Learning, the Tyneside firm giving online and onsite training support to individuals with disabilities, has created 20 places in its workforce and plans more. Managing director Chris Quickfall hopes to encourage some of the 138 workers being made redundant at Remploy factories across the North East.

>> Housing drag Profits are down at Durham-based Esh Group as it absorbs early costs of expanding into Yorkshire and Cumbria. Its £170m turnover in 2011 was practically unchanged. The Bowburn, County Durham, construction group says its housebuilding arm, Dunelm Homes, continues to impact negatively. It has also been caught up in a compensation row over flood damaged homes at Newburn, Newcastle.

>> Businesses, beware Even tiny businesses risk penalties of £2,000-plus a year for failing to file Paye tax returns online and on time, under new proposals put forward by the taxman.

Newcastle accountants Robson Laidler LLP warn that by October 2013, HM Revenue and Customs wants all employers to file pay and tax details of employees online as wages are paid, instead of at the end of a tax year.

>> Women reorganise Women into the Network (WIN), a promoter of women’s enterprise, is now run within the North East Chamber of Commerce (NECC). It is being led by Nickie Gott, founder of events management firm She’s Gott It! She is also an NECC council member. The North East Woman Entrepreneur of the Year Awards will now be run through the NECC website. www.necc.co.uk/womeninbusiness

>> Stone scales the heights Stone Technical Services, the Darlington firm that protects St Paul’s Cathedral in London from lightning strikes, has opened an office in Scotland in an ongoing UK expansion.

>> Santa’s called A busy Christmas period looms for Heerema Fabrication Group’s >>

ONLINE: Get the latest North East business news delivered to your desk every morning by subscribing to our new daily alert, BQ Breakfast. www.bq-magazine.co.uk

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AUTUMN 12

COMPANY PROFILE

Skills for the future Despite an increase in apprenticeships the UK’s engineering industry is facing a skills crises. Sunderland College is pioneering a new approach.

Apprenticeships are rising but there is still a skills gap between those leaving education and the highly-skilled workers needed by the engineering industry.

Which is why Sunderland College is pioneering a new approach – and investing in a new skills centre.

The college has been delivering skills development to the engineering sector for over 20 years and has developed the new facility in collaboration with its employer partners.

It’s part of the college’s multi-million pound investment into facilities at several of its centres and is due to open at the Hylton campus in August 2013.

More than 300 of the college’s students will benefit from the investment in the facility which will be designed in response to the industry’s needs to improve engineering training and further provide skilled training opportunities.

Already the number of apprenticeship opportunities is on the rise. Statistics published

by Sector Skills Council for the Advanced Manufacturing and Engineering sectors (SEMTA) show the number of new apprentices entering the sector has grown from 1,270 in 2009 to 2,160 so far in 2012 – a 70% increase over three years.

The building of the new centre should further boost numbers in the North East.

Acting principal of Sunderland College, Nigel Harrett, said: “Employers understand that hiring an apprentice is an investment in the future of their industry.

“But we’ve identified the potential skills gap arising from an ageing workforce and the inherent problems employers face with new trainees not possessing the required skills.

“To address this we’re developing new training programmes and investing in state of the art industry standard equipment, all of which will be delivered in our new engineering centre.

“The centre will be unique to the region. The

Acting principal of Sunderland College, Nigel Harrett, said: “Employers understand that hiring an apprentice is an investment in the future of their industry.

“But we’ve identified the potential skills gap arising from an ageing workforce and the inherent problems employers face with new trainees not possessing the required skills.” apprentices trained at this centre will be the engineers of the future. They will have the skills and training needed to go straight into employment across the region, and beyond.

“Our commitment is to provide quality education and training like no other. We achieve this by working closely with our customers and partners.

“Not only have we achieved consistently higher results than any other college over the last three years, but we have been awarded the quality Matrix

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award for advice, guidance and support three times in a row.”

The new facility will also allow for employers to work with the college to develop industry specific training for employees to make sure they meet industry standards.

Chief Executive of EngineeringUK, Paul Jackson, said: “The UK will need over two million additional engineers over the next ten years, so facilities like this are vital to ensure our future talent pipeline.

“Engineering businesses tell us that the demand for skilled employees exists now. It’s important that training matches the skills needed in industry, which is why Sunderland College’s collaboration with employers is commendable.”

This is vital when there still remains the issue of the future skills gap and an estimated 8,500 skilled workers are due to retire in the next six years.

Sunderland College is again tackling this by hosting a live debate to get those in the industry together and talking.

This has been organised for early next year.

Hosted by Sunderland College and in association with BQ, the debate aims to get engineering and manufacturing companies talking.

Nigel said: “The college is calling on business leaders in the sector to get involved and register their interest to take part now.

“The debate will be of benefit to them, their business, the industry as a whole and we’re keen to speak with as many firms as possible.”

Engineering and manufacturing businesses interested in taking part in the debate should contact Andrew Marshall on 0191 511 6000 or email andrew.marshall@sunderlandcollege.ac.uk

BUSINESS QUARTER | AUTUMN 12

NEWS

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Hartlepool yard, following an order set to create around 200 jobs and provide three years’ work.

The order of undisclosed amount is from GDF Suez E&P UK. It wants four topsides to serve Cygnus gas field development on the UK Southern North Sea – about 10,500 tons of fabrication in all.

>> Fuel supplies to link Greenergy, the UK’s leading supplier of petrol and diesel, has bought assets at the former Petroplus facility on Teesside from joint PwC administrators of Petroplus Refining Teesside Ltd. The terminal at Seal Sands previously served as a diesel storage and supply location.

Greenergy has been supplying its customers from the neighbouring Vopak terminal.

Andrew Owens, chief executive of Greenergy, says the two assets will be integrated. A new rail head is planned.

retraining grants and loans to help set up in business.

The Eaga Trust promoted employee engagement and ownership. But Eaga was later sold to Carillion plc. Now some of its funds are being used to help employees, in line with the Eaga model. Across the UK, almost 7,500 men and women employed

by North East-based Eaga between 1 January 2000 and 21 April 2011 (when it was sold to the building services group) can apply for the £1,000 incentive. So far, fewer than half have.

>> Home on a cloud Catalyst of Tyneside, which specialises in the recruitment of home workers, is entering the IT sector with a cloud based system through Newcastle-based Atlas Infrastructure Management. Owner Paul Wilson says all data is now stored in an offsite centre that staff can reach remotely.

>> Border buy-up

>> Some trucking...

Scottish property agency Rettie & Co has crossed the Border and acquired a business in Berwick. Euan Aitchison there has been renamed Rettie South.

Managing partner of the new business is Rob Taylor who was earlier with General Accident in Halifax and Sanderson Young in Newcastle before joining Rettie’s Melrose office in 2009.

The North East environmental engineering company GT has turned out its first long-wheel base truck, part of a multi-million pound order for an American heavy-duty truck and mining equipment firm. The vehicle, more than 13ft high, was ceremonially handed over to an executive of Ground Force Manufacturing at GT’s Pallion works in Sunderland.

>> Eggs-act fit Tyne valley egg producer Lintz Hall Farm has merged with Sunny Hill Free Range Eggs. Sunny Hill is a Scots firm, similarly family run. Turnover for Lintz Hall, run by the Tulip family for four generations, has risen fivefold since 2007.

>> Eaga to please A trust formed with a national energy efficiency firm to give employees a stake in the business is now offering job support to all ex-employees by way of

BUSINESS QUARTER | AUTUMN 12

>> Feeding the minds French caterer and events company Sodexo has won a £1.5m contract to run Newcastle City Library’s cafe for three years. It already runs conferences and banqueting for Newcastle United and at venues operated by Tyne & Wear Archives & Museums.

>> Airport IT win North East based technology firm Onyx Group has won a five-year deal worth around £3m to manage Edinburgh Airport’s IT infrastructure

>> Car business crashes Joint administrators at KPMG ’s restructuring practice, are seeking a sale of properties and assets belonging to North East Ford dealership Holiways, which sold cars, serviced and repaired at Newton Aycliffe and Bishop Auckland. A trade slump has cost 81 jobs.

>> Hello, goodbye...

The closure of Direct Line’s contact centre serving Green Flag and Churchill at Stockton is costing 500 jobs.

The Royal Bank of Scotland is disposing of the entire company, after received from it a £200m dividend (on top of an £800m payment earlier this year) as profits 7% up were announced.

>> QUOTE OF THE QUARTER

Amazingly, the level of Air Passenger Duty paid by passengers at Newcastle Airport this year will reach £49m – almost as much as the entire turnover of the airport. This tax is counterproductive, and it should be abolished as soon as possible Ian Dormer, national chairman of the Institute of Directors and North East business leader, in the Sunday Telegraph

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Above

Beyond

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www.hay-kilner.co.uk 0191 232 8345

COMPANY PROFILE

AUTUMN 12

HSBC steps up its support for North East businesses At a time when many banks are reigning in their lending to businesses, new figures and a range of new initiatives show HSBC is supportive as ever to the companies in the region.

A new report has revealed that HSBC delivered over £770m in new lending to SMEs in the region as the bank continues to play a major role in helping business get their growth plans back on track.

HSBC Commercial Banking gross new lending to SMEs in the region was up on the same period last year with the North East being HSBC’s third largest region in terms of new lending.

In total, the bank provided lending facilities to over 50,000 businesses in the region, and nationally provided lending to approximately one third of the SMEs that bank with HSBC. The lender has also made a clear commitment to lend more to UK SMEs than it did during 2011, with a focus on providing support for those firms that are trading, or aspiring to trade, internationally, and UK wide £6.3bn of gross new lending was provided to SMEs, in the first six months, an 8% year-on-year increase.

“At a time when many other lenders are contracting their lending, we remain committed to helping more small and medium-sized companies in the North East to achieve their ambitions,” said Pat Dellow, HSBC’s area commercial director for the North of England.

“The increase in gross new lending during the first half of the year demonstrates that our doors are open for business, and we urge businesses to come and talk to us about their plans as we are in a strong position to help.”

Dellow said she has also witnessed a growing appetite from North East firms to tap into new markets overseas this year.

“We have seen an increase in the number of customers in the North East trading internationally and we expect this to continue as UK businesses look to access growing markets around the world.

“With the amount of international activity carried

BUSINESS QUARTER | AUTUMN 12

Looking forward with optimism: Pat Dellow, HSBC’s area commercial director for the North of England

We have seen an increase in the number of customers in the North East trading internationally and we expect this to continue as UK businesses look to access growing markets out by UK companies set to increase by 66% over the next 15 years we expect demand for a truly international banking partner to increase, and HSBC has the expertise, products and global footprint that businesses need to take advantage of future opportunities across the world.”

According to the latest figures, North East businesses exported over £3.4bn worth of goods

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and services in Q2 2012. On an annual basis, the region exported over £14bn worth of goods and services in the year to the end of June 2012.

Dellow said: “On a like-like-like basis, exports from the North East have grown on the same period last year, which is very good news.

“This comparison, which is perhaps a more accurate reflection on how trade is performing,

AUTUMN 12

COMPANY PROFILE There are some fantastic businesses in the region that currently focus on the domestic market but with a little support they could be exporting

Techflow Flexibles director Graham Clark (centre) with HSBC’s Pat Dellow and Dave Sinden (right)

SUPPORTING BUSINESS GROWTH IN THE REGION Techflow Flexibles in Cramlington had a £10M turnover business when HSBC took over the commercial banking of the company.Now some twelve months on the turnover has increased by 80% in the high and low pressure hose manufacturing business it operates servicing the oil and gas global markets.A series of trade finance initiatives and access to assisted asset purchase funds from the Regional Growth Fund introduced by HSBC’s International Commercial Manager Dave Sinden have combined to promote turnover and profitability driven by a strong demand in particular, from the Far East where HSBC has a strong influence and Techflow Flexibles a significant client base.Facilities expansion to develop further opportunities has also been achieved with the backing of HSBC as Techflow Flexibles continue to deliver their expertise and products to the global oil and gas industry.

showed that exports were up almost 9%, which is a strong performance.”

The US and Netherlands remained the region’s largest export partner, followed by Russia, France and Germany. Half of exports, meanwhile, go to non-EU countries.

Dellow said: “Whilst it is disappointing that exports from the region fell compared to Q1 2012, we must remember that this coincided with a period that included the Queen’s Jubilee celebrations and the European Championships.

“It is particularly pleasing that half of exports are going to non-EU countries, which shows that very many businesses in the North East are operating in the global economy.”

“Our UK export related business grew by a third last year compared to 13% for the UK economy as a whole. Our strategy is based around international connectivity, with our joined-up structure and global footprint giving UK businesses access to global expertise and support.”

Among a number of commitments HSBC has made to UK-based SMEs - who may or may not be looking at exporting this year - is the promise to lend more this year than it did in 2011.

Specifically, the bank is also looking to lend more to viable UK SMEs in 2012 than it did last year and is in the throes of rolling out a £4bn international SME fund to support companies with a turnover of up to £25bn that are trading, or aspiring to

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trade, overseas. The group is also in the process of continually expanding its international commercial manager proposition. It has already increased its population of international commercial managers by 50% this year and has now over 200 experts located throughout its UK network of commercial banking centres, providing dedicated expertise to businesses that are looking to expand in new markets. “Our International SME Fund is proving attractive to businesses, with £2.7bn of the total amount lent in the first half of 2012,” said Dellow.

“The £4bn fund was established after findings from HSBC’s ‘Global Connections’ trade forecast predicted that over the next 15 years, the UK is set to increase its international business activity by around 66%.

“There are some fantastic businesses in the region that currently focus on the domestic market, but with a little support could be exporting their products and services, which benefits their business and the UK economy.

“Our increased level of new lending to North East businesses during the first half of the year demonstrates that our doors are open for business.

We urge businesses to come and talk to us about their plans as we are in a strong position to help.”

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BUSINESS QUARTER |AUTUMN 12

AS I SEE IT

AUTUMN 12

BUSINESS PLANNING ART OR SCIENCE? Jonathan Brown, managing director, UBS Wealth Management, explains the benefits of intelligent business planning Businesses rarely grow as planned. To forecast next year’s cash flow accurately is hard enough. But a five or 10 year plan requires the skill (or luck) of Nostradamus.

Precise or not, business owners are constantly planning for both short and long term events. So it is as well to channel this energy to maximise potential gains. Planning is not a futile exercise. Patterns do emerge if one analyses recent history and can reduce the risk of tactical error.

Once the brave decision has been taken to start a business, several questions quickly follow as to how to fund the initial start up: friends and family investing, bank overdrafts, grants, private placements.

The ensuing growth phase is likely to involve more than one round of funding perhaps from venture capital funds, business angels or banks, and consequently some dilution of the original shareholding.

The third phase might loosely be described as strategic positioning, a stage of the cycle that requires decisions about capital structuring, further funding rounds, listing and succession

planning. Nowhere is the importance of planning more manifest than within this stage of the business cycle. A number of non-contentious tax breaks exist within UK tax legislation for unlisted shares. The most significant of these is Entrepreneurs’ Relief from Capital Gains Tax. When a shareholder makes a gain on an unlisted trading share, providing they are an employee of the company throughout the past 12 months and hold a minimum of 5% of the ordinary share capital, they could qualify for Entrepreneurs’ Relief. In practice, the first £10m of gain is taxable at 10% rather than the highest rate of 28%. Careful planning at least 12 months ahead of a disposal can ensure that as many shareholders as possible benefit from a relief potentially worth £1.8m per person.

Similarly, Business Property Relief can exempt shareholdings in unlisted companies from Inheritance Tax. If a company is listed, opportunities exist for shareholders to optimise their annual Capital Gains Tax allowance of £10,600 by selling an appropriate amount of

Planning usually proves its worth with the accurate analysis of performance objectives, risk tolerance, time horizon and liquidity requirements

BUSINESS QUARTER | AUTUMN 12

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shares each year. Shares can, of course, be gifted to spouses so that their allowance is also utilised.

Good wealth managers do not just manage bankable assets. They work closely with clients throughout the phases of the business cycle to ensure that the business owner is aware of the opportunities and risks alike. The partnership grows over a period of years, such that the business owner can call upon expertise that ranges from growth financing, capital raising, company listing and disposal. They can further call upon structural and shareholder planning help in advance of a significant corporate event.

After that, the highest priority is usually the protection of the wealth generated over the years by the business owner. Headwinds from taxation, inflation, low interest rates and uncertain capital markets do not make the solution obvious. But planning usually proves its worth with the accurate analysis of performance objectives, risk tolerance, time horizons, and liquidity requirements.

Imperfect though it may be, humans and businesses both benefit from intelligent planning - if only to minimise risk and maximise opportunity. ■ UBS Wealth Management is a business division of UBS AG, which is authorised and regulated by the Financial Services Authority. Jonathan Brown is with UBS Wealth Management in Newcastle.

Tel: 0191 211 1000. www.ubs.com/uk

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AS I SEE IT

BUSINESS QUARTER |AUTUMN 12

ENTREPRENEUR

AUTUMN 12

in association with

SWITCHED OFF AND SMART

BUSINESS QUARTER | AUTUMN 12

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AUTUMN 12

ENTREPRENEUR

If you think switching off the lights and heating at every opportunity is the only way to cut those soaring fuel and energy bills, you haven’t met Geoff Thompson whose skills have also led to the North East’s first City flotation for five years. Brian Nicholls has met him though, as he reports

Don’t be misled by his red Bentley Continental Supersport parked outside the office.

Geoff Thompson’s a man of many parts happy in the absence of a PA, for example, to retreat to the kitchen and operate as teamaker to his visitors.

It’s remarkable, though, that he can drag himself away from his panoramic office window giving one of the most absorbing views a chief executive could enjoy. It overlooks the Tyne where the dainty pedestrian ferry plying between South and North Shields punctuates the comings and goings of the Nissan transporter, freighters and continental ferries. For Geoff it’s beyond comparison to his earlier days when he built Utilitywise behind barred windows and with no desk of his own.

Clearly opportunistic, he recently made a major strategic acquisition just three months

after enlisting Utilitywise on the Alternative Investment Market at the London Stock Exchange, the first North East newcomer for five years – and a family business at that.

He now expects an additional acquisition in the next 12 months. By the end of Q1 2013 another 100 staff could be hired too, raising the workforce to 414.

Doubts this 50-year-old had in youth about abandoning an apprenticeship in engineering were unnecessary. Investors, particularly canny in today’s wobbly economy, seem to have had few reservations about Utilitywise. The initial public offering raised almost £7m, while allowing Geoff to keep the business largely in the family.

Unlike many businesses persuading customers at this time to part with more money, for a reasonable sum at South Shields Utilitywise promises to save its customers money. It’s an

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energy and power brokerage and consultancy, driven by technology - a much needed child of its time.

As Geoff observes: “A coming energy crisis, a rising cost of living, a green factor - where to go from here, many firms ask themselves? I like to think our proposition meets a genuine need well timed.”

He was surprised on first learning his company was the North East’s first for five years to countenance a listing. “We’d no aspiration to break new ground,” he admits. “For us it was simply the right thing to do. We’d gone through quite a bit of growth over recent years and were looking at how to continue that. We’d looked at options.

“We had approaches from private equity players but felt an IPO was the right route. It’s still early days but a number of things follow from the listing. There’s an important >>

BUSINESS QUARTER |AUTUMN 12

ENTREPRENEUR

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Taking aim: Geoff Thompson’s early optimism in business is paying off as demand for his utilities brokering services continues to heat up corporate governance and corporate layer that perhaps didn’t apply as a private company.

That’s a useful and positive discipline. But most importantly, it gives access to the capital markets, and a way to continue growing.

“Already we’ve had support from some strong institutional shareholders we’re keen to develop relationships with, to attract new shareholders and continue the growth organically and by acquisition. Without enlisting it would have been more difficult.

We diluted our equity to raise the cash for the business, though only 20% of the stock is with external shareholders.

“Other options besides private equity would have been bank debt or a combination. Now we’ve ideas and activities towards gaining more businesses with complementary products and services in energy management.”

