SMP Group managing director Bradley Slade might not have the diverse CV of some his peers, but in his 23 years at the out-of-home and POS specialist he’s certainly learned a thing or two about the importance of never forgetting the basic business principle that cash is king.
It’s a lesson that has stood self-deprecating Slade in good stead; enabling him to grow a business with sales that had been hovering around the £18m mark for five years before he took the helm, to a £38m powerhouse. Not, of course, that you will ever hear him boast about it.
Darryl Danielli When did you get involved with the business?
Bradley Slade In 1993, but at the time we were actually four businesses.
Which one did you start at?
The original parent company was St Michael’s Press, which was purely outdoor advertising, we had a sister company Campaign Posters [established in 1990], again purely outdoor advertising. I joined a newly created business SMP Screen, a screen division, and very soon afterwards we set up SMP Digital.
I’m guessing you had a sales role at SMP Screen?
No, I originally joined as an estimator, then worked in production, then account management – so I worked my way through the business really.
Was SMP your first job then?
No, when I left school I went to the London College of Printing and then worked for Basil Diamond at a firm called Pacedene in the early 1990s.
But what led you to a career in print?
Both my parents were in print, so Sunday lunch pretty much revolved around it. So after college I worked at Pacedene for a couple of years and then joined SMP and worked my way through the business.
You make it sound easy. Stepping back a little, when you joined then presumably SMP Screen was a pretty small business?
It was complete start-up, I joined on day one and there were six of us in the early days so it was a lean operation, we had two screen presses.
Was that based in one of the other SMP factories?
No, it was completely autonomous. Really it was set up because at that time digital wasn’t really established in the market and a lot of the short-run work was still being printed screen, so we started off producing a lot of outdoor advertising and also filled the machines with point-of-sale work, because I had some contacts from my previous life.
Is that how you moved into sales?
Like any start-up, everyone has to be really hands-on in lots of different areas – so I was involved in production, estimating, sales, doing a bit of everything and then just grew up with the business.
That must have been a great opportunity?
It really was. I got an all-round grounding in running a business, including managing growth – which is one of the key challenges. It’s all well and good getting the sales in, but if you don’t manage the growth in the right way then it can be a car crash.
Who was running it at the time you joined?
The two people that were running it were Jonathan Oppenheimer, who is still one of our shareholders, he moved from St Michael’s Press to SMP Screen, and the other was Michael Bowden as works director, who also came from Pacedene.
Was SMP Screen Oppenheimer’s baby then?
Well, either his baby or he had done something really bad at St Michael’s Press [in West Norwood at the time] and was sent to Woolwich as punishment [laughs]. Jonathan was charged with heading up the Screen division and recruited me and Michael and we set up 100 yards from where we sit now.
Is Jonathan still involved with the business?
He still has shares, but he’s semi-retired now and doesn’t have an operational role.
And you ended up running SMP Screen?
Exactly. Around 2005 I became managing director of Screen, but at the time we still had the four businesses in the group. I was 21 when I joined the business, so I would have been in my early 30s.
Pretty young then to be running what was presumably a sizeable business by then?
We were probably turning over £8m-£10m, so it was a sizeable business, and by that point we had moved to the site we’re in now and we had made some significant investments. But we were still a screen business primarily, although we invested in digital – we had some wide-format digital some Vuteks.
Was that part of SMP Digital though?
It was originally in SMP Digital but at around the same time  we merged the four businesses into one because we had got to the point where the outdoor market wasn’t really growing. We had a very large market share, and still do today, but outdoor is a finite market and it’s very hard to grow your share much.
Before your time I know, but that seems an interesting strategy to create four completely separate companies serving the same market, albeit different segments of it?
Back in the day it very much worked – having two outdoor businesses, a digital business, with its separate disciplines, and a screen business. It suited our needs at the time. But it got to the point where there was too much inter-company trading, too much duplication and just too much going backwards and forwards. In the end it didn’t give us a competitive advantage to run them separately. So around the same time I became MD we decided to start consolidating and became SMP Group. And over a period of time we moved all the factories into here.
Was that when you became a PLC?
That happened earlier, but we’re not publicly quoted. It was something that went back to before my time and our then accountants thought that if there ever was going to be a flotation it would be advisable to change the way the company was structured. That was back in the heady days when print companies used to float.
And I guess it’s going the opposite way nowadays?
But isn’t there’s still a benefit to being a PLC?
There’s no benefit at all, to be honest. It doesn’t make any difference either way – it is what it is. I’m sure at some point we’ll be advised to change back to a limited company.
