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The Concerto Group has matured from a business partnership into a fully fledged integrated offering. Chairman Mike Kershaw tells Square Meal how big ideas became an even bigger reality
Looking at it now, it’s hard to believe that the idea for The Concerto Group – now nine divisions and 108 employees strong, with an annual turnover in excess of £25m – was conceived around a hotel swimming pool in Cyprus. That was back in 1999, when Sam Gill and Mike Kershaw met for the first time at an industry forum.
Gill, then co-director of teambuilding company Business Pursuits alongside ex-City executive Mark Greaves, and Kershaw, who ran party planner The Ultimate Experience (UE) with Guy Rodger, discovered they shared similar ambitions. They also realised that if they joined forces, together with UE production wing Core, Business Pursuits marquee company Witney and Create catering – with whom talks were already under way – they could bring an attractive integrated package to the market.
Kershaw explains that he and Gill – both at the forefront of a relatively young industry – were at a similar stage with their respective operations. ‘When you’ve got an OK business with a £4m turnover and lots of nice clients, you have a decision to make. You can stick with the lifestyle or you can have a go at creating something meaningful in the industry. We wanted to have a go.’
This have-a-go attitude has always characterised Kershaw’s approach. He chuckles as he remembers the ‘thousands of money-making schemes’ dreamed up with Rodger over the years. ‘In those early days, we had a great laugh and great ideas, but no core discipline or financial planning. We weren’t always good at the nitty-gritty. The Ultimate Experience was very seat-of-your-pants. Business Pursuits was a solid operation, very mechanistic. I said to Guy: “They will give us discipline, we will give them flair”.’ And so it was that the seeds of The Concerto Group were sown.
Fast-forward eight years, and Kershaw is sitting in the UE offices near London Bridge. Ironically, given the protectiveness he felt towards his company around the time of the merger, directorship of the ‘more product-focused, process-driven’ Christmas and summer party specialist is now in the hands of the group’s initial chairman, Sam Gill. The two swapped roles 15 months ago in a move suggested, perhaps surprisingly, by Gill.
The key to the group’s ongoing success has been the recognition of each board member’s strengths and weaknesses. So the switch played to Gill’s talents as a financial planner and process manager – he admits preferring ‘to drive from behind than lead from the front’. It also gave Kershaw the scope for his ‘blue-sky’ thinking and flair for industry networking.
Since the Cyprus conversation, four divisions have been added and several venue contracts (see panel, overleaf). Now 12 managing directors and senior executives oversee about 1,000 events a year.
Some 25 per cent of the group’s turnover is generated by inter-company trading, a testament to the wisdom of the Concerto growth creed, while an already sound profit figure is projected to treble in 2008. ‘As you’d expect, it’s a much more grown-up operation these days,’ says Kershaw.
Certainly, the have-a-go attitude of yore is still in evidence – though the size of the company now means it is couched in terms such as ‘bold’ and ‘ambitious’ rather than ‘maverick’ – but it is firmly supported by commercial nous.
Chief executive officer Greaves, who structured the original merger, has provided the financial backbone of the group throughout its development. A qualified accountant, he spent a decade working in the corporate finance department at Warburgs before investing in Business Pursuits in the late 1990s. His first event industry deal was to buy Witney UK marquees, while more recently his knowhow enabled him to facilitate the disposal of Core Creative to the group’s new production partner, Hawthorns, without using external consultants.
‘We’re continually prepared to take risks, but now they’re much more measured,’ explains Kershaw. ‘Now we can bring on ideas and know each will be scrutinised by people who understand the maths. We go through a rigorous process before all seven board directors tick a box. A full business plan is submitted to the board.’ This process has underpinned a raft of recent signings.
In five major deals last year, the group bought Oxford-based caterer Touch Of Taste and the Delfina restaurant venue near London Bridge, which has 650sq m of event space. Create took on Plaisterers’ Hall as a sole catering contract, while a 50 per cent stake was acquired in entertainment agency Full Circle (‘We were spending £400,000 a year on entertainment and thought, “why are we giving it away?”,’ says Kershaw).
Another carefully choreographed move was the purchase of UE competitor EventWise. ‘If you’re going to have more venues to market, more products, more marquees and more Christmas venues to market, then you’ve got to sell them,’ says Kershaw.
‘You’ve got to keep your foot on the pedal. You can either increase your sales force [through recruitment] or look to a business in that market that is doing well, with a nice reputation, and bring in additional sales experience, an MD role and do it in one chunk, delivering £2.5m to £3m of business. It’s a logical way of growing.’
Following this series of acquisitions, The Concerto Group is in pretty good shape, but Kershaw is still hungry for the next big project. He is particularly excited by the development of the bespoke events division, concerto:live, as direct experience of brands through events becomes increasingly central to corporate marketing strategy.
‘The nature of marketing is changing. There’s less mailing, and even digital is spread too thin,’ he says. ‘Brands need to engage customers, so that they can touch and experience the brand. That has to be through an event. The events business is going to grow as it helps brands touch their audience.’
Recently, concerto:live co-ordinated the conferencing and exhibitions at C Squared Communication’s 2007 Venice Festival of Media for 500 delegates. There will be 800 at next year’s event, which is already under discussion.
Kershaw also sees Concerto’s model for London events business spreading to other UK cities as a logical progression. ‘People are holding events for specific commercial reasons: teambuilding, employee engagement,’ he explains. ‘Unemployment is not an issue any more, so companies are now competing for staff – they have to look after them. This is just as relevant in, say, Cardiff as it is in London.’
This plan would involve further acquisitions, of successful young businesses operating in major cities.
A move into the fertile Scottish market is first on the agenda, and a team visited Edinburgh recently to look at opportunities. Kershaw insists that this is not a ‘predatory’ expansion plan. ‘We’re set up to help smaller businesses achieve their goals. I like the idea of helping younger businesses grow in the only industry I know,’ he says, casting his mind back to the early days. ‘We’ve been there – setting up in our front rooms in the early 1990s – so I can empathise completely with people building their own businesses.’
Developing corporate social responsibility in the form of carbon offsetting and more charity work, as well as internal communications through annual conferences and social events, are all part of the future for The Concerto Group.
Kershaw is keen to dispel any dreamy notions that this is just ‘one big happy family’. Growing up from a 15-strong business to a group operation with 108 employees has not been easy, he admits, and maintaining the ‘collective spirit’ needed to draw together all the components from eight different locations is still a challenge. But, for Kershaw, cultivating the softer side of the operation is a key part of growing up as a business. ‘I don’t just want us to be profitable. I want us to be a good business. We’re aiming for genuine sustainable value, not just profits. If someone wanted to buy The Concerto Group, they’d be buying a business that’s more than the bottom line.’
Which brings us neatly to the question on the lips of Concerto’s competitors: is the company looking to float? Kershaw remains non-committal, confirming only that if and when Concerto does go public, it will be on the company’s own terms. ‘There’s no time limit, like “We’re going to float in five years”, but we may. We have no debt, so we’re in good shape,’ he adds.
As The Concerto Group continues to expand, larger and more wide-ranging opportunities present themselves. ‘We can do anything now,’ Kershaw insists. ‘Why not look to license Create [as a catering brand] in California or New York City? There’s no reason why not – we just need the will to do it.’
And will is something Mike Kershaw has never lacked. As he reels off ‘money-making scheme 433B’ – not sounding quite so harebrained with Concerto’s weight behind him – there’s a twinkle in his eye that says the ambition of that chance encounter around the hotel pool is still very much alive.
This article first appeared in Square Meal Venues & Events magazine, Summer 2007.