The City valued the firm at about £36.9m - a company still only six years old. Its first post-flotation buy, Clouds Environmental

BUSINESS QUARTER | AUTUMN 12

Consultancy of Portsmouth, has cost £985,000 - a shade more than one year of Clouds’ turnover. Clouds will still be run from Portsmouth, enhancing the range of technical expertise available to Utilitywise’s diverse energy management products.

It also introduces Utilitywise to Clouds customers such British Airways, O2, global pharmaceutical group Eli Lilly, defence giant Thales, the National Gallery, and NHS trusts. It also provides additional access to the South.

Geoff knows the 10-year-old firm and its founding directors well. It’s quite small and future buys may be bigger but in this deal, funded equally from Utilitywise’s own reserves and an equity issue, Clouds brings revenues of £945,000 alongside its other benefits.

Last January Utilitywise bought Eco Monitoring Utility (EMU) Systems Ltd, gaining access to important intellectual property.

Since the IPO, the number of contracted customers has risen 14% to around 12,000

A coming energy crisis, a rising cost of living, a green factor - where to go from here, many firms ask themselves? I like to think our proposition meets a genuine need well timed

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based anywhere between Land’s End and John O’Groats, and there has been a 29% increase in contracted meters, giving more than 100,000 meters in total. The overall energy spend of about £300m has been achieved on a debt free basis.

Geoff says: “It’s not just about volume growth. It’s also about adding real value to our customers’ business. We’re trying to help them

ENTREPRENEUR

buy their energy at best rates. We help them identify waste, inefficiencies, opportunities for improvement and cost reduction from an energy perspective. Once we were primarily procurement led. Now we have a range of products and services quite unique.”

For example, Utilitywise has its own submetering solution with its own IP for which an international patent is pending. Made in the

UK, it is installed on clients’ sites to detail at any time their energy usage, right down to an individual circuit.

A company may be found to be devouring up to 30% of its energy even when the building is empty. Where the waste and inefficiency lies must be pinpointed. Maybe sensors need to be installed or lighting improved by LED introduction. >>

Doubts and certainties Geoff Thompson, whose looks in another life might just have got him a job as a young stand-in for Kirk Douglas, was born in the family home at Whiteleas Way in South Shields – “right next to the pub.” He left Jarrow’s former grammar school in the late ‘70s to apprentice.

“A lot of my friends, when they got to 16 with O levels, went into the shipyards, the mines, or engineering firms,” he recalls. “In my first year of apprenticeship I was bashing metal at Hebburn Technical College.

From there I did two years of night classes twice a week, and took a huge risk because I didn’t finish my apprenticeship.”

You didn’t need to be an economist to see career prospects in heavy industry fast receding. Indeed, Burgess Industrial Silencers where he worked on the shopfloor and the drawing offices at Shaftsbury Avenue, South Shields, is no more.“Halfway through the apprenticeship, much as I enjoyed it, I worried. I had some ambition and wasn’t sure if I continued my apprenticeship my career would continue too. I decided I wanted to go to university. I had a TEC diploma but no A levels,” says Geoff.

At Sunderland Polytechnic for interview, he clutched his TEC while other candidates presented A levels. “The poly didn’t really know how to assess me. They were going to put me on an HND course. But I talked my way onto the degree course. Unlike most, because I’d left my apprenticeship and had something to risk, I didn’t want to fail.”

Not only was his Engineering Industries Training Board pass accepted, he later got a first class honours degree - only the second such one there in his chosen subject of combined material science. He joined British Steel as a graduate trainee and studied further for a post-graduate diploma in management studies one night a week for over two years, followed by an MBA at Newcastle University.

From British Steel he joined Corning Glass in Sunderland. Then it was across to the service sector, first with Price Waterhouse. After some years in consultancy he got into process outsourcing, where he gathered his invaluable knowledge about the energy market even as Powergen, Npower and British Gas all benefited from his skills.

By 2006 he was ready to start up for himself. Three employees with three laptops, three phones and three Yellow Pages set to work in a Regus office at Gateshead. Commercial Utility Brokers, the firm was called then. “Having previously outsourced for energy supply businesses, we now had this idea to represent interests of the client more. Instead of

selling one company’s product we’d be an intermediary, building relations with the supplies businesses but also giving customers the best price we could negotiate.”

There are many energy procurers and the flood of suppliers, while they have their own direct sales operations, still rely on volume and customers from elsewhere, just as phone, financial and insurance companies work with brokers.

In 2007 Geoff took on old St Bede’s social club on Albert Road, Jarrow, which had been converted into offices. While he found a certain charm there, making up for his hot-desking and being barred in, an overspill into Tedco premises in Jarrow became inevitable.

Now they’ve nearly 40,000sq ft at Market Dock, an attractive waterfront development of homes and offices on old dockland, compared with the approximate 7,000 sq ft it had previously. It’s a handsomely modern four–floor building previously built as the northern vanguard of Chey Garland’s call centre group, which was the biggest in the North East till it crashed in 2010 taking more than 1,000 jobs down with it.

The building lay empty for about a year until a 10 year lease with a five year break was negotiated on Utilitywise’s behalf, prior to relocation there last January. Isn’t Geoff a wee bit superstitious about occupying a building that felt failure before? “I am superstitious but not to that extent,” he replies.

“It was a sad ending to a very good business. We’ve a very different model. We’re not into outsourcing. We’ve filled this building already and have an option on the building next door. That’s a sensible possibility.

Chey’s still advertising it, and one or two people are looking at it.”

Maiden results show revenues at Utilitywise rose by 25% to £14.6m, and pre-tax profits jumped by 23% to £4.3m in the year to the end of July, excluding anything yet from Clouds. With that announcement share price rose more than 10% over the day, closing at 88.5p. FinCap forecasts revenues of £25m next year and profits of maybe £6.9m.

Geoff is certainly confident in the future of his client list. “We’ve helped thousands of UK businesses already, not only to find them the best energy tariff but also to manage their energy consumption much more effectively, and even lower their carbon footprint.”

He expends personal energy playing golf with Andrea at Close House, and walking their dog on the beach. When he wants to conserve energy he’ll simply stand in the Jolly Sailor at Whitburn where he lives, and raise an elbow.

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ENTREPRENEUR

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Hi-tech: Utilitywise’s submetering product edd:e which detects waste and inefficiencies Maybe air-conditioning is running inefficiently.

Besides measuring, Utilitywise can quantify the return on investment. The detective is edd:e, a sub-metering product.

Soon it will also employ its own voltageoptimiser, uniquely featured and deployed at distribution board level. This buck and boost voltage regulator will ensure voltage is regular, Geoff says.

Energy saving software developed by Utilitywise gives room by room information in assessing a building. It also considers influences like building fabric, water, lighting, timers and controls, and the boiler. “What ifs” can also be considered – scenarios within the software. Clients can then choose from a menu of efficiency measures. There’s a detailed return on investment calculation, and a proved saving post-audit. All this can be done paperless, with a laptop.

Geoff says: “We always try to beat any renewal offer from an existing supplier, then bundle in a range of value services.

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“The Government is mandating that smart metering will be rolled out domestically and commercially. We have a smart metering proposition which we don’t manufacture but do install and project-manage. We’ll push data from the smart meter onto our reporting platform then give the client all the information they need to understand exactly what’s happening.”

Clients of Utilitywise get their own energy consultant, readily reachable, who’s part of a small team. Managers of each team

are widely experienced in business energy.

Consultants can call on this pooled experience and expertise whenever further guidance is needed. Large clients with many sites, many meters or complex energy needs may have several energy consultants, usually from the same team. Smaller firms that can’t afford in-house energy management in effect can gain a member of management by having a Utilitywise consultant. Quantifying savings depends on numerous factors. But Geoff says double digit savings and double digit cost reductions aren’t rare.

Utilitywise was advised on its flotation by Clive Owen Corporate Finance led by partner Angus Allan, and Robert Phillips, partner and head of the corporate finance team at commercial law firm Muckle. It was advised in its ensuing acquisition by Eversheds law firm and Clive Owen & Co. Allan says they look forward to seeing the business grow further. The company announced with its results that Michael Dent has joined from Total Gas & Power as sales and marketing director, and will have a seat on the board. A dividend of 1p a share for the year is proposed, payable on December 14 to shareholders registered at close of business on November 30. Geoff has two sons and a stepdaughter in the business. He holds 48% of the equity. Adam his oldest son, 25, was the third employee and now is chief operating officer. He holds 16%. Investec UK Smaller Companies Fund holds 9.9%, Geoff’s wife Andrea 8.1%, and chief financial officer Andrew Richardson (who’s spent four years there) holds 8%.

Geoff’s second son Calum, 20, is a team manager. Stepdaughter Stephanie, 24, is also in the business. Stepson Philip’s a schoolboy but, one day, who knows? n

We had approaches from private equity players but felt an IPO was the right route. It’s still early days but a number of things follow from the listing

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Muckle’s Law states:

The measure of your success should be through others' satisfaction.

At Muckle LLP, we aim to provide the best advice and service through the care and attention we devote to every client. Their satisfaction and support has helped us win Regional Law Firm of the Year 2012.

"I would like to express my thanks to the team at Muckle, many of whom worked around the clock, to complete the work that was required."

Geoff Thompson, Chief Executive Officer of Utilitywise plc

Muckle www.muckle-llp.com

LLP WINNER Regional Law Firm of the Year

COMMERCIAL PROPERTY

AUTUMN 12

Industrial and office markets pick up, Rainton gets promotional lift, Mimo comes of age, Tunnel vision’s top accolade, Toffee Factory unwraps new award, and Colonel joins new ranks

Baltic Place: Attracts a Technip operation

>> Vantec’s £22m spend boosts markets News brightens for the North East on industrial and office fronts. Take-up of industrial space in the region touched 1m sq ft in Q2, a peak since 2009 and over three times average.

The region now has the least grade A space available in the UK, at 580,000 sq ft.

The largest signing was a 420,000sq ft prelet at Turbine Business Park, Sunderland, for Vantec Europe. One of several lets driven by the automotive industry, it enables the incoming investor to service its Nissan logistics contract.

Takao Suzuki, chief executive of hitachi Transport System, Vantec’s parent, says 81 more jobs will result on top of 230 earlier planned by 2015 in the £22.5m investment. It also enables Vantec to meet a second contract for another North East automotive supplier.

Vantec also has a two year contract to support Nissan’s manufacturing plant in St Petersburg from next June.

Also at Washington, a major warehouse has been sold for the £3.3m asking price.

Jones Lang LaSalle in Newcastle sealed the deal for the former US occupier, TrW Automotive. A private investor purchased, the price equating to 9.5% net initial yield.

TrW closed there two years ago with a loss of 175 jobs.

Chris donabie, senior surveyor at dTZ Newcastle, says of the region’s industrial offer in general: “Supply chain to the automotive sector has remained the

BUSINESS QUARTER | AUTUMN 12

stimulus following recent announcements

by Nissan in Sunderland and Caterpillar in Peterlee. But there is other activity – a 107,000 sq ft take-up by Spicers for example, for a dedicated tea production plant in North Tyneside, and take-up from offshore engineering and clothing importers. he added: “Another boost is the long awaited go-ahead of the £77m investment by hitachi rail Europe in a new 450,000sq ft assembly plant at Newton Aycliffe. More than 700 direct jobs are projected with supply chain spin-off also. dTZ is fielding enquires from hitachi suppliers in anticipation of contracts.”

In office lettings, city centre take-up in Newcastle area rose slightly in Q2 to 48,000 sq ft.

The average city centre deal size rose by 13% against Q1 and a “still positive” market sentiment is reported, shown by needs turning into deals.

One such involved 8,500 sq ft of grade A space to software company Scott Logic, expanding upon relocating to St James Gate. Gateshead has seen a 7,600 sq ft letting by dTZ to Technip Offshore Wind at Baltic Place East under a 10 year lease. dTZ acted for the landlord, the robertson Group, JK Property Consultants for Technip. Tony hordon, senior director of office agency at dTZ in Newcastle says: “Encouraging perhaps was the average of city centre deal size, up 13% since Q1.”

The out of town market however was, in many ways, the opposite with lettings down 34%.

Two new lettings were seen on the country’s biggest business park, Cobalt at North Tyneside.

Joint agents Gavin Black and Partners and BNP Paris Bas real Estate sealed the deals. risk Management Services represented

by Jones Laing LaSalle has taken a suite of 1,442sq ft on a new five year lease at £9psf-plus incentives.

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Sports tape maker Kinesio has taken 1923sq ft on a 10 year lease with a five year break, but with a stepped rent rising from £5psf to £10.

>> New impetus for Rainton Global property group Goodman says Knight Frank agency now jointly promotes rainton Bridge Business Park, between Sunderland and durham, with CBrE. Firms already there, and employing 2,700 people, include rWE nPower, Bowmer and Kirkland, UK Independent Medical Services, SIG Combibloc, Communicator Corporation, and Sale Cycle. Also there is Sunderland Council’s E-volve centre, home to more than 20 technology start-ups.

Tim Evans, partner at Knight Frank in Newcastle, says 55,000 sq ft of space is still yet to be occupied.

>> Bar on the up Mimo’s cocktail bar at Pudding Chare in Newcastle has marked its first year in business with an expansion, Sintons law firm having secured the necessary licence for alcohol sales and entertainment at first floor level.

>> Start to Science Central halls Construction Group is preparing land to take phase one of Science Central from early 2013.

The project is part of Newcastle Science City’s initiatives in stem cell and regenerative medicine at the International Centre for Life, and in ageing and healthcare at Newcastle University’s Campus for Ageing and Vitality.

Phase one combines office space, and houses some of the university’s research in sustainability, also providing business support services for science and technology start-ups.

This will be alongside retail, residential and sustainable living spaces in the city centre.

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Work on the 24 acres where Scottish and Newcastle Brewery once stood will be completed by summer 2014.

Staff of Newcastle Science City and Science Central have relocated from Citywall to Newcastle University’s devonshire.

>> Bye, bye, PFI? The search is on for a developer to build a new hospital serving hartlepool from Wynyard Park – without resorting to a PFI scheme that might cost £660m.

North Tees and hartlepool NhS Trust, following an independent review of the outline business case, plans to finance the replacement of two existing hospitals using pension fund loans. Trust board chairman Paul Garvin likens the process to a normal mortgage. “We borrow the money, put up the building, and pay the money back year on year,” he explained.

A review after 18 months would give the final assurance the board needed to borrow the money, award contracts and start building for a 2016-17 opening.

The project scales down a £460m plan dropped with 12 others nationwide two years ago, in state measures to save £2bn.

Construction Enquirer says a PFI project at Wynyard could cost £660m over the scheme’s 30 year life.

>> Making a splash Splash Print Management, started in January last year by Sharon hutchinson, is quadrupling its office space by relocating within The hub at Aycliffe Business Park.

Staffing is up from three to seven and five more may be recruited soon.

>> Amec thinks big One of darlington’s biggest employers is relocating its 500-plus staff to a larger site at Lingfield Point in the town. It was previously on Yarm road.

Lingfield Point, owned by Marchday plc, is a 107-acre business park where the world’s first passenger railway ran, once home also

COMMERCIAL PROPERTY

to Paton and Baldwin, the world’s largest wool manufacturing plant.

Business space available on the £100m masterplan ranges from 500 sq ft to 100,000 sq ft and above.

Also moving into Lingfield Point is Becky Sunter, of Tabby Textiles.

She is artist in residence there and has more than 20 years’ experience in textiles and set up her business seven years ago.

the north side. But while the Government is now bringing forward the original improvement envisaged there, an improved Testos roundabout on the south side looks unlikely until after 2015, as does the £6.1m road junction improvement on the A1/A19 interchange linking North Tyneside and Northumberland. These had been slated to go ahead immediately after the new tunnel opening.

>> £5m Olympic win

>> E-com, Georgian style

Patrick Parsons the Newcastle consulting engineers has won a £5m Olympic Legacy contract to maximise for general public enjoyment Lee Valley white water course, where Team GB won gold. The firm is also noted for its work on the white water course at Tees Barrage, the only such course in the world to generate more electricity than it uses.

E-commerce firm Visualsoft UK has bought Gloucester house, a listed Georgian building on Church road, Stockton, where some local council staff previously worked.

Teesside law firm Endeavour Partnership acted for the buyer.

>> Tunnel vision praised The new Tyne tunnel crossing completed last November has won a top accolade in the British Construction Industry’s national awards – and plaudits have also gone separately to North Tyneside Council for its speedy seizure of economic opportunity the £260m tunnel has created.

For the council is revitalising nearby West Chirton South Industrial Estate at North Shields, with the additional tunnel being perceived to have increased the estate’s viability. John Jeffrey, chairman of the Institution of Civil Engineers (ICE) North East says: “One of the greatest arguments for the crossing’s upgrade was to improve the economic strength of the A19 corridor.

The council is acting swiftly to capitalise on this.”

Cross-river commuters say their days have been improved by fewer traffic delays there. But Jeffrey points out: “The additional crossing can only be wholly effective when junctions on either side of the tunnels are properly upgraded.

An interim scheme at Silverlink junction has improved traffic flow temporarily on

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Tooling up: Councillor Henry Trueman, deputy leader of Sunderland City Council, and Angelo Luciano, managing director of Expert Tooling at Washington

>> Full steam ahead The next stage of the development of Tynemouth’s popular landmark Grade II* listed Victorian station is under way.

Land beside the station will provide for a supermarket of about 14,197sq ft, 67 car parking spaces and a service area.

The station, now part of the Metro system, has been officially re-opened - following its £3.68m restoration - by the Princess royal.

Some businesses trade there already, and weekend markets remain popular.

Less popular is the permission given for a supermarket. Critics think it will harm business for the local Front Street Co-op and some local shops of character. But Jonathan Sykes, director at agent Jones

BUSINESS QUARTER |AUTUMN 12

COMMERCIAL PROPERTY Lang Lasalle’s Newcastle office, says: “The scheme can be ready for occupation within nine months. We are in discussions with potential occupiers.”

>> Others can’t win for Toffee The colourful Toffee Factory in Newcastle’s re-emergent Ouseburn Valley won a main honour at a North East award ceremony held by the royal Town Planning Institute.

Judges described the former sweet factory now converted to a digital and creative media centre as a “tremendous achievement” by Newcastle City Council, its architects, and partners. They noted how its “good use of colour contrasted with the old brickwork, and a striking lighting scheme.”

Tim Bailey, project architect of Xsite Architecture, collected the award for the Toffee Factory. regional awards are mounting in the building’s first year of opening. They include Project of the Year, regeneration and highly commended in design and Innovation and Commercial categories in the North East royal Institute of Chartered Surveyors renaissance Awards. This took it on to national awards. It also gained three awards in the rIBA Northern Awards; North East Sustainable Building of the Year and North East Building of the Year. Building architects Xsite Architecture received one of 58 national rIBA awards for their contribution. The £6m project has been financed by a European ErdF programme, One North East and Newcastle Council. The city council owns the building, and multi-award winning firm Creative Space Management runs it.

>> Robots on the march A global supplier of robots and other specialist tooling has introduced 25 new jobs at its North East operation. Expert Tooling and Automation previously ran a one-man operation in Sunderland for four years, in addition to its West Midlands headquarters. Now it will support the likes of Nissan in Sunderland and Tallent in Newton Aycliffe from a bigger building on Armstrong Industrial Estate, Washington.

BUSINESS QUARTER | AUTUMN 12

AUTUMN 12

Moving ahead: Some of the lead players in the development of Motel One at High Bridge, Newcastle are (left to right) Scott Munro, Lugano Group planning director, Simon Day, director, Archial architects, and Richard Robson, Lugano Group development director at High Bridge in Newcastle.

>> Two in the making Two more hotels are emerging in Newcastle. Brims Construction is working on the multi-million pound conversion of a 220-year-old house into an apartment hotel of 14 bedrooms. The Sunderland firm is transforming the insides of Grade 2 listed Friar house in Clavering Place, Newcastle, for Manchester based roomzzz Aparthotel. design work for the four floors is by Newcastle architects Mawson Kerr. The building was owned in the early 19th Century by Sir robert hopper Williamson, a recorder. The hotel is near Sleeperz hotel recently opened.