When the accountants have a quiet few months and could do with the fees presumably?
That’s generally the way it works I guess [laughs].
Was consolidating the businesses relatively straightforward?
It all happened over a couple of years. The kit that was easy to move we moved here fairly quickly; the heavier litho machinery and the kit that was expensive to move we ran from West Norwood for a while, and as we made investments in new kit we put that in here and just decommissioned the kit at the old factories – we had that flexibility because we owned the other sites – so we could do everything at our own pace.
It must have been a challenge culturally though, bringing together four different management teams?
Well, like I said, we had an awful lot of duplication. We had pretty much four of everything. But I think we did a very good job of bringing it all together, we didn’t have to lose anybody, we managed to do it in such a way that we could accommodate all of the people in the business. People didn’t necessarily end up doing exactly what they were doing before; for example, one of our works directors, who was running a litho division, became fulfilment/distribution director – so he had to learn a completely new set of skills. One of the other works directors now runs all our health & safety, works and building maintenance, which is a big job in a building like this. And the other two share the works production.
I guess that gives you a great strength in depth in terms of the management experience.
It does and we’re incredibly lucky. It wasn’t something we did to get rid of bodies, it was done for the right reasons and the result is that we’re a better business for it.
There must have been challenges, though. I mean SMP Screen was a new business that had grown rapidly, whereas St Michael’s Press had been around since the 1920s – so they must have had very different cultures?
Massively different. We had people that had been working at St Michael’s for 30 or even 40 years and all they had known was outdoor advertising and we brought them over here, with new ways of working to deal with POS, and all its idiosyncrasies – so it was a massive change for a lot of people and they had to get their heads around that and how the new business was structured. We turned the whole business on its head really. But I think we did a good job and, probably even more importantly, everyone bought into it – at the end of the day a business lives and dies by its people. Our people represent our single biggest investment and we have some very good people here – so we had to make sure we did the right thing by them, placing them in the right roles, doing the right jobs.
And did you get that right?
I think so, but you would need to ask the team. I know that there was a little bit of fear for some, because they ended up doing jobs they had never done before, but everyone adapted. I’m not pretending it was easy for everyone, we had printers moving into finishing, or poster finishers, whose job largely involved just trimming the sheets and putting them on a pallet, who had to learn about POS finishing, gluing, assembling, collating and packing – which was completely new for them. But it was a change for the better and, as you say, it gave us a great strength in depth.
It must have been a tough period though, because that would have coincided with the financial crisis?
It was around 2007-2010, so yes.
So while it might have made perfect business sense you were creating internal challenges and at the same time being squeezed by massive external challenges.
We were actually growing as a business at the time, largely in the POS market, so that was good. But yes, it was challenging time. That said, I can’t remember when it hasn’t been a challenging time.
I suppose you missed the glory days of the 1980s when I’m told people were making obscene amounts of money for doing very little?
Hmm, yes I didn’t see any of that [laughs].
You mentioned that POS had been a key growth area for you, what’s the split between POS and outdoor now?
About 20% sales is outdoor and 80% is POS.
And what was it before you bought the businesses together?
That’s a big shift then in a relatively short space of time.
It is, but what we’ve seen in outdoor – well everything really, but outdoor especially – is significant price erosion over that time. So even though it only represents 20% of sales, we have actually grown our market share in outdoor even compared with when it used to represent 50% of sales.
I can’t imagine many businesses have been immune from falling prices?
Part of the price erosion was of our [the industry’s] own making really: digital has played a large part of that in terms of bringing prices down [for shorter runs], so has our collective investment in the latest litho technology and CTP – which sped up makereadies and reduced waste, which all generated savings that we passed onto customers.
Couldn’t you have kept that for yourselves, though?
Not really; it wasn’t just us being able to reduce costs that drove down prices, it was being driven by the clients’ budgets too. To be fair there wasn’t really a single cause, but regardless, you have to remain competitive, and investing in technology just enabled us to keep up with the changes that were happening.
Has the digital technology also created challenges? I mean it has significantly reduced the entry level for new competitors; yes, there are £500,000-plus high-volume beasts, but in theory you could be competing against companies that have a £20,000 machine?
You’re right, you could set up in your garage with a £20,000 investment and produce outdoor advertising on a small digital printer and an X-Y cutter. Prior to that the entry level was litho, which was and is expensive, so digital has levelled the playing field in outdoor and POS. But to produce it on the kind of scale we do, you need all of the ancillary kit, the production firepower and the infrastructure to actually deliver the job often to multiple locations – you also need to have earned the trust of your clients.
What about commercial printers getting into POS, is that a threat?
