IN this week’s SME Focus we hear how an East Kilbride-based business has used acquisitions to help it gain promotion to the big league.

Name:

Roddy Angus….. only my mum calls me Roderick now!

Age:

53…… but I try not confess to that and think I’m still in my 30’s most of the time!

What is your business called?

The holding company is DIO Ltd but we operate as ‘Merson Group’. There are a number of trading brands – Merson Signs, CGL Façades, ASG Interiors, Rainpulse, Merson Contract Management, ASG Brand exteriors, MSD, Merson Sign Management, i-Level Retail and NEU Design.

Where is it based?

The HQ is in East Kilbride where we have three separate factories. We also have facilities around London at Chessington, Luton, Basildon and Leigh-on-sea, as well as a manufacturing plant in Wloclawek, Poland.

What does it produce, what services does it offer?

We supply a number of distinct markets covering construction, brand implementation, events, shopfitting, design, architectural and infrastructure. The products and services relate to sign schemes, point of sale, external façades and internal shopfittings. We cover a range of services including design, project management, manufacture and installation.

Whom does it sell to?

We supply household names such as Tesco, Lloyds Bank, TK Maxx, British Land, M&S, Scottish Water, Belhaven, Volvo, Pizza Hut and TSB.

In the construction and infrastructure sectors we work with a vast array of contracting companies like Vinci, Balfour Beatty, Laing O’Rourke, Prater and Costain and with architectural practices. Our clients are currently live on projects like the Metro in Qatar and the Airports in Rio, Rome and Istanbul.

We have developed a track record of success in ‘Event Wayfinding Signage’ and in the last few years have implemented projects for clients like the London 2012 Olympics, the Glasgow 2014 Commonwealth Games and the Baku 2015 European Games.

What is its turnover?

When we bought the business in 2002 it had annual sales of £4m which were predominantly drawn from the Scottish market. In the current year we will turn over £27m and in 2016 this will increase to £38m following recent acquisition activity. The bulk of our business is now drawn from south of the border but increasingly we have started exporting to Europe and the Middle East.

How many employees?

We have 320 staff in the UK and 40 in Europe. Half of the UK workforce is based in Scotland.

When was it formed?

The business was initially formed in 1938 as ‘Scottish Neon Products’. We bought it in 2002 through a management buy out/buy in involving a team of four – two from within the business and two recent additions. I joined the business myself on 1 January 2000…… so been here all this century!

Why did you take the plunge?

We wanted to be in business for ourselves and were looking for a suitable platform from which we could grow a diversified international group.

What were you doing before you took the plunge?

Working as a Chartered Accountant giving small business advice.

How did you raise the start-up funding?

I borrowed from 15 credit cards (not recommended!) This gave me the seed capital to make the down payment to the vendor who, very graciously, gave us another five years to pay the balance out of the profits of the company – that was quite a long journey and often painful when the results of the efforts could not be taken home.

What was your biggest break?

Getting the opportunity to buy CGL Systems in 2012. This lifted our turnover from £18m to £24m and gave us a new base for the business. The company had been in the same factory since 1975 and we were bursting at the seams. We look at it now like digging a hole – you wonder where the pile of material came from and you would have no chance in getting it back in!

We completed the deal with £900,000 support from the Scottish Loan Fund, which is managed by Maven Capital Partners.

What was your worst moment?

Looking at the sales projection after the recession hit in 2008. We had just experienced a bumper £12m year and as the papers became increasingly depressing I remember reviewing the sales projection and for the first quarter of 2009 there was £200k – when we were forecasting £2.5m. I have vivid memories of the entire workforce facing me in the factory as I held up a selection of the papers while I explained that the max capacity overtime they were all experiencing would shortly end and that we would be discussing a four day week.

What do you most enjoy about running the business?

The freedom to put ideas into action and to do things the way I want to do them. We don’t tend to conform and always look for the new and innovative in our service offering. I’ve got to say there have been some disasters but, over the piece, staying true to our beliefs has kept us in good stead.

What do you least enjoy?

Employee Disputes – we just say to everyone that, until Aunt Jessy leaves you a fortune in her will or you hit it lucky on the Lottery, you have to work so why not make the most of it. We want to get on with our work colleagues and we want to enjoy what we do the best we can. It’s not all roses but if it’s too hard for you to get out your bed in the morning to come in and help the rest of us then do us all a favour and go and find the job that will get you out of bed in the morning!

What is your biggest bugbear?

Red tape – it just does my head in! There is a lot of it and fortunately there are people in the business who now do it all for me.

What are your ambitions for the firm?

To grow the top line to £100m and achieve consistent net returns so we can reward the people in the business.

What are your top priorities?

Profitability – without it you can’t sustain anything.

Sales growth – got to be going forward and there is just so far to go.

Employee rewards – have to be fair and ahead of the market.

Client service – without them we have nothing so we strive to keep them happy.

Diversification – we want to move out from, but not too far from, our core market.

What could the Westminster and/or Scottish governments do that would help?

We get innovative support from Scottish Enterprise who encourage our development and growth so I would like to see that continue. Outside this we need a stable political landscape, less red tape and simplified tax systems.

What was the most valuable lesson that you learned?

That no matter how bad it looks if I share my feelings we always get the backing from people in the business.

How do you relax?

My grandfather is to blame and I am just not happy unless I am on, in or near to the sea. Sailing is my passion and the West Coast of Scotland is one of the best places in the world to practice it. You’ll gather that I’m not that bothered about the weather – but this year has been a test!