Now the new £10m hotel Lugano Group proposed for high Bridge has also been given planning approval. The 222 bedroom hotel will be one of the first Motel Ones built in England. Architect Archial’s designs retain existing frontage and create a new block behind.

Munich-based Motel One is a multi-award winning operator with more than 3,000 rooms in major cities of Europe. It has two hotels under development in Edinburgh.

Completion in Newcastle is expected by

spring 2014.

In Northumberland, the County hotel at hexham is getting a £650,000 facelift.

Empty since February, new owner Punch Taverns is now renovating and extending the Grade II listed building on Priestpopple, subject to planning approval. Seven new bedrooms will be added to 16 existing. The 19th Century conversion of a 17th Century home was once part of Vaux Group.

At Longframlington, the son of a Northumbrian dairy farmer who returned from a Bank of England career to buy and run an award-winning hotel has now put it up for sale.

Trevor Thorne converted Embleton hall in 1986, moved by the memory of having delivered milk there. The 18th Century hall - set in three acres and built in 1730

by Thomas Embleton - was once owned by the Fenwick family. It is a past winner of the Best Small hotel in Northumberland award. Asking price: £875,000.

>> On your marks Whitburn training camp, a former defence ministry site beside the old rifle range at Mill Lane, is on the market through GVA Newcastle. The coastline site of 4.92 acres comprises the former training facility, officers’ mess and residential accommodation. With views over farmland and out to sea, it is being looked on as a possible upmarket housing spot, subject to planning.

>> BHS pulls them in BhS continues to draw customers at a North East shopping centre months after a two-storey branch opened there in January. A 15% increase in footfall at hartlepool’s Middleton Grange has resulted. Billy reid, an occupier for more than 25 years, says: “I knew there would be a positive impact.”

ONLINE: For breaking commercial property news and other business stories and insight from the North East visit: www.bq-magazine.co.uk/north-east

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>> Colonel on the march Billingham based Wear Inns has bought The Colonel Prior pub in Sunderland and another outlet in Bradford from the Orchid Pub Group. It acquired nine pubs from TCG Bars in July so has completed 11 acquisitions in five months through a £10m funding from NVM Private Equity (NVM) and Business Growth Fund (BGF).

That brings the managed pub estate up to 26 premises.

COMMERCIAL PROPERTY

- with over 1,300 staff, and more joining as the new plant nears full production. It is mopping up new contracts. Silverstone Building Consultancy in Newcastle projectmanaged the high spec 185,000sq ft unit.

Tallent supplies Volvo, Ford, Jaguar, Land rover, Nissan, honda and BMW. Silverstone is a three-year-old firm set up by chartered surveyors Ben hunter and richard Fairey.

They also project-managed a new £8.5m automotives factory for Nifco at Stockton.

>> Putting a gleam on >> Five-plants Tallent Booming vehicle parts supplier Tallent Automotive is benefiting from an £8m factory development that has just been completed – the firm’s fifth plant at Newton Aycliffe. Tallent is the town’s biggest employer

Shot blasters and specialist painters Northern Protective Coatings have won a series of orders for which they praise the facilities of Fairfield Industrial Estate on Gateshead’s Bank Quay. Jack Welsh and

fellow directors set up the firm through a management buyout in 1989. It employs 20 people. The 30,000 sq ft factory has four 10-tonne overhead cranes, and an 80ft blast booth.

>> Briefly...

The Crown Estate has bought The Gate entertainment centre in Newcastle from property firm delancey for £600m.

Capital Shopping Centres, owner of the Metrocentre, has bought the nearby disused Federation Brewery from heineken for £3m.

Moir Seafoods of North Shields has bought the Amble factory of Border Laird.

A new 343,00sq ft cross-dock warehouse at Teeslink on Wynyard Park is nearing completion by a joint venture between British Airways Pension Trustees and Sladen Estate.

touch: The market hall where DTZ continues to work closely with Castlegate Shopping Centre in Stockton

>> String of contracts The Newcastle office of dTZ has secured a string of international, national and regional contracts. The eight-strong project and building consultancy team has been appointed by real estate investment fund hansteen to provide fire insurance valuations for its near 9m sq ft mixed-use European portfolio covering Germany, France, holland and Belgium.

The same team has continued to grow business in health care, serving 30 NhS Acute Trusts throughout England. It also works closely with Castlegate Shopping Centre in Stockton, project managing a £2m refurbishment of the car park and a £1m extension and refurbishment of the market hall.

>> EZ site ready The former Swan hunter shipyard site is now an Enterprise Zone open for development, the Government having signed off its local development order. This order, covering also adjoining land, will permit a simplified planning process and the site is restricted to an occupier from a number of specialist sectors.

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0191 261 2361 08449 02 03 04

0191 232 6291 www.storeys-es.com

BUSINESS QUARTER |AUTUMN 12

BUSINESS QUARTER | AUTUMN 12

AUTUMN 12

INSIGHT

global rise of a gateshead star Hidden behind the brick facade of Sevcon’s Gateshead factory is the engine room of the New York-listed firm’s global development. Andrew Mernin meets the CEO of the motor components maker, Matt Boyle, as he charts the firm’s recent gear shift into the on-road market The irony’s not lost on Matt Boyle when he says he’s got “a carbon footprint the size of Wales”. As CEO of motor system and controls firm Sevcon, the majority of his business is making vital parts that help to cut emissions vehicles. In contrast, his personal environmental impact comes from his role at the helm of a New York stock exchange-listed firm based on Gateshead’s Team Valley.

“The corporate base is in Boston, Massachusetts, so the air miles are good.

I spend a week to ten days a month over there.” The group also has offices in France, Japan, Korea and China and recently appointed a new business development manager in Germany to target vehicle makers there. The core technology and products, though, are developed in its North East headquarters, as they have been for half a century. The company makes motor controllers and system components for electrically powered vehicles ranging from forklifts to golf carts and high end hybrids.

“Our tradition markets are forklift trucks and aerial work platforms – as well as vehicles for

At the wheel: Matt Boyle, chief executive, Sevcon

mining – and we continue to service them but using the same technology we’ve also moved into on-road applications, of which there are many.” The varied nature of Sevcon’s workload is immediately apparent as we walk across a factory floor strewn with golf carts, motorbikes, sports saloons and a network of cables and chunks of metallic kit.

“There are 150,000 golf carts made every year and you wonder where they all go,” Boyle says as he describes the vast market for lawn care equipment in the States.

“You can put a blade on the front of this for clearing snow.

“You’ll see things like this running around on NFL pitches,” he adds.

Among various on and off-road markets the firm has a hand in the high performance sports car sector.

“I’ll be hung drawn and quartered,” he says on why exact details of which Sevcon technology is being tested in which finely tuned, roaring motor cannot be revealed.

Part of Sevcon’s involvement in the high performance sports market is due to impending emission standards coming into play in 2017 which certain manufacturers may otherwise struggle to meet. >>

The Clarkson of China is more likely to drive and extol the virtues of an electric vehicle than he is an internal combustion engine

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INSIGHT

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Small but powerful: The Renault Twizy, which uses parts developed by Sevcon at its Gateshead factory

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Much of the top secret technology used on the elite end of the car market tends to filter down into the commercial space eventually.

Boyle explains: “[Car companies] start hi-tech in a place where disaster doesn’t cost them anything. They can trial stuff and cost isn’t much of an issue to them. They trial the technology, improve it and then move it down to commercial vehicles. In motor sport there’s no liability for the technology. Because it’s an experimental test bed, the driver puts his own life at risk.”

Trundling along nicely for Sevcon in a slightly slower lane – given its 62mph max speed – is its work on the electric ‘city car’, the Renault Twizy. Boyle beams proudly as he recalls overtaking a Range Rover on the Team Valley on the day the Twizy was licensed for use on the road. “Twizy has raised our game in engineering and helped us to learn how to deal with very large companies at much higher volumes than we used to.

“It also allowed us to influence those people with our knowledge.”

The firm supplies microprocessor-based controllers which manage the delivery of power from the car’s lithium-ion battery to the motor. Sharp Twizy sales since its launch in March 2012 have surprised some analysts, with Germany, France and Italy proving particularly fruitful markets. The car was the highest selling plug-in electric vehicle in Europe in the first half of the year, selling close to 8,000 units by August. It has also had a significant impact on Sevcon’s status as the go-to firm for specialist components for the electric vehicle market.

“We had a great response to the Twizy when it was released. When people opened the covers and saw Sevcon, there was a ‘who are these guys? What are they up to?’ response. They also thought ‘good grief, they’re British’.”

Overall, on-road business remains buoyant for Sevcon, fuelled by growing demand for rechargeable cars and higher performing hybrid vehicles.

“It’s been a large driver of our growth over the last 18 months, with new applications, customers and products, and I don’t see that slowing. What I am concerned about is whether or not the politicians will stick to their guns whenever the automotive guys start

INSIGHT

Twizy has raised our game in engineering and helped us to learn to deal with very large companies at much higher volumes than we used to saying the emission targets can’t be met.

“If they do then it’s going to be a good run up, otherwise [our growth will more likely be from] top down technology rather than solely emissions.” Sevcon is already steeled for such a potential shift in the market and green appeal is not the only selling point the company targets with its low emissionscompatible technology.

“You can’t hang your hat on emissions. I’ve got to think whether I make the drive system cheaper than the alternative? Can I make it more reliable than the alternative? Can I make it lower maintenance? Can I make the technology so cutting edge that a supercar maker says ‘that’s the technology we’re after’?

“So we’re attacking from various angles.

“We will [supply parts] for hybrid technologies, but plan b is to come at it from the top through electrical power assist systems and that sort of stuff. In addition, we can also come through the hybridisation of traditional internal combustion engines on less glamourous applications - like the traditional industrial vehicles that we’ve been servicing for 50 years.”

The latter area of focus, in simple terms, benefits from a much more favourable pricing model than that of the car market.

“The most complex and sophisticated vehicle in the world today is a combine harvester,” says Boyle. “If you buy one today it’s got a GPS system that can tell you within feet of where you are, what you’ve just cut, how to optimise the harvesting of a field. It has self-drive technology and when you think about the technology that’s on a car, the GPS tells you to go down a road that leads you to the bloody sea because it uses commercially available technologies. The sort of stuff that you use on buses and combine harvesters is really cutting edge and it’s also expensive.

39

“So on a US$1m combine harvester, the fact that the control system costs US$3,000 its two tenths of bugger all. But when you put that controller into an e-class Mercedes, for example, then you’ve blown the profit margin. And that’s why we see our future not necessarily in high volume cars but in niche markets on and off road.”

As part of its ongoing expansion, the company is currently looking to “add more meat on the bones” to its activity in China – where it already has a presence through various distribution deals.

Driving demand there, says Boyle, is the Chinese government’s desire to improve the country’s green credentials as well as keeping the nation ahead of the technology curve.

“The Clarkson of China is more likely to drive and extol the virtues of an electric vehicle than he is an internal combustion engine. Thank God for that.

“There’s a lot of interest in China in the electrification of transportation and they have put investment into two wheel vehicles mainly.

There are far more two wheel vehicles in China then there are four.

“So because of their size, the motors and batteries cost a lot less than through a four wheel combustion engine.

“The Chinese also have a lot of the natural resources that go into the more sophisticated motors. They also like to be at the forefront of technology and are early adopters. They are far more likely to embrace new technology than some of the petrol-heads of the West.”

Boyle sees India, meanwhile, as a “good, emerging” market, although its poor electrical infrastructure is a major stumbling block.

More developed markets can be equally burdensome though – including the US where commuters are required to cover far more ground than here in the UK. >>

BUSINESS QUARTER |AUTUMN 12

INSIGHT

AUTUMN 12

Boyle says: “My personal belief is that range extenders make far more sense than pure electric vehicles. If you get to 60mph you can turn on the internal combustion system that will recharge your batteries so by the time you get to your destination you could have 75% more power in your battery system.

“That makes far more sense to me than a pure electric vehicle.”

However the ‘big four’ car makers, he says, are driven by cost and also the opportunity to create their own unique selling point through technology which has led some to pursue pure electric first.

Despite its NASDAQ-listed status and network of offices in the US, most of Sevcon’s technology and other IP is developed in Gateshead. Boyle says this suits the company when it comes to managing its public persona, particularly in relation to keeping a relatively low profile in the American press.

“Americans like to see where the IP’s developed. If we could move all the IP to

BUSINESS QUARTER | AUTUMN 12

America we’d be a Siemens but because it’s here in Gateshead, the public face of the company never gets seen.

“Some people say we’ve got the worst of both worlds. I actually think I’ve got the best of both because I can do things quickly, get success and then tell people about it in my own time.”

In contrast he points to the example of electric car battery maker A123 which recently filed for bankruptcy in the States amid a storm over the selling of IP and technology to the Chinese that had been developed with the backing of taxpayer dollars.

“They’ve been pilloried because the IP is now believed to be owned by the Chinese. That’s the flip side of [being a high profile firm in the US]. What I do is deliver, deliver, deliver. I keep my head down and get the job done.”

IP is a part of Sevcon’s sector that is riddled with grey areas and dangerous liaisons.

As a result, the company tends to steer towards product rather than project-based

40

business. Boyle says: “I try to avoid nonrecurring engineering work, which is when someone says, ‘will you do this job for me and I’ll give you £100,000?’

“One reason is that the IP ownership becomes confusing. They are paying us because we know how to fix a problem but at the end of it they’re not prepared to say ‘we’ll give you production of the solution in 100,000 units per year’.

There are a few exceptions, such as the work we do with the Technology Strategy Board, or if someone throws a massive amount of money at a silly problem which is sometimes the case. I wouldn’t turn it away but the important thing for us is that we get a product out of it at the end and that we protect our IP. “If we turned ourselves into a project company rather than a product one I’m certain we’d get to a debate with people who’d say ‘you developed that with our money’. But we can say that wholeheartedly we’re a product company not a project company.” n

Port of Sunderland: Onshore Synergy. Offshore Energy.

Sunderland’s coastal location has always played a huge part in its economy. The city’s port is ideally situated, with immediate access to open sea and three kilometres of river and dock berths. Add to that a track record for 24/7 delivery, dynamic, commercially minded management and a ‘can-do’ outlook, and you can see why the Port of Sunderland is flourishing.

E info@makeitsunderland.com T +44(0)191 553 2100 W makeitsunderland.com

COMPANY PROFILE

AUTUMN 12

North East firms urged to explore export North East firms are being urged to take up the international trade challenge and explore export opportunities during a special week-long programme of events.

UK Trade & Investment has teamed up with partners and business organisations to organise events across the country for Export Week (12-16 November) to reach out to small and medium-sized enterprises (SMEs).

Export Week events meet the needs of every type of exporter, new or existing, and range from seminars and workshops to roadshows and one-toone sessions, webinars and conferences. There will also be five “ExploreExport” events – including one in Leeds – where UKTI experts from 70 overseas markets will be on hand to provide bespoke advice about trading both with our international partners and with high-growth markets.

UKTI is also making it even easier for companies to explore export opportunities with the launch of a new series of “Export Insight Visits” which given new and novice exporters the chance to take part in an overseas market visit to one of 12 European countries for a nominal charge of just £99.

Countries included in the programme include Sweden (12-16 March 2013), which is being coordinated by the UKTI North East team and will focus on Stockholm. Its priority sectors include electronics and telecom, machinery, automotive, infrastructure, renewable energy, pharmaceuticals, ICT and defence and security.

Other Export Insight Visits will travel to Croatia (24-26 October), Turkey (27-29 November), France, Germany, Spain and Italy (January 2013), Belgium, Czech Republic and Denmark (February 2013), France (January 2013), Poland and Republic of Ireland (March 2013).

David Coppock, Regional Director for UK Trade & Investment in the North East, said: “The past year has been full of challenges for the region’s companies but despite a dip in export figures during the last quarter (up to the end of June 2012), the North East has still enjoyed another excellent export performance for the year as a whole, with a record £14 billion worth of goods and services exported around the world.

“However, we cannot be complacent. While overall

BUSINESS QUARTER | AUTUMN 12

David Coppock our overseas performance is strong the number of companies involved in international trade is still relatively small and as part of the National Export Challenge our aim is to help create 500 new exporters in the region by 2015.

“Export Week provides an ideal opportunity for companies to find out more about the opportunities and how exports can help their business grow with a wide range of events we hope will inspire and encourage them to take up the export for growth challenge.

“And our new programme of Export Insight Visits provide a low-cost and accessibly way of exploring a new market with all the help and support UKTI has to offer.”

He added: “Virtually any company can export its products and services – from single-owner operations to large corporations employing hundreds – and there are plenty of opportunities for North East businesses.

“Last year more than 600 North East companies took advantage of the wide range of support services available through UKTI and I would urge companies to join us during Export Week or sign up for one of the Export Insight Visits and find out how UKTI can help.”

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Events during Export Week will include: Monday 12 November UKTI Services and KLM Competition launch – Tees Valley Airport/Rockliffe Hall (venue to be confirmed) – 8.30am-12.30pm.

Tuesday 13 November Barclays and UKTI Export Assistance – Durham County Cricket Club, Chester-le-Street – 8.30am12.30pm Federation of Small Businesses event – Redworth Hall, County Durham – pm Wednesday 14 November Explore Export event with UKTI experts from 70 overseas markets – DoubleTree, Leeds – 9am-3pm International website masterclass – Hilton Hotel, Gateshead – 8.30am-1pm Thursday 15 November Supply Chain Workshop – Newcastle United Football Club (to be confirmed) – 9.30am-1pm Friday 16 November Market seminar (Dubai/UAE), including a chance to meet your ITA – DoubleTree, Newcastle Airport – 8.30-11am Market seminar (Spain), including a chance to meet your ITA – BIC Sunderland – 8.30-10.30 Market seminar (Netherlands), including a chance to meet your ITA – Durham County Cricket Club, Chester-le-Street – 8.30-10.30 Market seminar (South Africa), including a chance to meet your ITA – Hartlepool Marina – 8.3010.30am Exporting for Growth reception – Marriott at the MetroCentre, Gateshead – 12-2.30pm

For more information about Export Week log onto the website at: www.exportweek.ukti.gov.uk

12 November

15 November

Be Part of Export for Growth with KLM, Tees Valley

Supply Chain Workshop, St James’ Park, Newcastle, 0930-1300

0830 Registration/Breakfast Networking 0850 Introduction – David Coppock 0900 UKTI Services Overview 0930 UK Export Finance – Jonathan Leonard 0945 Joined by representatives of Lloyds and

HSBC for Q&A 1005 Mid-Sized Business Programme –

Jonathan Gamblin 1030 Break 1045 Stephen Catchpole, Tees Valley LEP 1110 KLM/Competition Launch and

presentation – KLM/DTVA 1150 Panel 1215 Lunch

How to gain an competitive advantage over your competitors and increase profits.

13 November FSB event, County Durham 1230 Networking Lunch 1320 Welcome – FSB 1330 HSBC 1355 UK Export Finance and UKTI services tba 1420 Break 1430 Case Study 1445 FSB - Martin Rogers 1515 Q&A Session

14 November Exporting for Growth International Website Master Class, Hilton Newcastle Gateshead, 0830-1300 Are you sure your website is optimising international sales for you? Is your website being found when people search for your products or services internationally?

NOF Oil & Gas Networking Lunch: Heerema - focus Cygnus Project, Xcel Centre, Aycliffe Business Park, 0900-1030 Prior to the networking lunch a session with the UK Trade & Investment team starting at 09.00 and finishing at 10.30am which will focus on ‘Putting your energy into exports’.

ExploreExport – Partnered with UKTI Yorkshire and Humber, Doubletree by Hilton, Leeds, 0900-1530 Your chance to organise one-to-one meetings from more than 50 markets.

UKTI have partnered with UKTI Yorkshire & Humber to offer you the opportunity to book one-to-one meetings with our commercial officers from a choice of more than 60 markets worldwide.