I don’t think they represent a major threat to our core business, they might chip away at the edges – but I don’t really see them as a threat to the main contracts we deal with. With the greatest of respect to those companies, becoming a major player in POS takes a little bit more than buying a hybrid wide-format printer.
Fair point. What have been your key challenges in your time in charge then, aside from the integration?
Business has been tough for the past 10 years or more, but we thrive on challenges. I speak to people who work in the City and they’re up here one day and then down there the next and vice-versa, but as an industry I don’t think we’ve had those ridiculous highs, certainly not since I’ve been involved anyway, it’s just always been tough – it’s what we know. I’ve never suffered, if that’s the right word, from peaks when we had so much money we didn’t know what to do with it – and I think that’s given me good business disciplines.
How do you mean?
We’re very careful in terms of the financials: how we invest money, what our key priorities are – we run a very lean operation, so we’re not recruiting dozens of people one minute and then laying them off the next. I don’t like big swings, I like consistency. We’re very careful about growth plans too. Yes, we are growing as a business, and yes, we want to continue to grow, but it’s about controlled and measured growth and about making sure that what we do is sustainable. We’re not aiming for the £100m that everyone dreams of – it’s just not sustainable in our market. We have the size and scope to compete with peers that might be slightly larger than us, so it’s not a capability issue. It’s about hitting all of the key metrics and, just as importantly, those of our clients, but always being careful not to over-stretch ourselves.
Is that the key then: having a plan and sticking to it?
We’ve all seen businesses that have had a significant sales spike off the back of one client win and we all know what happens when that client goes. It can be like watching a car crash in slow motion. We have a plan and it’s a plan that we can stick to, but that’s not to say that it never changes – it has to evolve. There are too many internal and external factors in any business to rigidly stick to a plan regardless of the world around you. But we’re quite clear on what we want to achieve and being sustainable will always be central to that.
So you might walk away from deals that are too big?
Don’t get me wrong, I’m not in a position to turn away a client because the deal might make them responsible for too higher a percentage of our sales. I just mean that if we do end up in that position, from a risk management point of view, we will focus on growing the business in other areas to reduce our exposure to that one client.
What is comfortable for you then, in terms of one client?
In an ideal world we wouldn’t want any one client to represent more than 20% of sales. That’s manageable, we have enough flex in the business to manage 20% either way. We probably have a little bit more flex than that to be honest, but that’s what I’m comfortable with and what we’ve designed the business and our production capabilities to cope with.
So what does your biggest client represent now then?
[Laughs] Just shy of 20%.
Funny that. I’ve just realised that I never asked you when you actually became managing director of the merged SMP Group?
Not long after being made MD of SMP Screen really, around 2008.
Was that because the other managing directors were the shareholders of the business that wanted to step back?
The MDs of the other businesses were Peter Mitchell, who is our chairman now, Jonathan Oppenheimer, who was getting to retirement age, and John Purser, the MD of Campaign, who sadly died around the time we started to merge the businesses. As part of the merger, their plan was to create a succession so that the older shareholders could start to step away from the day-to-day business.
And was that when you bought into the business, because you’re a shareholder right?
Yes, in around 2010. There are four shareholders myself Peter Mitchell, Jonathan Oppenheimer and our new business director Darren Jarvis. It’s a good fit and we have common goals.
And that’s not to be a £100m business?
The ambition is not to be £100m or £150m or whatever number someone wants to make up, there’s no great ambition to exit the business either. The two older shareholders are quite happy with the status quo and I’m in the business for the long term – I enjoy what I do too much.
Do you ever wish that you had spent more time in another business?
People always ask that – I don’t think I do. I know that you can become very insular in your business, but I’m very fortunate in that pretty much from day one I was afforded the luxury of being my own boss and was allowed to just get on with it. I learned so much from the people around me that I’m not sure what I else I could have learned elsewhere.
Was anyone mentoring you?
Peter [Mitchell] gave me the opportunity; he mentored me over all those years. And even though there’s probably 25 years between us, we share very similar values.
What about sounding boards outside of the business?
Not one individual really, but I always talk to people in other businesses to see what I can learn from their experiences. It’s funny, sometimes in print we think our challenges are unique, but you speak to other business leaders and you quickly realise that whatever they do our business challenges are fundamentally the same.
Very true. But without wanting to make this sound like a job interview, what are your key strengths as a business leader?
Just as well, because I haven’t had many job interviews [laughs]. I think I’ve always led by example, without being smug I’ve been there and done it at some point. I’m not afraid of hard work and everyone knows that and I like to think I’m very fair to people, I’m in a 50-50 partnership with everyone I employ and I have to deliver on my share of the bargain. It’s like a relationship.
