Profile: Dynshaw Italia going global with Cobra Beer

Dynshaw Italia, FD of Cobra Beer

Dynshaw Italia, FD of Cobra Beer

It’s challenging enough being a finance director of a fast-growing company in
the current business climate, but taking over from the company’s founder,
himself a fully qualified accountant, is nothing less than daunting.

Still, Dynshaw Italia, 36, rarely refuses a challenge, taking on that very
role at UK-based Cobra
several years ago and most recently overseeing the business’ successful
inroads into establishing the brand in one of the world’s fastest growing
economies, India.

Like most successful FDs he’s a risk taker in his life as well as his work –
calculated risks of course, but risks nonetheless. They’ve paid off, although he
puts a great deal of his success down to chance rather than strategy.

After qualifying with a small practitioner, Italia, backed by the sole
practitioner who trained him, went on to work at
KPMG. Then the same sole
practitioner contacted him three years on with a job offer to work as financial
controller of the then newly created ebookers, internet travel site.

‘Those are the times to take a risk,’ he says. ‘That was the best move I
made.’ Within six months the business got all the content online, raised the
money needed from Nasdaq and

the German stock market, and turned a business with a turnover of $1m and
five employees to one with a $300m turnover and 1,000 employees.

Just as ebookers moved into the second phase of its business model, which
included raising another $100m to fund expansion, the dotcom crash hit hard
resulting in the company raising only $40m due to jittery investors. It’s worth
noting the online travel business surfed the choppy waters of the crash and is
still around.

New Challenge

At that point, however, Italia was offered a role at Cobra Beer. Ready for a
new challenge and having known founder Karan Bilimoria for several years
professionally he decided to take up the job offer. In 2001 he became FD and by
2004 was chief operating officer.

All the experience he had garnered in the early years of his career served
him well for his new role at Cobra, particularly his expertise in raising money;
something he’s becoming particularly adept at given his recent record.

Last year in order to fund the company’s expansion in India, Italia set about
raising £27.5m. For a publicly listed company there is an established framework
to do so, but raising funds in a small, fast-growing company where the owner
doesn’t want to dilute his stake is a more complicated business.

‘If you look at our balance sheet there are no real assets. The only one is
our brand. The challenge was to raise the money when pure debt wasn’t possible
as there’s no debt capacity on our books. What we did is raise it through a
hedge fund with a PIK instrument.

‘Today most people know about them but when we used it not many people knew
about it in the UK. In the UK only one or two deals were done using one before
us. So that was very innovative,’ Italia says.

Indeed cash flow takes up most of his working hours, and the impact of having
huge debt on the balance sheet doesn’t escape him, but without a pile of private
cash to fall back on to continue growing as the company wants it must take on

‘There’s a risk because you are building up a considerable amount of debt on
your books but if you believe that what you’re doing with the money and the
brand is generating value over the years that far outweighs any cost of debt or
the debt itself,’ he says.

Anuj Chande, international business partner at Grant Thornton, who worked
with Italia on raising funds, says: ‘He’s pragmatic and commercially minded who
has seen the wood from the trees and is clear in his thinking on how the funding
will impact the business.’

‘He’s also a modest individual; actually too modest,’ Chande adds, pointing
out the significant role he’s played over the past five years.

At present the company is growing at a rate of 35% but the aim is to ‘start
hitting, from next year onwards, 50% growth’. It’s a tall order but if their
predictions are correct the goal of turning Cobra Beer into a global brand is
not far off. To put things in perspective three years ago there was just one
company operating from one UK location. Three years on and the company has
offices in four different countries and exports beer from around the world.

From July, Italia’s role has changed thanks to the decision to take on board
a chief executive leaving him to focus wholly on financial matters, in
particular cash flow.

Until the appointment of the new CEO however Italia was running the business
on a daily basis as well as managing finance, operations, HR and IT because Lord
Bilimoria has taken on a more public role for the company.

‘There was a gap with no one running the business on a day-to-day basis. I
was trying to do it but not successfully and wasn’t being proactive enough for a
growth company.’

Broader Role

Interestingly as an FD Italia says he’s learnt the most from his
responsibilities in HR ‘Today’s FD role is much broader. It’s a people business
today. Over the years that has been my biggest strength, my ability to deal with
all types of people. Change causes disruption so the ability to manage people is

Cobra’s ability to recruit well is reflected in its gaining a place for the
past few years in the Sunday Times’ 100 Best Small Companies to Work For. In
2007 it came 84th. According to the survey, staff have a lot of fun working with
their colleagues, with a positive score of 86%, and feel a strong sense of
family (82%).

‘What we’ve done successfully is employ very good people. I’m confident that
at any time I can delegate jobs to someone with a little bit of management.

‘You can replicate anything, even our beer, but you can’t replicate the
culture we’ve create here. People skills, leadership and management are skills
that have to be there for today’s FDs,’ Italia says.

India: Challenges and goals

While concerns abound over the impact of the crisis in the US housing market
on the global economy the International Monetary Fund has said that booms in
China, Russia and India would allow the global economy to shrug off any
detrimental impact the troubles in the US housing market could cause.

Early on, Cobra Beer saw the potential in India and made sure they were well
positioned. Despite it being one of the smallest beer markets in the world,
until recently, growing at a mere 8% or 9% in previous years, Cobra is investing
heavily for the future. Wisely, too. Last year growth in India’s beer market
leaped to 27%, and that’s just the start, predicts Italia, who has been in
charge of Cobra’s activities there for the past few years.

At Cobra’s Indian operations there was 15 staff last year churning out 1,000
cases a month. Less than a year on the number of staff has exceeded 150 people
and now produces 7,000 cases a month.

However the real challenge for Cobra in India is capacity. ‘There are few
breweries there; only about 50 or so.’ To fulfil the business growth ambitions
the board took the executive decision to take manufacturing into their own
hands. It is a shift in policy given that the majority of its activities are

‘One of the decisions we made was to set up two breweries. We have to secure
supply and quality. We’ve started building one and it’ll be ready by next year,’
Italia explains

They are again taking calculated risks on the market as specific changes on
licensing and duty laws need to change for Cobra to really grow there.

‘It’s a challenging market as it’s got 28 states, all with different laws. We
know the government regulation on licensing laws will change soon and we’ll be
right there.’

With roughly 50% of the population under 25 years of age and a fast-growing
middle class with more disposable income than ever before India will soon be
their biggest market, beating the UK in volume terms. Italia predicts that will
happen in the next two to three years.

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