16 November Meet Your ITA, MP and Market Seminar (Dubai/UAE), DoubleTree, Newcastle Airport, 0830-1130 0830 Registration/Breakfast Networking 0845 Introduction & UKTI Service Offer/Dubai/

UAE offer – Lissa Holmes/

Geoff Charlesworth 0920 Malcolm Wright, Spectrum Consulting

(Doing business in the UAE) 0940 Adil Khan, UKTI Dubai 1000 Break 1010 Catherine McKinnell, MP Newcastle North 1030 Julie Dunning, Emirates 1040 Graeme Mason, Newcastle Airport 1050 Closing Remarks/Q&A

Meet Your ITA and Market Seminar (Spain), BIC Sunderland, 0830-1100 0830 Arrive/Breakfast Networking 0900 Introduction to UKTI 0930 Video Conference with Post

Meet Your ITA, MP and Market Seminar (Netherlands), Durham CCC, 0830-1100 0830 0900 0930 1000

Arrive/Breakfast Networking Introduction to UKTI Kevan Jones MP Video Conference with post in Hague (Michiel Veldhuizen)

Meet Your ITA, MP and Market Focus (India), Hartlepool Marina, 0830-1100 0830 0900 0930 1000

Arrive/Breakfast Networking Introduction to UKTI Iain Wright MP Focus on India and MV, Phil Hollowood

Exporting for Growth Reception, Marriott MetroCentre Gateshead, 1200-1415 1200 1240 1245 1300

1345 1400

1430

Networking Lunch Welcome – David Coppock North East LEP Guest speaker, Rob Law MBE, creator of the Trunki Martin McTague FSB and OMIS Prize Closing remarks/Q&A – business card prize draw One-to-one meetings – Adil Khan, Dubai

Booking onto these events can be done via www.eventbrite.com search on UKTI NE to find the events or contact the North East international hotline on 0845 0505054. www.ukti.gov.uk

ENTREPRENEUR

AUTUMN 12

Psyched up and soaring

Neither family nor bank manager could stifle Steve Cochrane’s ambition to put an industrial borough on the world’s fashion map. But international recognition now proves his vision was a financial stroke of inspiration. Brian Nicholls explains His is a fashion head not for turning. His parents tried to talk him out of selling style for a living. Engineering was the family thing.

“You know nothing about business. We’ve never been in business. Why would you want to be in business?” Steve Cochrane mimics in authoritarian tone.

“Even when I worked on the rigs and went to see my bank manager he said to me: ‘Instead of opening this shop you plan why don’t you buy yourself a nice car?’ So this is my bank manager, my mother and my father.

The more they tried to talk me out of it the more determined I became to try to get into fashion,” Steve says.

He worked on the rigs six months – enough to raise start-up capital. Today even mates from his oil days shopping in his store wonder at the size that Steve’s business, Psyche, has now reached. “I think they can’t believe it because

BUSINESS QUARTER | AUTUMN 12

it started as a tiny boutique little bigger than six telephone boxes. No-one expected it to reach this level. Not even me.”

Psyche today fills an imposing building whose style and elegance belittle neighbouring takeaways, cafes and tiddler businesses on Linthorpe Road, central Middlesbrough. The red brick, marble and chrome landmark with rooftop flags proudly a-flutter, signal 30 years of Steve’s insistence on becoming a retailer of designer clothes, culminating in Psyche now

among one of Vogue magazine’s 100 Best British Shops.

“You can’t get better than Vogue, it’s the ultimate accolade. I’m over the moon. To be ahead of Selfridges Birmingham and Harvey Nichols Leeds is a big deal,” he says delightedly. “Leeds is brilliant for clothing – about four times the offer in Newcastle. And Harvey Nichols Leeds is our main rival.”

Equally pleasing is the fact that Psyche is now also 50% bigger than Harvey >>

It’s the size of a department store with a boutique passion for independence, giving the benefits of both

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BUSINESS QUARTER |AUTUMN 12

ENTREPRENEUR Nichols Leeds. It’s all a fitting follow-on to coming second to harrods as best department store in the UK – in the drapers’ Awards last November. Steve agrees that Middlesbrough is no Paris or Milan for fashion yet, albeit Psyche dresses men, women and children with equal panache, and claims one of the largest shoe and bag displays outside London.

“National Press tends to put Middlesbrough down. So its image isn’t great,” Steve admits.

“But you know, people have always been very fashion conscious around here. They tend to party and go out a lot, not just here but throughout the North East. The more they go out, the more clothes they wear, and we can sell more adventurous things. I’ve got mates all over the country in this kind of business, and I sell more adventurous products than they can.

“If you live in London and wear a suit all day you tend to dress down or dress casual when you go out. But a lot of people work in

AUTUMN 12

Leeds is brilliant for clothing – about four times the offer in Newcastle. And Harvey Nichols Leeds is our main rival

industry here. They don’t necessarily dress up for work so they make an effort when they go out.”

A sequel, he agrees, to when our forbears wore Sunday best to chapel.

“We’ve noticed a massive upsurge in tailoring,” he adds. “dressing smartly is very much on trend. We’re selling loads and loads of tailored separates like a sports jacket to wear with chinos and things.”

As what goes around also comes around,

A by-the-way hotel Surprisingly, Steve Cochrane couldn’t galvanise enough enthusiasm among other Middlesbrough businesses to persuade them to bid with the local council for a Business Improvement district.

For perhaps 1 or 2% on their rates they’d have had an upgraded area encouraging footfall and perhaps drawing £25m more into the local economy. BIds flourish in several countries. One’s working for Newcastle, and darlington is venturing too. But a lack of national multiples stymied Middlesbrough on this, in his view. “Some other bigger retailers were behind it. But in the end there just wasn’t enough support. Very short sighted...” he feels Teesside towns need one supreme commercial area and says this would align with beliefs of Mary Portas, who’s leading a national study to get the heart back into Britain’s high streets. Some of her recommendations, such as street markets and cheaper parking, ring true to Steve. But the few towns getting £100,000 each to see what they can achieve smacks of farce to him. “What can you do with a hundred grand? Middlesbrough didn’t get it. Stockton did.

Middlesbrough was upset. But Middlesbrough lost nothing.” he hopes Middlesbrough will gain from his latest project - a new four star hotel, which again the council supports him on. he had planned it on top of his store. But the council now wants him to build it behind. It could link into the store, and the 50 bedrooms earlier envisaged could be increased. “We’ve finance in place and planning permission,” he says. “Now I’m about to acquire the land. The council has given me a time scale for house demolitions necessary.”

A start to Psyche hotel is expected by 2015, Steve being convinced there’s massive demand. he reckons Middlesbrough’s existing four star hotel averages 86% occupancy, and when it’s full visitors have to stay at alternatives an inconvenient distance away if one has to get through traffic jams to a 9am meeting. Teesside University, where he sometimes speaks, uses 500 plus room nights a year. They’ve said they’d use my hotel for 300,” he says.

So does he plan to diversify, be a serial entrepreneur even? No. “I don’t want a hotel,” he says.

“Someone else will run it, perhaps a chain. We’d build to their spec then they’d take it over.”

BUSINESS QUARTER | AUTUMN 12

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he’s selling loads of cravats and colourful top-pocket squares. The burning question at this point, though, is why, when many large retail stores elsewhere are closing, Psyche - ensconced in what was once Upton’s department store - is heading to 25% growth this year, perhaps a £1m jump to £5m in turnover? First, dr Steve Cochrane (to give him his academic recognition), doesn’t regard Psyche as a department store. “It’s the size and scale of a department store – but we keep a boutique passion for independence, giving the benefits of both,” he points out. So it’s more a colony of boutiques distinctively branded or, like a Middle East soukh, a venue where the sum of the parts is greater than the whole.

There’s more to it than that, though. “In recession many managements batten down hatches, slash costs, advertising and inventory carried, as well as the number of brands and labels....stop taking chances with fashion and new products....cut staffing levels till customer service suffers. They even cut back on maintenance.

“We’ve done the opposite. We’ve refurbished entirely, taken on staff and more stock than ever, and have exciting new brands, as well as upping our marketing spend and taking on a Pr company. high risk strategy,” he admits, smiling. But profit growth is rising even faster than turnover growth in percentage. Sales last year were up 20% with average spend around £160 a visit.

So far this year he has put £240,000 into interior transformations.

No wonder his honorary doctorate from Teesside University was given for business administration – the shopfit work has been mainly paid for by suppliers.

“Because we’re continuing to increase our stock levels and most other people are cutting back, the suppliers >>

BUSINESS QUARTER |AUTUMN 12

ENTREPRENEUR want to do windows with us, co-marketing and adverts, and are giving gifts with purchase. They’re giving staff products to wear. That’s put us in a fortunate position compared with many others in the UK. It’s a case of building relationships with your suppliers then levering as much as possible.

They want to sell more product, we want to buy more. It’s win, win when they work closely with us.”

A change of bank has been helpful, as Steve explains: “With the new Santander payment scheme we pay suppliers quickly and that’s

AUTUMN 12

supported by the bank. In moving banks we’ve taken on new financing to do all we’re doing.

The bank pays the suppliers within 48 hours.

We pay the bank back after 90 days. The bank takes a small charge. We get trade discounts.

We get additional benefits. It’s the other way round from factoring, a new product in the UK market.” Then there’s the website relaunched last year. That brought a 148% jump in its revenues for the year, with 20% of all online purchases going abroad to as far as Australia and russia. he has customers in the USA and Japan, and attention now is on Middle East

From Sliced Tomatoes to Armani Middlesbrough-born Steve went to St Alphonsus School and later gained an hNC at Preston Polytechnic (now the University of Central Lancashire). he gained his honorary Teesside doctorate at the same time as the dancing journalist John Sergeant and historical novelist Philippa Gregory. he nurtured his penchant for fashion by designing the clothes for a new wave band he sang with.

“Everyone loved our clothes. I was much more passionate about clothes than about bits of metal,” he remembers. he opened his first shop at redcar in 1982 - Sliced Tomatoes on Station road, named after his band. Now the former ICI engineer and oil rigger could be found making and selling the sort of clothes he loved wearing. In the front room at home he tie-dyed T-shirts and sprayed bleach on jeans. “People travelled miles to buy our jeans and frilly shirts.”

In 1984 he opened Psyche on Linthorpe road in Middlesbrough. What’s now a hair salon became his womenswear store. In 1988 he opened a second store nearby, giving it a facade of Gaudilike architecture. This was a men’s store, now a bar. When Psyche’s present imposing building, erected at the turn of the last century, fell vacant Steve sold his house, his car, and the freehold on his two boutiques. “I sold everything I could - even used my pension, to buy this building,” he says. That was 10 years ago.

Today brands such as Lindeberg, Armani, ralph Lauren and Paul Smith are part of the stock in trade. Psyche also has a two-year deal to provide all the suits for the Middlesbrough FC squad, and has royal approval from Savile row for its tailoring services.

Steve was one of only three independent UK retailers the British Fashion Council recently invited to St James’s Palace for a big fashion event. Today also he can mention how fashion has brought him closer to the like of Princess Anne and pop diva Beverley Knight, and fashion notables Vivienne Westwood, John roacha and Arcadia’s Sir Philip Green – people you’d never meet on an oil rig.

Steve’s one of three menswear buyers covering major trade fairs and catwalk shows in Milan, Florence, Paris and London. Two more pick womenswear, and one of the two doing children’s buying is Steve’s fiancé Alex Thomas. “She’s a very clever girl,” Steve says.

“She has a first class degree in retail from Leeds University. So it’ll be a bit of a marriage made in heaven when we wed next May. She’s damn good. We’ve been together nearly 10 years and engaged since 2005, but have taken that long to get round it.”

Steve, who lives in Yarm, and has two sons. harvey, 13, would love to become a rugby professional. Oliver is five.

“My missus is desperate for another one so watch this space,” says Steve. With enthusiasm.

BUSINESS QUARTER | AUTUMN 12

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customers, both Arab and expat. Steve says: “A friend in dubai has a clothes shop but knows nothing about internet retailing. We’ve been doing it for years. he wants to set up a subsidiary of Psyche’s website in dubai.

“It’s expensive having to build a completely new website with Arabic and dirhams on.

They’ve Arabic speakers there, obviously, because you don’t want to put Arabic on a website then find customers asking you lots of questions in Arabic you can’t answer. We’re working out how to do this cost effectively.

That’ll launch early next year.”

Steve thinks more about the internet and a new warehouse to feed online demand than about any new shop opening. Stores must link internet business to their bricks and mortars business very closely to survive, in his view.

The other vital ingredient, one he feels many stores lack, is enthusiasm. “We’re trying to make Psyche retail theatre - exciting, dramatic, changing all the time so it’s stimulating and gets the shopper’s heart racing. Come back here in four weeks’ time and you’ll see the place changed again.

“I’m totally passionate about what I do,” he declares. “I get dead excited coming to work in the morning. Alex (his partner) has to force me to go home of a night. There’s always something to do. I love change. I’m a bit hyper. Always full of energy, passion and enthusiasm. My staff are enthusiastic and passionate too.”

A bedside pad takes his slumber-time jottings, and his Filofax – “my little black book” – is his daytime companion carrying myriad notes and ideas. he carries a Blackberry too. “I’m still ‘80s man in that sense, I’m afraid – a bit analog, a bit digital. I’m always drawing things. That display should look like that or we need this product in black as well as red. That kind of thing...”

Enthusiasm is the essential he’ll look for when adding to his 64 staff. “We can train people in fashion, product knowledge and all a job entails. But you can’t train someone to be smiley, jolly and friendly. They are or they aren’t. I once employed people who were very fashionable and knew a lot about clothes.

I ended up with a shopful of prima donnas more concerned about their appearance than about looking after customers.” n

IN BUSINESS WITH YOU

FUNDING LOCAL BUSINESS SUCCESS IN THE NORTH EAST We're firmly behind local business in the North East; so when Cordell Group wanted a banking partner to finance the growth of their engineering company in Stockton-on-Tees, we were delighted to be able to help.

"We are delighted with the service we have received from Santander. Their sector knowledge and in-depth understanding of our business means they were able to structure the right deal to fit our needs and ambitions."

Nigel Park, Group Finance Director, Cordell Group

Talk to the bank that wants to be in business with you. santandercb.co.uk

Get in touch on 0800 056 1028, email nebusiness@santander.co.uk or visit santander.co.uk/meet-the-team

Santander UK pie. Registered Office: 2 Triton Square, Regent's Place, London NWl 3AN, United Kingdom. Registered Number 2294747. Registered in England. www.santander.co.uk Telephone 0870 607 6000. Calls may be recorded or monitored. Authorised and regulated by the Financial Services Authority except in respect of its consumer credit products for which Santander UK pie is licensed and regulated by the Office of Fair Trading.

FSA registration number 106054. Santander and the flame logo are registered trademarks. CCBB0032_0019

COMPANY PROFILE

AUTUMN 12

Local funds make impact for businesses Andrew Mitchell from North East Finance (NEF), manager of the Finance for Business North East Fund, explains how the scheme could offer a model for others to follow in improving access to finance for SMEs. More than £50 million has been ploughed into early stage and growing businesses in the region over the past two and half years by the fund managers responsible for investing the Finance for Business North East Funds (FBNE).

At a time when there is still a perceived shortage of finance for business , both from the banks and a slow take-up of certain Government-backed schemes, the £125m FBNE fund is an example that not all funding initiatives are failing to hit the mark when it comes to improving access to finance.

Questions have been asked about the effectiveness of a raft of initiatives, with criticism that many SMEs are still unaware of their existence, but Finance for Business is already approaching its 500th investment and the pipeline of deals remains strong.

Since our first investment in April 2010, when games developer Eutechnyx received £650,000 from the North East Accelerator Fund to support the development of its new driving game, we have invested a further £58 million in around 460 businesses.

It’s an injection of public money that has helped to drive the market (the number of deals is far higher than otherwise would have been the case) and has attracted millions in private investment. So far, a further £60 million of private sector investment has been leveraged to meet the equity gap faced by many businesses, which has helped create or safeguard nearly 2,000 jobs.

In the past, the region’s economy has suffered as the majority of investment has been focussed on the South East. Finance for Business is helping to fill this gap and support exciting business ideas which otherwise may not have received funding.

A key factor in our success is the hard work of our six local fund managers who work tirelessly to find investment opportunities. Importantly, alongside NEF, they have also worked closely from the start with business intermediaries and business support networks across the region to ensure they

BUSINESS QUARTER | AUTUMN 12

First investment: Darren Jobling and Brian Jobling, from Eutechny, with Monish Suri (left) Prime Technology Ventures; and Alasdair Greig, Northstar (right).

understand the funds and can signpost businesses towards them. This level of communication and integration is paying dividends with many of our inquiries and successful applications coming via this route.

The success of these investments is reflected

by Eutechnyx, which has recently signed a lucrative deal to sell its game, Auto-Club Revolution, in Russia. There are many more successful investments and innovative emerging technologies. Companies such as Radfan, which has pioneered a low-powered fan to spread the heat from a conventional radiator, and CatalySystems which has developed technology to help the process industries conserve, clean and reuse waste water, are both examples of North East companies achieving success following investment.

The flexibility of the funds is also a big strength.

They were designed to adapt to market needs and have not only supported companies like Eutechnyx, looking for serious growth finance, but

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those looking for investment of as little as £1,000 through our Microloan Fund. This way we’ve been able to support a broad spectrum of businesses across the North East.

We have a further two years until the end of the investment period and have many more exciting investments still to make. We’re not complacent and will continue to work with our partners like North East Access to Finance and others to ensure that businesses can make the most of the opportunities our portfolio offers.

For more information visit www.northeastfinance.org or follow on twitter @JEREMIE_NE or call 0191 211 2300.

Name

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

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COMPANY PROFILE

AUTUMN 12

Forward thinking since way back 250 years on, the modern day Brewin Dolphin has proved that it’s not old fashioned, as Charles May suggests There’s no way you could fit all the candles on a celebratory cake to mark the special birthday this year of Brewin Dolphin, one of the UK’s biggest independent investment managers and financial planners.

It’s 250 years old. Co-founder of London Stock Exchange, Brewin Dolphin has guided succeeding generations of clients and their investments successfully, even through uncertainties of the industrial revolution, the Napoleonic and two World wars, and now the rise of the internet and a non-stop daily global financial sector.

From days of correspondence in handwritten copperplate to the launch in 2011 of its first i-Pad app, Brewin has cultivated personal trust with its

Having a ball: Brewin Dolphin’s assistant director and rugby loving Anthony Peart, with Team Northumbria’s head coach Simon Culley

Our history proves our business.

But it’s what we’re doing now and in the future that matters to us today

BUSINESS QUARTER | AUTUMN 12

clients. It manages today £25bn-plus for 130,000 clients.

“To be around since 1762 you must be doing something right,” says Charles May, Head of Office in Newcastle. He suggests it’s... adaptability.

“If your company is 250 years old, it has proved it’s not old fashioned. Those slow to move with the times fell by the wayside long ago.”

Charles continues, “We understand there are many busy people in the North East, especially now, who want their money managed with the best possible guidance.

“We offer expert advice, backed by up to date systems. We retain client loyalty because we’re always prepared to take the time to review and discuss our clients affairs. We launched financial planning a couple of years ago, additional to investment management, giving a fuller service all round.”

Newcastle is one of 41 Brewin Dolphin offices UK-wide, its 350 staff including financial planners and investment managers, are crucial in creating and preserving wealth for private clients, trusts, charities, and pension funds.

Brewin likes to talk to busy successful people who recognise they should be planning their long term personal finances, but are perhaps under pressure just doing the daily job. As Charles says: “We understand if they run their own business, or are a lawyer, accountant or other professional, that the last thing they may want to sweat over is personal finances.

“We say: ‘Look, you can meet our top quality financial planners and investment experts. They’ll consider whether we can help you. We’ll ponder your assets, where you want to go to in life, what you want to be, when you want to retire, what you need to think about regarding children if you have children, and whether you need to look to invest.

