By Scott Wright
A GLASGOW-based property factoring specialist is targeting further acquisitions and a senior management change amid plans to expand up to four-fold over the next decade.
Newton Property Management outlined its ambitions as the firm reported a nine per cent rise in revenue to £3.78 million in 2021, which helped net profit climb 11% to £1.15m.
The firm, founded by chairman Stephen O’Neill in 2001, now manages 28,000 properties across Scotland, with offices in Glasgow, Aberdeen and Inverness.
While growth last year came solely from new business – it recorded transactional turnover of more than £20m, up from £18m – Newton declared that it is actively looking to get back on the acquisition trail. Having taken over 12 factoring firms in the last 15 years, and concluded its latest deal – the takeover of Ayr-based Donald Ross & Co – in 2020/21, Newton hopes to conclude the acquisition of a firm in the west of Scotland by March. And it has ambitions to do a deal in Edinburgh, where it currently manages around 2,000 properties.
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Mr O’Neill said: “It’s got to be the right management business, the right stock, but we want to be in the capital.”
The company is also gearing up for future growth by changing its management structure, which will involve the appointment of a chief executive. There are also aspirations to increase the firm’s overall headcount to 50 from the current 45.
Mr O’Neill said: “Our ambition is to triple or quadruple the size of the business over the next ten years. To date, around half of our growth has been organic, with the other half by way of acquisition, so we’ve always got an eye out for opportunities to add to the portfolio.”
Asked to explain the rationale behind the search for a chief executive, which has seen the firm appoint a headhunter, Mr O’Neill told The Herald that “yes we’ve got talent, but we need a CEO with larger corporate experience, a fresh pair of eyes who can guide the firm to scale up over the next few years”.
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The firm historically operated with a joint managing director structure, with Mr O’Neill having previously held that post with Derek MacDonald. Mr MacDonald remains managing director. Mr O’Neill said: “We have demonstrated that a people-first business model underpinned by a values-driven culture can produce consistent year-on-year business growth. That’s a great proposition for an incoming CEO as we look to take the business to the next level.”
Mr O’Neill added: “For us, it’s about having transformational standards of customer service in an industry which hasn’t moved on a great deal in decades. I call it an ‘Emirates style of service’, and that is in the DNA of our people which in turn leads to high levels of customer retention.
“Our growth has been split evenly between acquiring businesses and we at Newton have acquired 12 factors businesses over the last 15 years. The other half of our business has come organically through sales. This year we have invested a six-figure sum on customer service improvements, and our focus in 2022 is to transform the Newton customer experience, with our overall aim to be the best provider in the sector bar none.”
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The company has a property management arm that advises developers and homeowners, while its Granite Tenement Management service in Aberdeen has been running since Newton’s merger with Watt & Co Property Management in 2015.
Mulling wider trends in the Scottish property market, Mr O’Neill said: “The Scottish housing market is pulling away at near boiling point and record levels.
“At the same time, standards of housing are improving in part because of new build stock coming on to the market. As an adjunct to that, our industry needs to up its game to match those rising standards; we need to be doing an even better job for customers.”
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