So you have a low staff turnover presumably?
Very low, people come here and they see our values and how we treat people and they don’t leave. We also strongly believe in developing your people and promoting from within when ever you can. That’s why I’m sitting here today, because I wasn’t over looked and was allowed to develop and grow with the business, and I want to give others the same opportunity.
Does that mean that you think the next SMP Group managing director could already be working in the business?
I think in terms of the current management team, we’re as strong now as we’ve ever been. But even now we are looking at succession planning and have made some moves towards that in terms of identifying some potential future leaders and starting to progress them through the business through mentoring – we’re constantly on the lookout for that next tier of people to take the business forward. I think it’s important, it’s never too early to think about that. So over the coming years, hopefully, those people will drop into opportunities and embrace them and prove themselves.
And what advice would you give to the person that wants to take over from you in 10 years or so?
Don’t do it [laughs]. It would have to be: get a good understanding of the business in all areas, always keep control of costs, know your clients and understand what they really want and know your staff and listen to their ideas – the best ideas often come from them.
What has been your toughest time?
Probably managing our growth and rapid expansion.
At a specific period?
The first spurt around 2009/2010, when we grew almost 40% in one year. It wasn’t the challenge of getting the work, it was the challenge of managing the costs that sit behind that – and the cashflow pressures it creates. Managing the jobs through the factory is relatively easy; I’ve got lots of skilled people that are more than capable of managing that. It’s managing the money in the bank, the cashflow and all the financials that can create the real challenges. That period was my real baptism of running a business properly. I see lots of businesses chasing a top-line number, because it makes the P&L look wonderful, but the biggest lesson I have learned is that the most important thing in any business is cash in the bank, that’s even more important than the bottom-line profit in many respects. With money in the bank we’re afforded the opportunity to make decisions, make investments, do things strategically not just reactively – that’s probably my biggest driver.
Is that because you had a scary period in terms of cash?
Not in my time in the business, it was more what I’ve learned over the years from what I’ve seen happen to other businesses – where people have focused on turnover and profit and forgotten about cash.
That makes sense. Glancing at your accounts, your margins have been pretty consistent.
They have, and that’s not by accident. Yes, we have to make sure that we’re lean and productive, but we also have to make sure that Darren’s team has the tools and information to win the right work at the right price. We’re not in the luxurious position of being able to simply charge 20% more than our competitors.
Or produce it 20% cheaper?
Exactly. The market dictates the price, so what we have to do is be smart in terms of what work we take on and how we produce it.
Do you instil the importance of the bottom line and the real cost of sales to the sales team then?
Absolutely. We’re a very open and transparent business and try to involve everybody in the numbers, so everyone can understand what they’re doing and the implications of the decisions they make. Everyone has an impact on the numbers and 1% either way on a business our size makes a big difference.
You’ve spoken a lot about the challenges, but what have been the highlights?
I don’t tend to focus on the high-lights – they do call me Mr Doom & Gloom half the time [laughs]. My biggest highlight has been the success of the business, really. Being in business is about creating success – for the business, of course, but also for our people. It’s not about getting rich – the money is a by product – it’s about creating success, creating a sustainable business that will be around for another 90 years [St Michael’s Press was founded in 1928]. It’s also about providing secure employment for our people, we employ around 200 staff and they all have families.
And your proudest achievement?
I’m quite proud that we as a business haven’t made any redundancies in all that time. There have always been challenges, and things always go up and down in any business to move forward. But where others might have had to make redundancies, we haven’t – we might have retrained or redeployed people, but making sure we maintain that secure environment for staff is very important.
And the low points?
Honestly? Nothing specific. I always think we can do better though. I’m probably hard on myself and others in that respect; I never pat myself on the back, I always think we can do a little bit better and need to constantly push ourselves to improve, because if we don’t we’re in danger of becoming complacent. We’re always looking to the future, and that can be a very uncertain place – we can control things within these four walls, but there are things outside that we can’t control and we have to be mindful of that. That’s why we can be quite cautious about making sure we have money in the bank and that our borrowings aren’t too high. At the moment we’re very fortunate that we’re in a position that we don’t have to look externally for funding.
Do you think that sometimes might make you a frustrating business leader in the eyes of your management team?
As I say they sometimes think I’m Mr Doom & Gloom whatever the weather. That’s not the case, I’m just cautious I suppose.
So could you sum your strategy up as hope for the best, but plan for the worst?
Exactly. And it’s worked so far.