“Returns on building societies and several other investment options aren’t always good at this time. The Stock Exchange can give greater returns, though we can’t always promise. But our qualified research people analyse companies and sectors

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Into the community Brewin has stepped up commitment to the region, firming links with business, culture and sport. It sponsors the Entrepreneurs’ Forum, North East Business Executive of the Year Awards, Newcastle Theatre Royal’s autumn season, and a current appeal for another eminent North East institution, the Lit and Phil in Newcastle.

It supports Durham County cricket, Team Northumbria rugby (men and women), and other sports with relish, many of its own staff being participants. One of its trainee investment managers is Michael Richardson, Durham County club’s young South African graduate in accounting and management who aims to show a safe pair of hands beyond his wicket-keeping. He says: “I can take skills from cricket on to Brewin Dolphin leadership and communication in particular.”

Furthering its support for charities, Brewin will launch a foundation soon to help its local communities. Charles May says the firm is the antithesis of traditional financial services down to earth with a no-nonsense approach that suits clients, and no hard sell.

Startime: Brewin Dolphin director Lorraine Armstrong enjoys a moment with the cast of Sister Act

AUTUMN 12

COMPANY PROFILE

Part of a big team: Assistant Directors, Anna Matthews and Lucinda Beaumont from Brewin Dolphin Newcastle

Here we are, bang in the North East, a well run business British owned, committed to the region and wanting to stand out from the crowd

Divisional director, Barney Hawkins joins the growing team at Brewin Dolphin Newcastle

globally, always seeking suitable opportunities to invest in.

“Busy executives can find it better having someone schooled in this than having to do it themselves.

Some even leave their finances to one side and forget about them. We’d like to think we’re first point of contact.”

Charles stresses: “Here we are, bang in the North East, a well run business - British owned, committed to the region and wanting to stand out from the crowd. We like to think that we care about clients’ finances as much as they do.”

The expertise is growing also. Two chartered financial planners operate from Newcastle now, George Slack and Gareth Davies. The firm has also taken on another assistant director, Lucinda Beaumont, and an divisonal director already notable in the region, Barney Hawkins, previously with UBS. Charles says of the 7,000 clients advised from Newcastle: “Many have been with us for

53

Safe Hands: Durham County wicket-keeper and Brewin Dolphin employee, Michael Richardson Photo by: yoursportsphoto.co.uk

generations. We like people to come and chat with us if they want some advice. We’re happy to take second opinions. But it’s what we’re doing now and in future that matters to us today.”

If you would like to arrange a meeting with one of our investment professionals or financial planners, please contact John Duns on 0191 279 7415 or email john.duns@brewin.co.uk Time Central, Gallowgate, Newcastle upon Tyne NE1 4SR 0191 279 7300 www.brewin.co.uk The value of investments can fall and you may get back less than you invested.

BUSINESS QUARTER |AUTUMN 12

BUSINESS LUNCH

AUTUMN 12

in association with

North East

BUSINESS QUARTER | AUTUMN 12

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AUTUMN 12

TSG, the rapidly-growing North East tech firm is invariably associated with the tale of what Sage co-founder Graham Wylie did next. But a lesser known yet no less important yarn buried within the fabric of the business is that of the Joynson family.

Their office supplies shop in a small town in the North was the acorn out of which the £45m oak tree grew. And here to tell the story, over a sizzling curry on a rainy Thursday afternoon, is Mark Joynson, currently serving as TSG’s regional managing director.

Joynson left school aged 16 on a Friday with ambitions of a military career.

By the following Monday he was working for his father’s business in Whickham. At least there was some degree of militancy, though, with his new boss refusing to employ him on a full salary, instead paying him £25 per week on a YTS arrangement.

“I got to know the business from the ground up and learnt all aspects of the entire organisation. In the early years I was a junior sales person and learnt the ropes. My dad is

BUSINESS LUNCH

one of the best teachers we ever had, with my brother Peter joining at 16 three years after me.” Then, as what Joynson recalls as a “really tight-knit family business” grew, so too did its appeal to potential suitors.

In 1988 the business was snapped up by a national plc, a shrewd move by Joynson senior given the looming recessionary years of the early 1990s.

The company’s new owner was later acquired

by Pentos, which owned stationery giant Ryman at the time.

And, after four years of being run from afar, the opportunity for the Joynson family to fly solo once more was forced upon them.

“Pentos couldn’t get the concept of giving credit to business-to-business customers as opposed to retail, which was their core business. We got the opportunity to buy the business back right in the middle of the recession 1992 so we did, but we had to cut our cloth accordingly.

“We had too many staff at the time and had some tough decisions to make. We let people

go, some of which were family members, so that was a really difficult time for us. But we had to keep the business going.

“We cut some costs and had to make profit to sell as much as we possibly could to our customers – but our customers stayed very loyal to us.”

When the fire-fighting finally ended, the Joynson empire emerged from the smoke with a new-found, forward thinking outlook.

“We were doing office equipment but, as things progressed, we were selling typewriters, then word processors and then PCs, which gradually became more affordable.

“So we just morphed into a technology firm.

We totally diversified in the mid-nineties and decided technology was going to be the way forward. We took the route of selling Pegasus accountancy software as well as Sage and we were quite unique at the time because we were doing hardware and software.”

Then came the Millenium Bug – or rather it didn’t. “The world was going to implode and a lot of customers were changing their >>

A lasting legacy Trace the roots of IT giant TSG deep into its past and you’ll find a family-run shop near Gateshead, where a teenage Mark Joynson first learned to sell under his father’s gaze. Today Mark continues to drive what is now one of the fastest growing tech firms around, as Andrew Mernin discovers

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Family man: Mark Joynson’s family business formed the platform of what is now TSG

BUSINESS QUARTER |AUTUMN 12

BUSINESS QUARTER | AUTUMN 12

AUTUMN 12

systems and we were very busy at the time.

“We had to make sure our customers were clued up to what was going to happen. The software vendors were telling us what might happen, as were the hardware vendors, and there were a lot of system refreshes to get ready for the big day.”

But when the clock struck 12, directors Mark and Peter and their father, the MD, were not chained to their desks wincing at the prospect of a technological meltdown.

In fact they were celebrating the completion of a deal which saw the two brothers assume complete control of the business, with their father getting the exit he was looking for.

“We basically bought the business from my dad and dropped office equipment out of the name. We became 50% shareholders and set a plan out of what we were going to do with the thing.

“We’d grown it to £2m turnover, it was profitable and my dad had a nice lifestyle out of it, but it was time to kick on. The deal went through on New Year’s Eve.” The acquisition of rival firm Mill House Computers and further organic growth helped to take the company to around the £4.5m-a-year turnover mark by 2003 – but the ambition was to grow further. Enter software tycoon Graham Wylie.

“Graham had left Sage and so we approached him about joining us as a non-exec director to help us realise our ambitions and go on a journey. He asked us to give him some time to relax after working for Sage, but in the next meeting we had, he said ‘I don’t really want to come on your board as a non-exec director, I want to buy your business’. And we nearly choked on our pasta.”

The company was only three years into its 10-year plan at the time, having built up a 45-strong workforce.

“It was a very profitable business and a good sized IT reseller but we were purely North East.

Graham sold us the grand plan and his idea to create a national IT solutions provider that was going to be £50m-a-year, and then £100m.

“When the offer was on the table, the key thing that swung it was how exciting it could be in the future and so we decided to sell the business lock stock and barrel on October 13th 2003.” That he remembers the exact date is

BUSINESS LUNCH

It was a big decision and the type that you only make once but the key was that it just felt right

hardly surprising given that he clearly still lives and breathes the business. But the deal was no speedy affair.

“Negotiations are always tough with Graham,” he says smiling. “It took us about four months to conclude the deal and it was quite a tricky period because we were trying to maximise our profits while providing a shed load of information to the lawyers and also negotiating what we wanted to sell at. But we got a great price for the business.

“My dad told us to do what we wanted as it was our baby now. It was a big decision and the type that you only make once but the key is that it just felt right.”

And Wylie’s vision nine years ago was certainly no conjuring act dreamt up to entice the Joynsons into a sale. Today the company is already at around the £45m-a-year stage in terms of turnover, having been a prolific acquisitor by adding close to 30 firms to its portfolio since Wylie’s intervention.

“Graham invested a lot of his wealth into TSG and then wanted to acquire more Joynsons throughout the UK. In the first year we were doing one acquisition a month and it was just a really exciting time.

“In the early stages I had a part to play to ascertain whether the acquisitions were the right fit and had the right individuals and structures in place but now we have an entire team that does that under the direction of chief executive David Stonehouse.

“In some instances the MDs of those companies asked me what it felt like on that side of the fence. And all the ones I spoke to sold out to TSG. When you do sell your business, you’ve done things your way and the biggest challenge is that the new company owners do things in a different way and some people find it difficult to adapt to. So some MDs are no longer in the business.”

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Despite other business interests, the Sage co-founder is still in the business, acting as chairman, and remains a close adversary to Joynson.

It must have its perks, BQ suggests, being a keen golfer and a pal of the owner of one of the region’s top courses, Close House.

“Nah. Graham gives me money and I just give him it straight back,” he says through laughter referring to his golfing membership and also his participation in Wylie’s new fitness business, SpeedFlex. Joynson was member number one at the new Jesmond gym business which opened this year and promises to spread a new fitness phenomenon across the UK. “Because I’m so busy it’s a really quick fix to losing loads of calories,” he says as we prepare to gorge ourselves on a calorific feast.

And the membership fees he pays out to the Wylie corporation are perhaps countered by the rent TSG pays on its Team Valley office, which is owned by Joynson.

Meanwhile, although Joynson’s dad has long since retired, he still remains a trusted source of advice to him, meeting as they do every Friday to “chew the fat over a pint”.

But aside from Mark and his brother Peter – who today continues to serve at regional director level within TSG – the Joynson name is prominent in other areas of the business too.

“A lot of the people from the Joynson’s business are still here today which is lovely to see. All my management team as they were are still in TSG. My mum worked for us in credit control until she retired a couple of years after we sold. My sister Sam has worked there pretty much since she left school as a sales administrator and my son Ben works in the warehouse – or UK logistics as he calls it. My uncle also works here, as well as my cousin who’s been with us since he left >>

BUSINESS QUARTER |AUTUMN 12

BUSINESS LUNCH school. So there’s a lot of the old school still in the business,” he says. Customers have also remained loyal to what started out as the Joynsons family shop before its meteoric rise to national prominence.

“We’ve kept hold of the majority of our customers. I’ve a customer today who I used to sell typewriters to who we now sell sixfigure technology networks. It’s nice when you get that kind of continuation.”

Joynson admits he’s not a product person but a commercial one – hence his ability to make the seamless transition from selling typewriters to high grade technology.

He says: “For me the concept of IT is very, very simple. The customers just want it to work and they don’t want any downtime. It does happen from time to time but it’s about how you react to it.”

Areas of growth for the firm in terms of technology include customer relationship management systems, Microsoft’s collaboration software Sharepoint and the growing clamour among firms to adopt cloudbased practices.

Currently around £11m of its £45m-a-year sales come from clients in the North East, with around £7m being generated in Scotland and £5m coming from each of the Midlands and North of England.

“There are quite a few areas we’d like to grow into – we’ve got to grow in London,” he says, though moving the HQ there would never be considered he adds.

TSG also remains firmly gripped to the acquisition track. “We’re very lucky in the sense that we don’t have any bank borrowings and luckily we’ve got an owner who is more than happy to continue to fund the business.

We’re very privileged to be in a position where we don’t have to rely on the banks to lend us cash to acquire businesses.

“Whilst we have a list of targets we’ve also got a much bigger list of people who are willing to sell to us.

“So there’s plenty of opportunity for us to grow to twice the size of what we are both organically and in terms of acquisition.”

Doubling in size would see the firm become almost a £100m-a-year empire; a far cry from its origins as a family shop in Whickham. ■

BUSINESS QUARTER | AUTUMN 12

AUTUMN 12

An afternoon on the spice trail Sitting in Sachins restaurant in the middle of the working day – not to mention without having had a precursory drink or two – seems an unusual occurrence to Mark and I. Less so for Mark, perhaps, as he professes his status as “a curry man”.

But given its vantage point within a naan bread’s fling of Newcastle’s station, hindsight reveals an ideal venue for a business lunch. With plenty of lighter options on the menu, it also needn’t leave customers in mid-afternoon snooze mode as they return to the office.

Following Mark’s lead, and obvious familiarity of the menu, we order a selection of tasters to share. We’ve colluded against something fast and light and instead order enough dishes to cover our fairly sizeable table.

Among them is kashmiri champney, or spring lamb chops spiced and barbequed served with a mint chutney, the chunky monkfish dish amritsari fish and chilli chingri – flavoursome, marinated king prawns served on an orange and cinnamon dressing. All of which are devoured with pace.

Mark also highly recommends the Sachins tandoori selection of dishes which make for an excellent starter for two.

Being the curry virtuoso that he is, Mark chooses the fiery murgh tikka lababdar for his main course. Chicken in lightly whisked egg, nuts and fresh cream with a powerful spicey punch.

Timorously I ask for something milder. The murgh muglai fits the bill. Tandoori chicken breast cooked in a rich tomato and cashew nut sauce. Both dishes, served with basmati rice and naan bread, hit the spot with no sign of over-seasoning or indistinguishable tastes akin to less reputable city centre curry houses. Unfortunately our eagerness at the starter stage has left little room for desert and we opt for coffee before leaving the Punjabi ambience for the rain outside.

For more information ring 0191 261 9035 or visit www.sachins.co.uk

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North East

It’s arrived.

The all new Audi A3.

Everything you need, nothing you don’t.

Sometimes, you can achieve a lot by only using what you need. It’s something we found when we developed the all new Audi A3. We worked hard to remove unnecessary weight and by cutting out what we didn’t need, we found room for more of what we did. But really, all you need to know is that it’s available now at your local North East Audi Centre. Speak to a member of our team to book a test drive and experience it for yourself.

Book a test drive today.

North East Audi. Part of Benfield Motor Group.

Newcastle Audi

Tyneside Audi

Wearside Audi

Teesside Audi

Scotswood Road, Newcastle upon Tyne NE4 7YW. Tel: 0843 248 7228 (local rate)

Silverlink Park, Wallsend, Newcastle upon Tyne NE28 9NT. Tel: 0843 248 7218 (local rate)

Stadium Way (Opposite Stadium of Light), Sunderland SR5 1AT. Tel: 0843 248 7248 (local rate)

Brooklime Avenue, Preston Farm, Stockton on Tees TS18 3UR. Tel: 0843 248 7238 (local rate)

email: enquiries@newcastleaudi.com

email: enquiries@tynesideaudi.com

www.newcastleaudi.com

www.tynesideaudi.com

email: enquiries@wearsideaudi.com

www.wearsideaudi.com

email: enquiries@teessideaudi.com

www.teessideaudi.com

Official fuel consumption figures for the new Audi A3 range in mpg (1/100km) from: Urban 40.4 (7.0) – 61.4 (4.6), Extra Urban 58.9 (4.8) – 85.6 (3.3), Combined 50.4 (5.6) – 74.3 (3.8). CO2 emissions: 130 – 99g/km. For more information visit audi.co.uk/allnewA3.

MOTORING

AUTUMN 12

SIZE AND SUBSTANCE Joe Olabode, managing director of IT Solutions company PCI Services, test drives the Porsche Panamera 3.0 litre V6 Turbo Diesel As someone who loves nice cars and indeed continually spends money (or rather loses it hand-over-fist when it comes to depreciation) on them, I’d like to think I know a fair bit more than the basics in terms of the technical engineering that goes into making them.

But despite this knowledge, my selection

criteria is pretty simple. Does it look good from the outside? Does it have a presence on the road? Is it comfortable and well fitted out internally? Does it feel solid and have good road-holding - not to mention some poke when I want to have a bit of fun? Oh and of course, how much is it?

If all answers are yes and the deal is right then I will have it.

So when I was asked to have a play with >>

Ta

LE

BUSINESS QUARTER | AUTUMN 12

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CT licen new be u Fina

CT CO

LEXUS CT

GO BOLDLY WITH £2,981 CENTRE FINANCE CONTRIBUTION AND 0% APR* The Lexus CT F Sport is the World’s first full hybrid luxury compact car.

With sports styling and tuning, luxurious comfort and outstanding fuel economy – it’s unlike anything else on the road. With a company car tax cost of just £73† per month and CT prices starting from £21,995, there’s nothing to hold you back.

Representative Example Model

Term

23 Monthly payments

Cash price

Customer deposit

Fixed rate of interest (per annum)

Amount of credit

Guaranteed Future Value / Optional final payment

Total amount payable

Representative

CT F SPORT

24 months

£99.80

£24,9950

£8,710.00

0%

£16,285.00

£13,989.60

£24,995.00

0% APR*

Take a test drive at

LEXUS NEWCASTLE 22 Benton Road, Newcastle NE7 7EG 0191 215 0404

www.newcastle.lexus.co.uk

CT 200h prices start from £21,995 OTR. Model shown CT F SPORT costing £28,396 including optional metallic paint at £510. Price correct at time of going to press and includes VAT, delivery, number plates, full tank of fuel, one year’s road fund licence and £55 first registration fee. †BIK company car tax calculated for a 40% taxpayer. *£2,891 Centre finance deposit contribution and 0% APR Representative available over 2 years on a Lexus Connect Contract Purchase (PCP) scheme on new retail sales of CT F Sport when ordered and proposed for finance between 1 October and 30 November 2012, registered and financed by 30 November 2012 through Lexus Financial Services. Other finance offers are available but cannot be used in conjunction with this offer. Terms and conditions apply. Excess mileage charge applies over 30,000 miles at 9 pence per mile. Indemnities may be required. Finance subject to status to over 18s. Lexus Centres are independent of Lexus Financial Services, Great Burgh, Burgh Heath, Epsom, Surrey, KT18 5UZ. Subject to availability. At participating Lexus Centres.

CT F SPORT fuel consumption and CO2 figures: urban 68.9 mpg (4.1 l/100km), extra-urban 70.6 mpg (4.0 l/100km), combined 68.9 mpg (4.1 l/100km).

CO2 emissions combined 94 g/km.

MOTORING

AUTUMN 12

What Bob says...

Plenty to ponder: Joe Olabode certainly saw more pros than cons on his test drive the Porsche Panamera I thought ‘great, a chance to play with a car made by a best of breed car maker steeped in history’.

On delivery of the car my first impression was ‘‘wow’. It looked great and it certainly had a presence on the road.

The black exterior with 20” Titanium wheels was one box ticked right away.

Meanwhile, the brick red Interior with bags of room and loads of comfort, felt plush and absolutely quality, as I would have expected from a premier executive car - although I did find the control features and visual instruments to be a little congested and in some cases distracting (sometimes less is more as they say).

But I have no doubt that if I had the car long enough I would get used to or come to terms with what they could do for me and what they were telling me.

In terms of performance and handling, when I first pulled away the first thing I noticed was its growl, which instantly wowed. At once I had a sudden urge to get out there on the open road to see what this bad boy could do.

Once I’d done this - and after acclimatising and familiarising myself with the car - I was able to see whether this model was for me.

Put simply, when driving I do like to really ‘feel’ a car or get a response from it whenever I press the accelerator.

What was noticeable with this motor was

BUSINESS QUARTER | AUTUMN 12

the lag between the growl of me hitting the accelerator and the response of the car. That, coupled with the contours of the front end bonnet, made it feel like I was always being reminded of the size of the car, which is pretty big. Clearly this was due to the cars mass and so what else should I have expected?

Out of interest, I decided to change into ‘sport’ mode which is a simple case of selecting the sport button on the centre console. Then came another wow!

The difference was strikingly ‘in your face’.

The growl was directly in-line with the accelerator and instantly the performance difference was almost tangible. And in this mode the size of the car no longer mattered.

All the while I could feel the cars stability system keeping me in check, making me wonder why I’d bothered taking advanced driving lessons.

More boxes were ticked however.

In summary, having said all of the above, I think I would need the car for longer to decide whether it was for me. n Panamera 3.0 litre V6 Turbo Diesel is available from £63,000, the car Joe drove was £78,160.

