Corporate fixer starts to work his magic

The City, not generally known for its appreciation of compassion in the leaders of companies, surprisingly has taken a similar view.

Earlier this month, analysts at Edison Investment Research wrote to investors about Maxima. “The trading environment remains demanding,” they said. “But a new management team and refocused strategy creates an opportunity to unlock the potential of the business model.”

That analysis could have come from Kingsmill himself, who, by his own admission, is big on “unlocking potential” – of which he sees in giant helpings at Maxima. To be sure, Maxima was formed out of the software and IT subsidiary of Scottish engineering giant Weir Group in mid-2001, just after the dot.com implosion that shipwrecked dozens of its would-be competitors.

Since then, the company, which manages IT systems for the likes of DVLA, Balfour Beatty, Caledonian MacBrayne and Orange, has built itself up through a 2004 listing on the Alternative Investment Market and no less than 14 acquisitions. It employs more than 400 workers at locations throughout the UK.

Kingsmill was brought in four months ago by the company’s former chief executive and founder Kelvin Harrison, who took the bold decision to instigate change amid a global slump that has hammered corporate spend – not to mention Maxima’s bottom line – across every sector. Harrison has now moved to become chairman.

Not only has Maxima’s share price – which had been heading south for more than a year as its clients continued to tighten their belts amid the slump – surged out of the doldrums since the announcement of Kingsmill’s appointment in April, there is an unmistakable buzz of new enthusiasm among the company’s staff that is almost palpable.

The Herald met Kingsmill on a blustery summer’s afternoon at the company’s headquarters in a Hillington industrial estate, 10 minutes’ drive from Glasgow city centre, to find who and what was behind this revitalisation.

Kingsmill, well over six-feet tall, shakes hands firmly, and is relaxed in his grey power-suit. He wears a big watch. He stares you in the eye when he speaks. His suntan glows. He looks considerably younger than his 53 years as he leans back in his chair.

“I believe in an honest day’s work for honest pay,” he said, harking back to his working-class roots in the English city of Bedford, home to the 17th-century writer John Bunyan. He now lives in Surrey with his wife and family and plays with power boats in his spare time. “By that, I mean that I value staff. I take nobody for granted. I’m not driven by any sense of competition. I know that may sound a little odd coming from a chief executive, but my sense of management involves being sensitive to the needs of others.”

Kingsmill’s cirriculum vitae is straight-forward. He left school at 16 and trained as a toolmaker. In the 1990s, he headed up German business software giant SAP’s UK and Ireland operations and later moved to stock market-listed Netstore as its chief executive, a company which last summer he led into a £57m private equity-backed takeover.

He said: “While I was working at SAP, I had my 50th birthday and I decided I’d just had enough. The next stop for me was European and global management, but I didn’t want that.

“I didn’t want to run my own company either. I’d never had any ambition to do that. But I realised that what I did want was to run a decent-sized UK company, preferably one that was listed. Netstore had been listed and I enjoyed the experience. When I was conducting due diligence on Maxima, trying to decide whether I wanted to come here – and I suppose they were conducting their own due diligence on me – I could see this huge, untapped potential in the company “It had been built up through multiple acquisitions and most of the integration had been done at the financial level. So there were parts of the company that were core and a lot of parts that were not. At the operational level, it all hung together very loosely.

“Yet, in spite of the downturn and the fact that the company was obviously hurting, there was so much obvious opportunity, and so much that could be grown and expanded. It was perfect for me.”

Asked about his strategy for the future of Maxima, he said: “My strategy is based around staff and what they do best.

“Another man might come in here and see all these different Maxima offices around the country and try to rationalise them into some kind of central heandquarters.

“Not only would that shed numerous jobs unnecessarily – the loss of good people is a tragedy, as far as I’m concerned – but it makes absolutely no business sense at all.

“When I began to really look into this company, it became very clear that its customers were clustered around its local offices. That told me something very important.

“Our plans here are straight forward – to focus on what makes money. The fact is that with all these acquisitions, Maxima had become a bit of a generalist. But in a recession, generalists tend to tread water.

“Our strategy is to transform the company into a specialist and we do that by focusing on what we do best – for the most part we manage IT units for medium-sized companies.

“Regardless of the economy, if you have technology that helps people, then there is a business at the end of it. Financial companies have been among the hardest hit, but they are also among our biggest customers, because our technology helps then navigate their way through all the latest regulation and it helps them do business.

He added: “What I like best is to assemble people and I get enormous satisfaction from fixing things that are broken or damaged and then building them into something special. I guess that goes back to my tool-making days. It’s the engineer in me.

“But you can be as tough and as hard as you like, but without sensitivity you will never get good people to come to work for you. That is what makes the difference between success and failure”

So how does he feel about the recent lay-off at Maxima?

“That was tough,” he said. “It was done with a heavy heart. A company’s only truly important assets are its people. But sometimes tough decisions have to be taken.

“After 14 acquisition, you are bound to get parts of companies you don’t need. So far, there have been some disposals and there will probably be a few more. But I do not enjoy taking away anyone’s job. It goes against the grain.”

Kingsmill has also put his money where his mouth is, and has bought into the company’s new momentum with a number of recent significant purchases of shares in Maxima.

From Netstore, Kingsmill also brought with him David Memory to become Maxima’s new finance director, who has also made significant share purchases in recent months.

Asked about his hobbies and he mentions his boat – which, of course, explains the suntan.

“A lot of people accuse me of using sunbeds or spending long holidays in sun,” he quipped. “The fact of the matter is that I own a 40-foot motor boat near my home in Surrey, and I like to be in it as much as possible. When you’re on the water, you get the sun. So that explains that.”

And he leans back again in his chair. In spite of the slowdown and a recent 20% tumble profits, he remains sanguine, convinced that the company remains “absolutely” on track to hit “£100m in turnover and double-digit profits” by 2012.

He added: “When I leave this company, I intend to pass on something really quite special for the next chief executive.”