Porsche Centre Newcastle, Silverlink Park, Wallsend, Newcastle, Tyne and Wear NE28 9ND, 0191 295 1234, info@porschenewcastle.co.uk

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Like most car manufacturers Porsche have been actively looking for new markets other than sports cars. This began with the launch of the Cayenne back in 2002, which became an overnight sales success for Porsche, even though the car didn’t have the usual stunning looks expected from the brand. They have, however since redesigned the car and it looks better than the first Cayenne. Then came the Panamera! Prior to the launch of the Panamera most people looking for an Executive saloon would normally opt for either the BMW 7-Series, Audi A8, Mercedes S Class or the Jaguar XJ. Now Executives also have the Maserati Quattraporte, Aston Rapide or the Porsche Panamera to choose from. The Porsche’s trump card is the addition of a diesel engine. The Panamera was launched at the Shanghai motor show back in 2009 with either a 3.0lt or a 4.8lt engine. Since its launch, Porsche has sold 1300 in the UK and over half have been to new customers to the brand. In 2011 a Hybrid version was introduced with a 3.0lt engine and an electric motor, the car emits 159g/km it’s the greenest Porsche in the whole range. A diesel was also launched in 2011 and the 3.0lt engine gets the car to 60mph in 6.8 seconds and its top speed is 150mph. With the100ltr tank the car should be able to cover 750 miles on a tank.Viewed at some angles the Panamera has a look of a 911 but the rear section does not look as classy as a Rapide although the Panamera is nearly half the price! Press the sport button and the car comes alive with the PASM stiffening the suspension and the car feels more like a sports car.

Bob Arora is an independent car reviewer and also owns Sachins restaurant on Forth Banks, Newcastle. kulmeeta@hotmail.com

52436 AC BQ Mag Volvo 260x205 31/10/2012 10:27 Page 1

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millvolvo

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The price is based on a V40 D2 ES FUEL CONSUMPTION IN MPG (L/100km) Urban 70.6/4.0, Extra Urban 83.1/3.4, Combined 78.5/3.6, CO2 94g/km. Finance subject to status. Terms and conditions apply. Applicant must be 18 or over. Guarantees/ indemnities may be required. At the end of the Personal Contract Purchase there are three options: (1) Part exchange the vehicle, where equity is available (2) Pay the GFV (Guaranteed Future Value) to own the vehicle or (3) Return the vehicle. Further charges may be made subject to the condition of the vehicle.

Santander Consumer (UK) plc T/A Volvo Car Credit RH1 1SR. Car featured for illustration purposes only.

MUNDAY ON WINE

AUTUMN 12

A disTAnT AdMirer

New kid on the region’s hospitality block, Adam Munday, GM at Hotel Indigo in Newcastle, says he has a distant relationship with wine. Here he looks to reconnect with his old friend as this quarter’s guest reviewer

Having been recently appointed as the new general manager of newcastle’s Hotel indigo and Marco Pierre white steakhouse bar and grill, i was delighted when bQ came calling for its latest wine review.

The trouble is, wine and i have a distant relationship - perhaps akin to one you might have with a family member who lives overseas.

You dont see them for ages then suddenly you are with them for weeks on end. working in hospitality means from about the age of 16 i was expected to know all about wine. The best trick i learnt to bluff my way through was to recommend the most

BUSINESS QUARTER | AUTUMN 12

expensive on the menu. Fortunately my wine knowledge has evolved since then, as i hope the following shows...

Domaine Bergon –Sauvignon, Vin de Pays D’Oc 2011 A very nice wine for a summer’s day - or indoors in the winter months as a reminder of summers past. it’s best served cool but not too cold at about 6-8˚C so as not to subdue its fresh and zesty palate. The beautiful pale yellow colour is reminiscent of a corn field ripe for harvesting, and its dry character displays many citrus fruit

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and apple aromas. it also has a great mineral balance on its finish, lasting well on the palate. i believe it’s an ideal accompaniment to most lighter flavoured dishes particularly seafood or shellfish. i think that a healthy sized glass of this and our Potage of Mussels billy bye with its creamy Mediterranean taste would work fantastic together (pardon the plug). its display of earthy, mineral notes as if machine harvested, delivers a flavour in which all the grape grew with - stems, stalks and pips - is evident.

All of which keeps this wine natural and a very good wine it is.

AUTUMN 12

i would say though that this wine would need to be drank soon after purchasing say six months or so as it has not been made with a maturation in mind.

Guilhem, Moulin de Gassac, Langudoc, 2010 daumas Gassac, the estate of the Guibert de la Vaissiere family, is generally regarded as Languedoc’s greatest wine and could be considered the only truly world class wine of the region. The vast north west facing slopes that cover near 20 hectares utilise their terroir to its full.

This wine however is from the estate but not from the afore mentioned family’s Grand Cru, as i expected it to be. it is a deep coloured, off full weight red with enough tannins to

MUNDAY ON WINE

hold its own with most meats. its character distance’s itsself from the all too common familiarities of the “house” wine as this is truly a “food” wine. i think it would complement any quality banquet with lamb on the menu or would complement, with great effect, a slow cooked cut of beef. it could most definitely find a good audience with our diners of our 28 day-aged cuts of beef, as well as a roast rump of lamb a la dijonnaise dish. The warming dijon mustard and herb topping would complement this wine’s deep fruity flavour very well. in terms of taste, there are obvious hints of fresh dark

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stone fruit, cherry, black raspberry featuring a long lingering and mouth filling sensation as though you’ve just eaten a cherry.

This wine may benefit from a good six months left in the bottle to age but is ready to drink now and would improve up to the half-year mark.

Then i feel it would gradually fade with less full fresh fruit flavours coming through. n Wine supplied by Michael Jobling Wines Ltd, PO Box 90, Ponteland, Newcastle upon Tyne, NE20 0WZ 0191 3784 554 info@michaeljoblingwines.com www.michaeljoblingwines.com www.facebook.com/pages/ Michael-Jobling-Wines Twitter @MichaelJobling

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new breed is born What happens if you cross the swagger of a super-car with the practicality of an SUV, asks Josh Sims

When Eterniti launched in the UK in November, its debut car design not only turned heads but raised eyebrows. At £210,000 and, should the buyer want it, almost entirely bespoke-built, here was another super-car. But this one, the Artemis, was different. Neither a dust-gathering track car nor a lumbering limo, here was the first of a new breed: the super SUV. “It’s certainly a quirky idea,” says brand director Mark Carbery. “You could call it schizophrenic, or all things to all men. But the reality is that most super cars are no use in the city, and road quality is often not good enough anyway, while a limo-type car, such >>

as a bentley, is well-appointed but lacks the thrills. The super sUV is practical, luxurious, but also very high performance. it will do a lot of what both super car and limo can do but in a car you can actually drive.” bentley, by the way, will launch its own super sUV in 2013, with Maserati having one on the cards for next year. All follow in the huge success of the more mass-market Porsche Cayenne, which, after initial scepticism, proved the market was there: indeed, it now accounts for some 50% of Porsche volumes worldwide.

The eterniti Artemis certainly has the right credentials, not least being engineered by Alastair Macqueen, who has three wins at Le Mans and the building of the JCb land speed record car under his belt. it has a 4.8 litre, twin-turbo V8 giving 600 bph and a top speed of 180 mph, 0 to 62mph in 4.5 seconds, with a ride that doesn’t rattle your organs about in your rib cage and a cabin interior that is more stately home - or at least a stately home owned by a rock star. it is a very modern luxury vehicle - and, what is more, from a british company, “for a customer who appreciates the british track record of being very good at cars with small volume production, or who just want to deal with a

Most of the ideas we have come from the gut and polarise opinion.

We’re out to provoke new ways of thinking

company in London rather than Stuttgart,� says Carbury. And nor is it alone. With the big guns of the super car world - the likes of Ferrari and Lamborghini - so entwined in their prestigious histories they rarely produce cars that feel like a genuine break with the past (which is a boon or a hindrance, depending on your view), the benefit of being a young company is that you can, as it were, think out of the gearbox. “We have the space to do something interesting,� as Carbury has it.

Noble Cars, also British, also run by men with a racing background - Peter Boutwood, its managing director, is a one-time Formula 3 driver and worked in Formula 1 with Damon Hill - has gone down a similarly left-field road.

While Eterniti has got a head start in a new category by piling on the rather pleasant surroundings and the common sense, Noble has, in a way, gone back to race car roots, stripping its M600 back to make a car that demands to be driven, rather than to do all the driving for you. Indeed, capable of 0 to 60mph in just three seconds and with a top speed of 225mph, the M600 might be so much more the typical very powerful car were it not for the fact that it has a six-speed manual >>

Head turner: The fiercely independent Rinspeed iSpeed model

gearstick and no ABS braking. The dashboard gives the minimal information because, really, this is a car in which the eyes really, really need to be on the road.

With Noble a small company, based near Leicester, it too takes the full bespoke option to the limits, with the design team ready to work up a new interior design in order to fit in your music system of choice, if that is what you want.

That also explains why only around 12 cars are built a year, with each taking three months to complete. Bravely for times in which cars seems as much about posing as getting anywhere, Boutwood says that, for all of the smooth lines of the M600’s carbon fibre shell, this is a car that is not about good looks.

Rather, it is about the drive.

And that’s drive, not dive. If being less wellknown rather than a household name, if a certain oddness or particularity and is the unexpected are all assets increasingly sought by the car fanatic - “the few with the money

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and passion for cars ready to go off piste and buy a more interesting car,” says Carbury then perhaps the concept cars from Swiss company Rinspeed are to their taste too; and not least the sQuba, a car that really can go underwater. Road car turns submersible.

Among founder Frank Rinderknecht other visionary vehicles - and these are actually designed, built and tested, existing on the road not just on paper - are the Presto and the iChange, both extendable cars; the Bedouin - convertible to a pick-up, not to mention being the world’s fastest natural gas-powered car; the Senso - with a bio-metric interior that detects and responds to driver mood detection; the eXasis - its floor and body made from a transparent, high-tech plastic; and, for speed freaks, the Advantige Rone - the first supercar to be powered by a biofuel made from kitchen waste.

Along the way Rinderknecht has devised windscreens with scratch-proof coatings, rust-proof plastic composite bodies, as well as

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inventing the steering wheel mounted controls now common to many cars.

Like Eterniti and Noble, the similarly small and independent Rinspeed kicks against the predictable, in Rinspeed’s case in aiming to predict where car design may go next.

“Most of the ideas we have come from the gut and a lot of them polarise opinion - but that’s ok, we’re more agent provocateurs, out to provoke new ways of thinking,” says Rinderknecht, with a sentiment no doubt shared by the bosses of the other brands too.

“But big car companies are not structured to allow emotions to lead,” he adds.

“That corporate structure isn’t flexible enough. The industry is hampered by its size, and the brands by their need to maintain an image.

“Of course, you have to be realistic about what has commercial potential and what doesn’t - even if it’s important for touching hearts, for being a provocative idea, about making it possible even if nobody really needs it. After all, it’s easy to do a nice little sportscar, no. 742. But, you know, so what?” n

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FASHION

AUTUMN 12

in association with

age-old italian brand loro piana is an exclusive club in which luxury, above all else, is what matters, as JOSh SIMS finds

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Some €3000 for a jacket might seem like a lot, but when only 20 could be made, it is presented in a lacquered box and, most incredibly of all, it is woven from lotus leaves, the price tag might seems less bank-breaking.

“In fact,” says Pier Luigi Loro Piana, joint-CEO of the Loro Piana family business and Italian luxury goods label, “in the end I don’t care how much the resulting jacket might cost. Of course, long-term we have profit in mind. But right now this is more about keeping alive an artisan community making something unique, about saving a very antique tradition from being lost.”

That antique tradition happens to be an ageold and little-known craft on the shores on Lake Inle in Burma, where fibres are extracted from lotus leaves by hand and then woven within 24 hours before deterioration sets in.

This produces just 120gm of a raw silk-like yarn. Small wonder then that the esoteric and labour-intensive craft is on the point of dying out. Or that Lora Piana, when it heard about it, decided to back and buy the community’s entire output for the foreseeable future.

After all, super-exclusive fabrics are its metier.

This is the same global company - formed in Valsesia in 1924 by Pietro Loro Piana, taken over by his nephew in 1941 and now based in Milan and run by his sons Pier Luigi and Sergio - that a few years ago acquired 2,000 hectares in Peru to convert into a private reservation for vicuna, the once endangered lama-like creature whose coat provides the so-called ‘fibre of the gods’. Or the company that, as the world’s biggest cashmere producer, convinced Chinese and Mongolian >>

We’ve never put a logo on anything but that hasn’t prevented the company from growing

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FASHION

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breeders to set aside small quantities of ‘baby cashmere’, the super-soft under-fleece taken from a kid’s coat on its first (and only on its first) combing, 19 kids’ worth being required to make a single sweater. Unsurprisingly, such a sweater does not come cheap.

“But there is now a consumer with experience in wealth - and I don’t mean ‘old money’ - who is looking for something more, who finds pleasure less in showing off as in the quality of what they buy,” argues Sergio Loro Piana, whose name, since it now adorns some 19 stores across Italy alone, has become something of a national byword for serious luxury. “The fact is that we’ve never put a logo on anything and that hasn’t prevented the company from growing. For those who are in the club, the product alone is recognisable enough, even if it’s invisible to others.

“And that is not an easy position to duplicate - if you’ve sold to a segment of the market on the back of branding, it’s very hard to leave that behind to sell to the very top end of the luxury market...”

Loro Piana’s position - and its verticallyintegrated operation, unusual in the fashion industry - has certainly paid off. Sergio Loro Piana attributes this in part to being a family company - this allows projects to be progressed at their own pace, rather than in a rush to meet shareholder expectations. Its baby cashmere operation has been years in development, the kind of plan that guardians of the bottom line might condemn as extravagant. Sergio, three years Pier Luigi’s senior, jokes how his brother (with whom, unusually, he swaps seats to lead the company every three years) only started using email a few years ago - and then only when he realised that decisions were being made without his involvement because he never checked his in-box.

But this bubble-like existence certainly works.

The E500m company has seen its revenues grow to ten times what it was just a decade ago. And it has slowly extended its remit beyond clothing made from top textiles to bags, shoes, specialist outerwear (developing techniques to allow natural fibres to be as protective as technical synthetics), and interior decoration fabrics.

Its latest product line, sunglasses, similarly >>

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FASHION

AUTUMN 12 strives to meet its ‘best of the best’ philosophy - they are made with the thinnest optical glass in the world, which also contain a secret combination of rare earth elements to provide extreme levels of contrast and clarity, with a celluloid frame polished over days by tumbling amid chips of beech and birch. That perhaps explains their £600 ticket. Still, Sergio Lora Piana, a keen pilot, is very pleased with his.

“They are, of course, just a pair of sunglasses and the world doesn’t need another pair of sunglasses,” he says. “But as vicuna is to knitwear, so these are to sunglasses...”

Indeed, part of the appeal of Loro Piana is that it could put its name to almost anything, as other ‘luxury’ goods companies have, but chooses not to. Expansion, the company says, will come from more stores and emerging markets, “whereas give your name to a licensee and they want to sell as much of everything as possible,” he says, “which is good for making money - but only in the short-term.

But we’re not really into ‘brand extension’,” Sergio Loro Piana adds. “We did shoes, for example, only because I needed some to sail in and someone thought the ones we made were so good we should put them in production.

And the sunglasses came about because we didn’t want to use somebody else’s in a fashion shoot we were doing. You do a fragrance and next thing you know you’re making toilet bowls. We just want to use the best raw materials to make things in Italy with a bit of good taste.” n www.loropiana.com

This is about saving a very antique tradition from being lost

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Northumberland Street, Newcastle upon Tyne

ENTREPRENEUR

AUTUMN 12

Deadgood designs on success

Elliot Brook and Dan Ziglam are building a North East reputation for progressive furniture and lighting design, taking other young creators with them at the same time. Brian Nicholls explains

The paradox is hard to ignore, making your way along Market Street in central Newcastle.

There stands Chapman’s respected furniture store, fated to shut down soon after 165 years. Yet in a Carliol Square office block just behind, up four breathtaking floors of stone stairs, Elliot Brook and Dan Ziglam combine their studio ingenuity, pursuing their vision to develop “the most dynamic design brand of our generation.”

This, Elliot amplifies, will embrace an eclectic collection of 21st Century furniture, but also lighting and interior products for “an international niche of style driven consumers and cutting edge commercial projects.“ Don’t look askance. Their four-year-old company, Deadgood Trading Ltd, has already had the BBC and Google as clients, the latter both in London and Madrid, and with which Deadgood is now also negotiating over a project in Dubai.

The designers’ initial orders were delivered to the British Council’s offices in Sudan, and into upmarket retailer Heals in London.

They first attracted an international following when promoting prototypes at exhibitions in London, Paris, Stockholm, New York and Milan. In those early days they operated under several guises. Inspired by the graduate fairs on mainland Europe that they were able to attend at university expense, they started promoting their own design events in the

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North East called Launch. “Every time we came back to the North East we felt we’d had the wind kicked out of us,” Elliot explains.

“There was no scene here. Lots of interesting creators were trying to launch businesses, but no real platform existed to show this region what we were all doing.”

To run Launch and bring regional designers to wider audiences regionally and nationally, they tapped into the Finance for Business fund.

Over three years, it became a leading North East showcase of design, promoting their work and that of more than 50 more emerging regional designers and creative businesses. The annual exhibitions in Newcastle attracted more than 3,500 visitors.

Dan and Elliot promoted themselves then as a design studio. Their second Launch gained them the attention of James Barker, managing director of avant garde furnisher Barker & Stonehouse. New ground was thus broken even before Deadgood was set up. James asked Elliot and Dan to design

a collection for his Teesside firm’s seven showrooms nationwide. The collaborative outcome, the Love Collection, won front-cover editorial space and numerous features in leading industry publications. Further foreign recognition was inevitable.

Elliot says: “The furniture was built for a Barker and Stonehouse audience, and distributed throughout. This continues. Just to be given the opportunity – in 2006, I think – to work with someone obviously prestigious, was great. It was successful for them, too, I believe.

They had not worked with young designers in that way before.”

Barker & Stonehouse’s insistence on high standards was underlined again recently, incidentally, when its website was voted Best Online Store in the WebAssist 2012 global awards, organised by the Californian software giant. You can thus understand Deadgood’s delight at its own connection.

You can also see Deadgood expertise in lighting if you pass The Toffee Factory, >>

“I’m thrilled to be a part of this exciting young venture.” Hossain Rezaei

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ENTREPRENEUR award-winning landmark building recently completed, scintillatingly, for the creative and digital sector on Newcastle Quayside. Xsite Architecture had Deadgood create nine big spun hemispheres to light the reception area.

Deadgood has now made these hemispheres part of its range.

BQ met Elliot on his return from Deadgood’s fourth appearance at the 100% Design exhibition at Earls Court, part of a London design festival. They had used the key opportunity – 25,000 mainly-trade visitors in four days - to launch a range of lighting, and a stool inspired by charity awareness ribbons.

The designer concerned had liked the ribbons’ shape, and it was decided to offer charities at the same time a royalty. The rotationally moulded plastic stool has a recycled plastic core, with upholstery suited to commercial use. The colour palette of fabrics and finishes is extensive. The lighting has aluminium extrusions and is cost-effective for commercial interiors. “Our products and brand must imply fun, excellence, precision, craftsmanship, taste and innovation.

“This way, we are reaching the most discerning audiences,” Elliot explains.

Business can be cut-throat though.

They were angered by the numbers of individuals taking photographs of items at their Earls Court stand, clearly to serve as blueprints compensating for their own lack of ideas. They had already before spotted a lamp identical to one of theirs on sale at a major retail outlet. Their complaint there brought an immediate withdrawal.

Deadgood’s progress is remarkable, given that Elliot and Dan had little money themselves to invest, and no business background.

It must speak well too for the entrepreneurial culture of Northumbria University. The two were lucky in being able to spread entrepreneurial wings at a time when public money for start-ups was more plentiful. It required truffling. But Elliot and Dan promoted not only their own work but that of other designers raw like themselves.

They’d graduated in three dimensional design, Elliot an admirer especially of Verner Panton, one of Denmark’s most influential designers of modern times, Paul Smith in London, and Marcel Wanders, the Dutchman hailed by

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the New York Times as “the Lady Gaga of the design world.” Their first four years after graduation were spent with a designersin-residence project at the university. They were mentored simultaneously at a hatchery for small businesses. Roger Candy, the enterprise manager at Northumbria University, encouraged them to prepare their business plan. They did it initially not on the back of the proverbial cigarette packet, but on the back of a beer mat. Then over two years they developed it, amassing information through mentors – accountants, lawyers, journalists – giving them insights. “It’s been a steep learning curve,” Elliot admits. “But now we’re both as passionate about business as about the creative angle. Our long-term aim is to be a platform from which emerging designers can work with an exciting young brand. We work already with about six other design studios run independently. “We take certain products of their range into our Deadgood brand. We give an agreed royalty. That way we continue to work with other young creatives. That type of opportunity never existed for us. But we want to offer an aspirational brand other young designers we want to work with.”

They’ve already attracted Lee Broom (Designer of the Year at the British Design Awards in 2012) and Max Lamb (Designer of the Future in Design Miami/Basle in 2008). Elliot, 31 now and married since 2006 to Victoria, lives in West Newcastle, where they are raising daughter Molly, aged two, and son Freddie who was 12 weeks old as we talked. Elliot now designs less himself, concentrating more on creative direction – which designers to work with, types of product preferred, also branding and photography.

“I soon realised I wasn’t the best designer so we leave that to others better than me,” he says modestly, and in contrast to triumphant sounds otherwise from the company’s press release. The partners work apart a lot now, Dan having two and a half years ago moved to London to run Deadgood’s premises opened at Islington. “With that, the business has become a lot more efficient,” Elliot says.

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Dan, 30 and married to Danielle since May, shares the London office with Vicki, the firm’s sole employee. She’s a designer who also deals with sales administration and the logistics and supply chain. A sales representative they had for nine months was lured away by a bigger company. But they also have interns and placements, usually one or two at a time.

Dan works closely with in-house designers, and designers favoured by Deadgood. He also has key relationships with their manufacturers, and looks after product development. Dan is from Long Eaton in Derbyshire, Elliot from Holmfirth, Yorkshire’s paradise for walkers and the setting for TV’s Last of the Summer Wine.

Both on graduating had talked of moving to London – “creative capital of the world, with huge opportunity.”

But, says Elliot: “We also felt that in setting up there first we might get lost.”

Amid the flurry of money creative industries bathed in between 2004 and 2007, they secured £7,000 from the Arts Council, for initial marketing and prototypes to exhibit at a trade fair in London. That enabled them to win a talent award. They gained legal advice, and were also advised to contact their regional development agency and Business Link advisory service. The current business sprang up in 2008 with £150,000 of support from One North East and the Design Creative Fund.

This launch-time booster arrived the same week the global financial crisis arose.

However, last year they secured £120,000 through Rivers Capital Partners, the independent venture capital fund manager formed in 2009 as a joint venture by its founding partners, Finance Tree and E-Synergy.

They also raised £30,000 more angelically through a second tranche of finance matched

by David Cottam, chairman and finance director of Cottam Investments Ltd. and Cottam Brush Ltd of South Tyneside.

Elliot says: “While we don’t assemble product ourselves, we do take it to market.

We felt David could be very helpful with manufacturing expertise, logistics and distribution.” Indeed they have recently >>

Trend setter: Elliot Brook, one half of Deadgood’s dynamic duo

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ENTREPRENEUR decided to outsource their warehousing and assembly side, enabling them to concentrate on where they’re adding value.

Also through Rivers the partners gained a chairman, Hossain Rezaie. The Stocksfield multi-millionaire, using his engineering knowledge honed at the polytechnic that became Northumbria University, had early in his career proved ethnic breads could be baked in electric instead of fired ovens. He then built his Pride Valley Foods at Seaham into Europe’s biggest specialist breadmaker, before selling it to Gruma, the world’s biggest tortilla manufacturer for £20m. An adviser who can sell brushes to China and an adviser who can revolutionise aeons-old practices, as David Cottam and Hossain Rezaie are, promise powerful support, especially amid confidence expressed by Rivers Capital Partners.

Deadgood’s daily hurdle now, as Chapmans’ managing director John Chapman might affirm, is getting the orders in. Young design talent on one side, big established companies on the other - the latter dominating markets through tie-ins with dealers who have relationships with the clients.

“The biggest thing for us is to be seen scaling ladders, to have client confidence that we can deliver and are not just young designers,” says Elliot. “And we’ve secured some great clients recently - Holland Park School in West London, for example.

“About 700 stools have gone in there. We worked to win that over two-and-a-half years.

Ours isn’t a quick sell industry. Not just a meeting, a handshake and deal closed. For us it’s more a whole chain of events.”

So do they have to moderate their ideas to satisfy the markets? “We do develop a lot based on feedback. One stool we put out to market drew a great response. But the client base suggested a range of tables to accompany. We’ve produced that. There needs to be a chair too. That’s currently in development. But in concept over all, we just go for it. We’re quite headstrong.”

Price-wise? “Very competitive. The education sector we’re involved in is hard on pricing. We have to be competitive, no handcrafted items costing tens of thousands.”

But things can be made to order. A client in Madrid loved a sideboard offered in

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their Parq Life Collection - its solid brass surface with walnut veneers. For restaurant purposes, though, it had to be smaller and higher. Easily done. To remain a lean, flexible firm, Deadgood outsources extensively but championing British interests.

Elliot says: “We use British manufacturers scattered round the country, including at Washington near here. We also outsource the branding, the marketing and communications.

We get a couple of things from Slovenia (timber) and China (mirrors). But a key value for us is to promote the UK in production as

much as possible. We’re 95% British and well positioned to do that.”

They believe a turnover of around £550,000 this year could become £5m within five years, with their present portfolio of 40 products up to 150.

Elliot says realistically: “Our business is governed by the construction industry. Fewer buildings are going up and furniture is the last thing bought. So if there’s any budget cutting it’s normally the furniture that’s hit. We’ve lost projects due to the climate we’re in. But we are winning others also.” n

Power of two: Dan Ziglam (left) and Elliot Brook (right)

“Dan and Elliot are rapidly developing into a vibrant and successful brand that is swiftly gaining a huge following within the UK design industry.” Trevor Duncan, head of three dimensional design, Northumbria University School of Design

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E X P E R I E N C E M E E T I N G S M E E T I N G S D E S I G N E D W I T H S P A C E T O T H I N K , F R E E W I F I A N D F O O D F O R T H E M I N D .

A L L T H E R I G H T I N G R E D I E N T S F O R S U C C E S S F U L M E E T I N G S .

R A D I S S O N B L U H O T E L

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R A D I S S O N B L U R O Y A L H O T E L , C O P E N H A G E N

E X P E R I E N C E S U C C E S S

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SUCCESS STORY

The X-it factor

It’s hard to exit a business now at a price one would like to realise, but private banker David Simpson tells Brian Nicholls there’s a build-up of guidance to help both the sale and the personal situations that follow

Many business owners are in quite a quandary now - when best to exit their company and look for a new opportunity or change of lifestyle? Recognising this, Coutts private bank is publishing a national report, Life after Exit. It’s based on the outcome of a series of dinners that the world’s seventh oldest bank held during summer in various locations. It took “a pulse check” on “been there, done it” ex-bosses who, having experienced the scenario earlier, have pearls of wisdom to share. Guests at a launch dinner in Newcastle shortly will gain insights into the challenges an exiting aspirant faces, both commercially and in psychological adjustment new lifestyles require. It’s tougher in today’s economic milieu to realise a price once expected from selling, harder to find a buyer, which may in turn temper lifestyle options.

But decisions are necessary regardless of market forces. David Simpson, Coutts’ senior client partner in Newcastle, knows them well.

“A lot of the things, I think, people don’t consider until the deal is done and money’s in the bank,” he says. “I believe they often feel

they’ll adjust to the inevitable change much quicker than they do.”

Some of it’s about the vacuum accompanying most retirements – like that around the newly retired husband following his wife round the supermarket to fill in time, till she suddenly wheels on him and shouts: “Will you get yourself another job! I’m sick of you following me round.

“I’ve had my own life for 30 years and now you’re in the way.”

David says in many ways there’s no such thing as a typical business-exiting client – or a typical exit. “He or she may be anywhere between mid 30s and late 50s. Of course, over the last three or four years exits have been much harder to obtain generally. There hasn’t been the money around. Now why would that be?” he asks wryly.

“Clients who considered exiting five or six years ago may have had to have their expectations managed in terms of value. Those who exited, say, in 2006 may have been just in time. They wouldn’t now realise anything like the value they did.

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“So in many cases being in the right place at the right time comes into it. Also, realism towards the value applies. It can be very subjective. Like selling a house sometimes, isn’t it?”

Few people now, in good times or bad, consider full retirement abroad. With little financial landmines popping up for expats in other countries nowadays, that may be sensible. A lot have properties abroad but, says David: “Living out in Spain or wherever can be very different from extended holidays there.

Most people have ties of some kind to the UK, be it family or other emotional links.

“While in theory moving to the sun is an attractive idea in many ways, I think people are reticent about upping sticks completely. They often decide it’s not all it’s cracked up to be.”

A number of people, having disposed of their own business, aspire to a portfolio of nonexecutive directorships. Particularly when they are older and may no longer wish to spend 80 hours a week running things, but would happily work at three or four non-executive directorships where their skills and >>

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SUCCESS STORY experience may be valued. “we’re not a marriage bureau,” david says. “but if we can point them towards a company needing someone like them, we can do so. on a totally non-commitment basis, we might have a conversation...” someone seeking total change at 48 might fancy social enterprise. “we’re well networked on this too,” david says. besides having local contacts, coutts operates a family institute ready to help the family business owners who may have provided for their family’s future needs and additionally wish to set aside a sum “to give back”. often they may feel vague about what they want to do. “sitting for a consultation around that can be very beneficial to them – but not giving ideas as to where exactly their money might go. that’s a very personal thing. “again, though, there may be areas where we can make further helpful introductions. the joy

Greater protection soon on January 1 the retail distribution review comes into effect, stipulating a transparency of dealings and certain standards of vocational qualification in wealth advice. there will be subtle differences in charging, and how that’s communicated going forward. but coutts is proud of its transparency with clients already, and all its advisors for some time have been qualified above the standard required. david, a local lad through and through, says: “when i moved to coutts i wanted to be involved in private banking but had never seen the necessity of going to london to do that. the majority of clients in our region don’t wish to be dealt with by london. we here are, of course, part of a london based organisation. but hopefully that delivers the best of both worlds. you can draw on the widest possible expertise but keep the local delivery.”

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of our job is that it’s wide ranging. “you work to the client’s agenda - trying often to tease out areas important to them, but which may not emerge until you’ve explored issues they may not have had chance to explore with others. “entrepreneurs and business owners often realise one day they’ve been working in quite a lonely way. they’ll have friends, colleagues and acquaintances. but it’s still difficult, often, for the owner manager of a substantial business to have someone to bounce ideas about personal matters off.” first, though, what chance of a return to a “normal” economy offering a favourable financial get-out? david replies: “you talk about normal. i remember having this kind of conversation in 2007-8 when some people said ‘give it a few months and things will be back to normal’. personally, and as part of an organisation, i think the feeling is that what we have now is pretty much the new norm. “maybe what we experienced in the previous 15 to 20 years was abnormal. historically, massive year-on-year growth in the economy was never the norm. massive house price increases were not the norm, long term. so we’ve experienced for different reasons some rapid expansion over a fairly short period. “now it’s partly about managing one’s expectations of steady, rather than colossal short-term, growth.” there are other realities. “people who maybe thought to sell out five years ago are now five years older. so there’s a raft of folk who, through age, will be nearing a stage where they feel now’s the right time to exit. perhaps that manages their expectations in terms of the value of it.” a lot of aspiration at exiting, of course, centres on what can be generated from capital in retirement. david suggests: “if you purely and simply look at interest rates there’s no prospect of them going anywhere in the foreseeable future. someone relying wholly upon money on deposit in the long term will see a significant reduction in its real value over time. “from an advisory perspective, that’s where we have our part to play - looking across the asset base and asking ‘well, what is it your money needs to do? how does that tie in with your attitude to risk, for instance? what can

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A lot of the things, I think, people don’t consider until the deal is done and money’s in the bank. I believe they often think they’re going to adjust to the inevitable change much quicker than they do you realistically expect over a period of time’? “while the economy has changed, a lot of what we do with clients hasn’t. we still advise in light of their own circumstances, the circumstance of the market and what’s available within the panoply of services.” to this end private banks, and certainly coutts, works closely with other professionals in the area. “our approach to clients’ arrangements is holistic,” he says. “we must understand where they’re coming from to begin with. we start with a blank sheet of paper. i don’t sit with a client and say ‘what you need is x y and Z’. how the devil would i know?” before pounds and pence there has to be an examination of backgrounds, hopes and family circumstances. “clients trust us with very discreet information. so as a trusted advisor, you have conversations very confidential, often about deep and secret issues. this may be in tandem with their lawyer or their accountant, to ensure that structures around their wealth and their assets fit sensibly.” discretion, of course, is what you’d expect of the Queen’s bankers. but do they counsel against ordinary mortals making hasty decisions? “that depends on the individual. those who would make fast decisions >>

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SUCCESS STORY are usually very much their own people. one can counsel a more conservative and cautious approach. however, we’re not here to preach. we explain our own experiences and history, and what we’ve seen in other scenarios.” generally the inclination is to counsel individuals to take time and take stock of their new situation. “it’s not simply about having a pot of money around. it’s about new circumstances and lots of other things to think about - not least what they’re actually going to do with their suddenly free time. “coming to terms with that may take some people several years. because there’s a pot of

David Simpson in person Education: King edward v1 school, morpeth.

Career: barclays bank – various roles mainly in the north east 1983 -1997, including setting up premier banking locally. coutts - 1998- to date. Joined coutts when the newcastle office was opened. currently executive director, heading the office and advising a portfolio of high networth private clients.

Outside interests: cricket, golf, the prince’s trust (development committee member), methodist local preacher.

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money doesn’t mean you must do something with it immediately. there’s almost an educational process to go through, and i don’t mean that patronisingly.” someone who has known and controlled a business for 20 or 30 years will suddenly have this pot, then, that they may now ask someone else to deal with. “it would be an odd entrepreneur indeed who one day said ‘ok, go off and do your worst,” david muses. historically the number of classic serial entrepreneurs in the north east is probably relatively small – the sir John halls, chris thompsons and duncan bannatynes – may be exceptions. but that may be true of regions generally, in david’s view. why? “it’s difficult to say. it may be a general conservatism with a small c, in that people here have built their business up and have been able to lock in that value, and they’re either not prepared or are not interested to do it again.” also, he thinks, it may go back to trials and tribulations of the 1970s and 80s, particularly for the heavy industries, as people maybe spun out of those or had ability and opportunity to set up on their own. that was what they wanted and hadn’t any particular views over and above. now, once they’ve turned to bonds and equities to a greater or lesser degree, and perhaps have put aside some “play money”, if they don’t put a lump sum into some totally new project of their own, they may choose to re-invest in ventures of others. here they must understand the ventures, and ensure good money is not following bad. becoming business angels is, indeed, a growing trend in the north east, and coutts for some years has had links with the like of business investors group, local entrepreneurs who invest individually or collectively with insight. others moving out sometimes incline towards philanthropy, perhaps less a legacy than an investment in a social enterprise. whatever their preferences, people are deferring their exit perhaps more than they might have done. “they haven’t a choice a lot of the time,” david says. “probably over time there will be an uptake in exiting deals. but i think it’ll be slow and steady, not a sudden surge, since conditions surrounding business are not suddenly going to change. that’s not

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While the economy has changed, a lot of what we do with clients hasn’t. We still advise clients in light of their own circumstances, the circumstance of the market and what’s available within the panoply of services being downbeat - it’s being realistic. “the whole economic issue now is about getting debt down. that’s being addressed both corporately and privately. but i think it takes a long time. look at some of the refinancing that’s had to go on. that’s no short-term fix. you’ve a contradictory situation of banks being encouraged both to build up their capital base and to lend more at the same time. i’m a simple soul, but how do you do that again?” that kind of process offers no silver bullets, david believes regretfully. but for coutts’ 12 strong staff in newcastle it remains, amid change, a matter of one-to-one relationships. what shouldn’t change, they believe, is the consistency in the personal relationship, whatever is happening beyond. “we’re not soothsayers,” he stresses. “but people do look to us to interpret. we can give an informed opinion based on what has happened before.” significantly the core team at coutts, barring some retirements, is what it was at start-up in newcastle in 1998. n

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IN ANOTHER LIFE

AUTUMN 12

Originally from the North West, Heather Ashton settled in the North East 12 years ago, having fallen in love with the region’s coastline on holiday. Outside work, she’s keen on ceramics painting and dreams of running a bed and breakfast. Her driving passion, inside and outside work, is to inspire young people and help them towards their goals and potential.

Heather is group director of finance and corporate services at Fabrick Housing Group which, from Middlesbrough, incorporates Tees Valley Housing, Erimus Housing and Norcare

Mapping out what might have been Back in university days, I might not have gone into a life of numbers - at least, not in the way my career has taken me.

Managing Fabrick Housing Group’s finances is about achieving excellent governance and order with dynamism. This clear vision for the group can only be achieved through attention to detail, openness and good management.

That element of order has always appealed to my mindset.

However, one side of my personality has always had potential to take me away from this rigidity, and that is my love of art.

Art and order may not seem a natural fit, but there’s one career which could have blended the two: cartography.

I love drawing, and I was enthralled by maps and plans. I may not have been creative enough to be a Picasso. But cartography would allow the logical, structured side of my personality to blend with the creativity of what I see as beautiful images, representing places on a flat piece of paper.

The recent move from Fabrick’s old offices into new premises on the banks of the River Tees in Middlesbrough has allowed these elements to come together with a specific purpose.

Overseeing the process, I became heavily involved in the plans for the new space,

BUSINESS QUARTER | AUTUMN 12

Drawn back to an old passion: Heather Ashton, Fabrick Housing Group working on the designs and ensuring the building would be just as it should be, ready for my colleagues to move in.

While I don’t see myself moving out of the financial sphere, it has been very interesting to get a glimpse of this type of career and what might have been, had I followed this alternative path to work on maps and plans, instead of profit and loss, and the attention to

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the other necessary details of business life.

In those moments when I allow myself to dream about “what if I had done things differently?” or a post-Lotto win pastime, with the exception of running a bed and breakfast my thoughts invariably come back to art. Then my sense of order kicks in and I find myself thinking of a life mapped out differently, as a cartographer, charting the world. n

AUTUMN 12

COMPANY PROFILE

A year worth shouting about Despite forming less than three years ago, Shout Digital has become one of the North East’s best-established creative digital and online marketing agencies.

In their quest to build upon their position as one of the UK’s top 100 agencies, BQ finds out how they’re now at the internet’s top table alongside Apple, Facebook and Microsoft.

Shout, the award-winning creative digital agency based in Newcastle and London, has had quite a year.

Thoroughly unfazed by the double dip recession and not only keeping pace but leading an emerging and ever transforming market, Shout have achieved great things in 2012 and remain convinced that the state of the UK economy will pose no threat to their ambitious growth strategy.

Listed in the RAR Top 100 Agencies Outside of London just this month for the second year running, the company has recently been shortlisted for numerous awards including North East Marketing Business of the Year, the Mi Awards Digital Agency of the Year and Managing Director of the Year.

Shout’s client list this year has included both established global powerhouses and exciting new ventures across a number of vertical sectors: brands like GFI, Sage, Nova International, GoSum, St Ermin’s Hotel, OK Magazine and NAC Group. The agency has led strategic breakthroughs for clients in online marketing, app development, digital strategy, social media and website creation and management.

They’re well on track to achieving MD Gary Boon’s aim to reach to £5m turnover mark by 2015. In the last 12 months Shout has doubled its turnover, breaking the £1m barrier. With a burgeoning team of 16 staff, they’ve had to up sticks for larger premises for the third time in as many years. Thankfully they now have plenty of space for expansion; Shout’s new home is a 3,000sq ft agency space overlooking the NewcastleGateshead quayside.

They’ve also been giving back to the industry. This year, Shout became a member of W3C, an elite international community committed to ensuring

Managing director of Shout Digital, Gary Boon

“The entire team is hungry and wants to make its mark. Our ethos, our work quality, our delivery and our honesty place us in a position where anything is possible.” the long term growth of the web, founded by the father of the internet, Tim Berners-Lee. They’re the only agency in the region to be taking part, alongside tech giants like Apple, Microsoft and Facebook.

All this is pretty impressive for a company still less than three years old. However, Shout are by no means content to rest on their laurels. Having consolidated his company’s position in the region, Managing Director, Gary Boon’s eyes are on the prize of a place in the Top 100 Digital Agencies in the UK. How will they achieve their aim? Through Shout’s integrated and ingenious approach to finding solutions to whatever their clients throw at them, their uncompromising commitment to

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innovation and their second-to-none customer service. ‘We started off lean and hungry and it’s how the business will continue to grow. Our entire team are hungry to make our mark. Our ethos, our work quality, our delivery and our honesty all place us in a position where all this is possible.’

Further information on Shout Digital is available on their website at www.shoutdigital.com

BUSINESS QUARTER | AUTUMN 12

IFG_

PRINCE’S TRUST

with John Wall

DRiving a £65,000 SuCCeSS almost 1m young people in the uK are struggling to find a job - enough to fill St James’s park stadium 19 times over. and more than 50,000 are in the north east. a survey by the prince’s trust and RbS suggests 74% of newcastle’s young folk claim life’s harder than ever for the unemployed. and 52% think finding a job’s harder now than last year.

Yet threequarters of those interviewed in the city believe setting up in business would give a sense of achievement and purpose, while half think it a viable route out of unemployment.

Many disadvantaged young people helped through the trust’s enterprise programme (supported by eRDF) have in fact become their own boss, employing others too.

Claire bourne of Darlington was a single mum struggling to support her young children. before coming to the trust she was lucky to have just £1 spare each week. never previously self-employed, she now owns a successful enterprise. the trust’s north east Leadership group brings together members of the business community

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who, through fundraising events and other activities in the region, enable the trust to perpetuate its supportive work for young people who may have struggled at school, been in care, are long-term unemployed or have been in trouble with the law. nigel McMinn, managing director of benfield Motor group and chairman of the Leadership group, helped raise a staggering £65,000 for the trust in october through the benfield annual golf tournament at Slaley hall in northumberland. alan Shearer hosted. “the trust does great work in the region,” he affirmed. other sporting legends there included olympic gold medallist Jonathan edwards, gareth Southgate, and Durham and england cricketer Steve harmison. tv’s Ralf Little was there too, and over 50 teams played. More than 300 guests shared the day on Slaley hall’s 1,000 acres of moorland and forest, enjoying a champagne reception, black tie dinner and trophy presentation. nigel says: “the trust’s work locally is making a real difference for young people, and we’re proud to support them and their work.”

Last year more than 3,700 13-30 year olds

in the north east were supported, with three out of four going on to work, education or training. Chris gray at the trust says more than £1m a week has to be raised. So... in october a Ladies who Rock event at the Discovery Museum, led by alison Morgan of portland group with fashion designer Jeff banks, was a resounding success too. in September the Leadership group welcomed Sir ian gibson, former vice-president of nissan and non-executive chairman at Morrison’s. he returned to the factory and told members about manufacturing at nissan, and the team based leadership style he developed there. and on november 24 Dave Meldrum and balfour beatty will host a Demolition ball, while on January 31 the group’s first gala business Dinner will be held, led by ian gilthorpe of Square one Law, and with John inverdale the keynote speaker. all this is to help inspire a new generation of entrepreneurs who’ll help boost the local economy and provide jobs for others too. Disadvantaged young people of the north east must not be forgotten. n www.princes-trust.org.uk/about_the_trust/ in_your_region/north_east

A “swinging” party: Stars whose golfing will help young people into work ONLINE: The Princes Trust recently organised a visit from Morrisons chairman Sir Ian Gibson to his old haunt, Nissan’s Sunderland plant. BQ was there. www.bq-magazine.co.uk

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MEDIA BRIEFS

The Scrutator >> Flops galore, dash it all it’s only a dash of a difference – but what a difference. ignore “serviceability” and think instead “service-ability”. then you see a failure of many businesses.

Kevin Robson, a north east expert on service, maintains that while our economy is increasingly service orientated, we still fail often to give good service. he blames technology a lot. “increasingly we see technology used as a surrogate for the personality of the employee, or as a mediator of the relationship with the customer,” he explains. in Service-ability (John wiley & Sons, £33), his newly published book of 224 pages, he points to the plethora of multi-choice phone systems and call centre operations.

Customer facing employees, he points out, can no longer use their initiative to feed customer needs for creative solutions. Systems meant to make things easier instead are leading to stress and burnout in employees, and antagonism from customers. the consumer is fighting back, using the same technology. tripadvisor.com has been causing near panic in the hotel industry. and Youtube video united breaks guitars since 2009 has spread a damning message to more than 11.5m people worldwide with an account of united airways’ attitude to customers. the result: Companies now need to have customer service levels mediated in social media.

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also in britain, he says, ideas linger on both sides that customer service work is inferior. after all, he reminds us tartly, it’s only 100 years since being in service meant being a servant. he cites call centres with underpaid and undertrained young people who often regard the work as stopgap.

Many public services are also burdened by ongoing litigation for service failure. private firms, particularly those subjected heavily to external regulations (such as financial services and the insurance industry) are having energies and profitability sapped by ongoing complaints procedures. how many of us have experienced the “if it isn’t on the screen it doesn’t exist” syndrome during attempts to book a holiday, or when trying to persuade a public utility to rectify an account error? how many of us have fallen victim to “expert” systems on computers that make broadstroke decisions on credit worthiness, insurance risk and myriad other things? there’s growing awareness – as in Santander’s decision to repatriate customer service centres from abroad back to the uK – and Lego group having recovered from difficulties by no longer making staff follow scripts or be measured by threat of dismissal over length of call handling times. as no two customers are alike, the customerfacing employee needs freedom to act on their initiative to satisfy the customer. it’s the very key to competitive advantage in the 21st Century, Robson suggests.

Robson, a former gateshead grammar schoolboy now living in newcastle, recently argued his case at a Design Means business conference in gateshead. he holds a graduate diploma in marketing and an Mba from Durham business School, and as an associate of the school’s small business unit he advised for five years on SMe development programmes, management competence frameworks and commercialising academic innovation. he has also lectured at Durham, newcastle, northumbria and the open university, but is no mere theorist. he ran his own companies for more than two decades, was chief executive of an international charity then became a freelance business development and management consultant and commercial mediator.

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Mike Darrington: Wins IoD support

>> So say we all bravo, Simon walker. the director general of the institute of Directors wants connection restored between executive pay and performance, just as former greggs boss Sir Michael Darrington suggested in an earlier bQ. in the ioD’s stimulating quarterly big picture, he agrees many FtSe executives are paid more than their company results justify. “the public are not being unduly radical but simply seeing the evidence and drawing understandable and accurate conclusions that this is undeserved, harmful to the reputation of business, and the capitalist system,” he says. he believes damage to workforce morale will impact on productivity and industrial relations, and goodwill among customers and investors will be lost. the average ioD member is paid nothing like FtSe 100 executives. but as business people they too will suffer reputational damage by association, he fears. his sting in the tail: Membership of remuneration committees is seen inadvertently but increasingly as a retirement role. this should not be. he wants greater diversity there of business sector, personal experience and career stage. amen, say i, and perhaps Sir Michael does too.

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BIT OF A CHAT

AUTUMN 12

>> Next down the line

with Frank Tock >> Next down the line Sir Richard branson’s successful retention of the west Coast rail franchise, albeit temporarily following a review of bids for the next term, raises prospects that he may be a front runner for the east Coast Main Line, whose franchise neither gneR nor national express proved able to fulfil.

Firstgroup’s higher bid than virgin’s for the west side looked questionable, given branson’s proven acumen. Firstgroup’s calculations, have been doubly ironic, coming out the day passengers everywhere learned fares will rise 6 to 11% - more than triple inflation – from January, and with taxpayers now being fleeced of £40m through civil servants assessing the west Coast bids incompetently. the present rail system devours more state investment than much maligned british Rail ever got. time to rethink.

>> A link we need i hope sooner rather than later some Regional growth Funding will be given towards the restoration of ferries between the north east and norway. the route was axed in 2008 amid competition from budget flights and rising fuel costs. Loss of trade and tourism to both nations has been considerable. norwegian line Seaways, with north tyneside and newcastle Councils and norwegian investors, proposes restoration. up to 270 jobs could follow. Fingers crossed...

BUSINESS QUARTER | AUTUMN 12

Ready to launch: (l - r) Ebac’s John Elliott , Amanda Hird and Pamela Petty prepare to make washing machines (Picture by: Richard Jemison) pamela petty’s won widespread support since disclosing in our previous bQ ebac’s intention to re-establish white goods manufacturing in britain. now, with a £1m contribution from the Regional growth Fund, washing machines will once more be manufactured in this country, doubling an existing workforce of 200. pamela, group managing director and finance director of the newton aycliffe firm, says: “it

>> Bedtime story given the regrettable rundown in Remploy factories and jobs, it’s great that palatine beds, with a century-plus tradition of bedbuilding, may increase staff by 20% with the launch of a new mattress range from its factory at westerhope in newcastle. it’s great, too, that the firm has already won a place on a Scottish government framework that could bring up to £5m of new business a year over four years. Scotland wants public bodies to buy from businesses employing disabled people. this bodes well for the region’s largest employer of workers with disabilities, some of whom have been with the firm more than 33 years.

Founded in 1907 as a workshop for the blind, palatine beds was built on £10k bequeathed by entrepreneur george handyside, of newton on the Moor. he’d made his fortune through 50-plus boot repair shops he developed from the age of 18. he later distributed free medicines among the poor. when he died at 83 in 1904 more than 1,000

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seems we really hit a chord with your readers. their sentiment echoes that we must, as a nation, get back to being self-sufficient, creating jobs that give families chance to provide for themselves - to become a proud nation with a culture of working for the things we have, not expecting handouts or to get rich at another’s expense.” ebac’s great existing reputation for dehumidifiers and coolers is already being enhanced by another new product, airsource heat pumps, and pamela hopes if the washing machines sell, fridges and freezers may also come online. Months of research have gone into this. as ebac already exports half of what it manufactures, it could cheer our trade balance further if we and “them abroad” found County Durham washing machines the thing to have. around 4m washing machines are bought yearly in the uK, all of which are imported. and pamela, bless her, still talks to us though we misspelled her surname last time out.

(largely impoverished) mourners attended his funeral. today palatine beds, managed

by Your homes in newcastle, employs 42 people, 32 of whom joined under the state programme to help people with disabilities get a job. Shouldn’t this be a business model as Remploy’s shrinkage takes painful effect. www.1907beds.co.uk

>> Doing their bit Finally a heartwarmer... Staff at Seaham based business & enterprise group have braved dizzying heights, gruelling runs and painful leg waxing to raise £4,000 over a year for Macmillan Cancer Support. their activities included skydives, bake-offs, dress down days, quizzes and a half marathon. wendy Roddam, one of the skydivers who raised over £800, says: “it gave me an opportunity to do something for a good friend who was diagnosed with unoperable cervical cancer. Macmillan were a fantastic support during her last months.”

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EVENTS

AUTUMN 12

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 editor@bq-magazine.co.uk and please put ‘BQ events page’ in the subject heading

NOVEMBER 2 north east women entrepreneur of the Year awards, hilton hotel, gateshead.

0191 385 6619, info@womenintothenetwork.co.uk

20 ioD north east, Dining with national Chairman ian Dormer, northern Counties Club, newcastle (7pm) 20 neCC workshop, export Control, Ramside hall hotel, Durham (9am).

3 entrepreneurs’ Forum business conference, Fortune Favours the brave, hilton gateshead (7.30am). hazel@entrepreneursforum.net

20 noF networking Lunch with amec, hardwick hall hotel, Sedgefield (10.30am).

0191 384 6464. k.leng@nofenergy.co.uk

5 Routes to investment, workshop for SMeS, newcastle City Library. 0191 285 7100, michelle@hilaryflorekpr.co.uk

21 South tyneside Manufacturing Forum, Speaker tba, bede’s world, Jarrow (noon). 0191 427 2324

5 FSb South tyneside and wearside branch agm, Sea hotel, South Shields (7.30pm)

22 Durham/tees valley CiM, ambush Marketing impossible for today’s Markets, David thorp, ebsworth building, Durham university business School complex, Stockton (6pm), 01628 427 340 cimevents@cim.co.uk

6 CiM north east, intellectual property, David hopkins, Science Complex, Sunderland university (6pm), cimevents@cim.co.uk, 01628 427 340 6 neCC course, Dangerous goods by Land and Sea, hartlepool enterprise Centre (9am).

7 north east top 200 Companies presentations, Copthorne hotel, newcastle (8am), lesley.hampson@trinitymirror.co.uk 7 north east expo, newcastle Racecourse, 220 firms exhibiting. www. northeastexpo.co.uk 8 Meet the buyer, construction industry event hosted by Constructionline (public/private sector partnership between Capita and the Department for business, innovation and Skills), Durham County Cricket Club (8.30am). www. constructionline.co.uk/static/events/neastmtb/htm.

8 Robson Laidler property Conference, Sage Software hQ, gosforth (5.45pm). sbowen@robson-laidler.co.uk 8 neCC networking, holiday inn, Seaton burn (4.30pm) 12 uKti export week, Mid-size businesses Lunch, hosts uKti, Lloyds banking, Rockliffe hall, Darlington. enquiries@uktinortheast.org.uk, tel 0845 05 05 054, www.eventbrite.co.uk

22 eeF event, Data protection: are You Compliant and Ready for the proposed Reforms? eeF house, gateshead (10am).

23 uK energy Strategy: Showcasing Capability of the north east to Deliver, Durham County Cricket Club, Chester le Street (8.30am).

29 Durham Speaker Series, FiFa world Cup referee howard webb, Durham university business School (6.30pm). dbs.eents@durham.ac.uk 29 north tyneside business Forum workshop series: access to a Diagnostic tool, Quadrant east, Cobalt, (7.30am). Sandra 0191 643 6000, business.forum@ northtyneside.gov.uk

DECEMBER 6 nSCa, Martyn ingles, Ramside hall hotel, Durham (1.30pm). Marie Rice 0191 300 0532 or Marie.Rice@icaew.com 6 noF energy annual Dinner, hardwick hall hotel, Sedgefield. 0191 384 6464, k.leng@nofenergy.co.uk 6 neCC networking, Copthorne hotel, newcastle (11am)

13 ioD north east, the Role of the operations Director, ward hadaway, newcastle (7.30am). 0191 213 1289

10 Routes to investment, workshop for SMeS, newcastle City Library. 0191 285 7100, michelle@hilaryflorekpr.co.uk

13 uKti export week, picking up the export Challenge, hosts uKti, Federation of Small businesses, Redworth hall, nr Shildon. enquiries@uktinortheast.org.uk, tel 0845 05 05 054, www.eventbrite.co.uk

19 South tyneside Manufacturing Forum, Speaker tba, bede’s world, Jarrow (noon). 0191 427 2324

13 uKti export week, Mid-size businesses Lunch, hosts uKti, Cbi, Lloyds banking, blackfriars Restaurant, newcastle. enquiries@uktinortheast.org.uk, tel 0845 05 05 054, www.eventbrite.co.uk 14 - eeF health, Safety, Climate and environmental update, eeF house, gateshead 0845 293 9850 14 uKti export week, export for growth international website Master Class, hilton hotel, gateshead. enquiries@uktinortheast.org.uk, tel 0845 05 05 054, www.eventbrite.co.uk 14 uKti export week, oil and gas networking Lunch, heerema focus, Cygnus project, Xcel Centre, newton aycliffe. enquiries@uktinortheast.org.uk, tel 0845 05 05 054, www.eventbrite.co.uk 15 north east business executive of the Year awards, gosforth Marriott park, hotel. Lesley hampson 0191 201 6435, lesley.hampson@trinitymirror.com 16 uKti export week, export for growth Reception, Marriott Metro hotel, gateshead. enquiries@uktinortheast.org.uk, tel 0845 05 05 054, www.eventbrite. co.uk 16 neCC seminar, Quality environmental, health and Safety Systems Management, neCC Durham (9.15am and 1.30pm).

19 noF business visit to australia (perth). 0191 384 6464, k.leng@nofenergy.co.uk 19 Routes to investment, workshop for SMeS, newcastle City Library. 0191 285 7100, michelle@hilaryflorekpr.co.uk

BUSINESS QUARTER | AUTUMN 12

JANUARY 17 noF energy, Decommissioning Lunch with CnR tbc. 0191 384 6464 22 CiM event, Developing Sustainable opportunities, speaker Simon Smith, newcastle university business School (6pm). cimevents@cim.co.uk, 01628 427 340 23 ioD north east director development breakfast, Director in the Dock, ward hadaway, newcastle (7.30am)

The diary is updated daily online at www.bq-magazine.co.uk Please check with contacts beforehand that arrangements have not changed. Events organisers are also asked to notify us at the above email 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, IoD: institute of Directors, NEA2F: north east access to Finance, NECC: north-east Chamber of Commerce, NSCA: northern Society of Chartered accountants, FSB: Federation of Small business, Tba: to be arranged, Tbc: to be confirmed, Tbf: to be finalised.

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Title Sponsor

Thursday 13th June 2013 Hilton Newcastle Gateshead

Deadline for Nominations Monday 29th April 2013

The Nigel Wright North East Accountancy Awards will recognise and celebrate the achievements of the North East of England’s accounting and finance sectors.

For further information on nominations, tickets and sponsorship please contact the event office on 0191 241 4523 or email info@accountancyawards.co.uk

Supporting Sponsor

www.accountancyawards.co.uk

PERFECT BALANCE

The New MaseraTi GraNTurisMo sporT The new GranTurismo Sport features a number of subtle revisions to further enhance and improve the performance of this outstanding car.

Available with either 6-speed, paddle-operated MC Shift manual or MC Shift Auto fully automatic transmission, the engine has been uprated to 460 horsepower. Suspension revisions improve the ride quality without affecting the superb handling balance. Inside the GranTurismo Sport features new front seats which not only improve comfort and support, but also allow for increased rear legroom. The GranTurismo Sport offers the optimum balance between performance and comfort and perfectly expresses Maserati’s Grand Touring philosophy.

The Maserati GranTurismo Sport MC Shift Auto is priced at £90,750 on the road. The Maserati GranTurismo Sport MC Shift is priced at £94,080 on the road. On the road prices include 3 year/unlimited mileage warranty.

For more information on the Maserati range, call 0191 211 2200 or email maseratisales@benfieldmotorgroup.com

Car shown Maserati GranTurismo Sport MC Shift Auto with metallic paint at £564 and 20-inch Anthracite Grey Astro design alloy wheels at £480. Official fuel consumption for the Maserati GranTurismo Sport MC Shift Auto in mpg (litres/100 km): urban 12.9 (21.9), extra urban 28.8 (9.8), combined 19.7 (14.3). CO2 emissions on combined cycle: 331 g/km.

Benfield Maserati Warwick Street, Newcastle upon Tyne, NE2 1BB Tel: 0191 211 2200 www.maserati.co.uk maseratisales@benfieldmotorgroup.com

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