Any company looking to turn around its finances could do a lot worse than looking at the example of a chartered accountant who calls himself ‘Jack the Knife’, and whose reputation is such that when the Tory party needed their accounts overhauling, Sir Michael Ashcroft was straight on the phone requesting his services.
Systems Union group chief executive officer Paul Coleman, a married father of two and a tenacious and straight-talking businessman, has seen more than his fair share of ups and downs during his 28 years in accountancy.
One of his many highlights was receiving a phone call from friend and former boss at security and motor auctions company ADT, Sir Michael Ashcroft.
The call came in 1997, around the time William Hague was voted in to replace John Major as leader of the Tory party, asking him to get on top of the party’s accounts by becoming its acting finance director.
‘Sir Michael asked me to become the acting FD of Conservative Central Office to reorganise the financial reporting, cashflow management, budgetary process and accounting functions following the general election.
‘I reported to the board of the party and the treasurer, and was needed as four accountants had come and gone in quick succession, without getting on top of party’s finances.
‘When I got in there, I figured out the budgets were not balanced and that they needed a cash injection. But we managed to change the party financial systems and personnel, and turned things around,’ he says.
Coleman adds that working for Ashcroft, who bought ADT for approximately £600m in 1987, and sold it a decade later for nearer £2bn, ‘was a lesson’.
He says: ‘Every day working with him, I learned something new. He is very engaging and clever, and I am a big fan. If I wasn’t I wouldn’t have stayed with him for 12 years.’
On the flipside, last year, Coleman, at the time submerged in attempting to get Systems Union out of what he now calls ‘amazing turmoil’, was cruelly stuck down for eight months by the disease camplyobacta, following a business trip to South America where he unluckily managed to eat some chicken which had not been cooked properly.
Coleman, 50, became so ill, he was placed on the critical list at Wycombe General Hospital. At one point doctors told him he was less than 48 hours away from losing his intestines.
Thankfully however, in the nick of time he began to recover, and since then, he has returned ‘with all systems firing’, claiming his recovery was ‘all down to the good old NHS’.
The recent release of full-year Systems Union figures was also good medicine as the company had managed to move out of the red and into the black after a terrible couple of years.
A sign of the determination of the man, was the fact he ran the company from his hospital bed during his enforced eight-month absence, not even allowing for the fact that he lost two-and-a-half stones in two weeks deter him. ‘I only allowed myself to make five decisions a day,’ he says in a typically understated manner.
Aside from his illness, during his two years in charge, Coleman has had to completely break and rebuild the Systems Union business.
He has sold off the company’s dotcom activities, which bit deeply into its pockets, laid off staff and introduced a pay freeze until next January.
He has also introduced share options for a larger percentage of staff, introduced a new tier of management to replace some which he describes as ‘lacking in discipline and not earning their keep’, and rid the company of what he calls ‘antagonism within some staff members.’
‘I am married to Systems Union and I expect my staff to be too. Before I arrived, there had been some managers here who I believe had let the company down. It hurts to see people who are not demanding of themselves,’ he says.
‘The easiest thing in the world is to tear a business apart, but the trick is knowing how to rebuild it and add value to the business. That is what we are attempting here.’
This certainly appears to be the case. The full-year results ending 31 December 2001, showed EBITDA from operations was £5.1m compared to a loss of £11.4m during 2000. This profit came on the back of a turnover of £78.4m.
Earnings per share were 3.9p, an improvement on the loss of 8.4p the year before, while the Pegasus software part of the business managed to turn a £2m loss into a £1m profit. Further progress is expected during 2002.
Company doctor Coleman claims the key to becoming a successful accountant in business is getting to grips with the basics early on. ‘The key facts of any business, and which are essential to get right, are sales, margins, cash control, cash collection, profitability and productivity per head.’
His accountancy career began when he left school in 1968, aged 17. He never went to university, instead deciding to cut his teeth during five years of training with three-partner, Twickenham-based firm, Baskett, Bryant and Wallis, starting on an initial £10 a week. He started work on the firm’s smallest audits, but by the time he picked up his ACA in 1974, and FCA in 1980, he had graduated to dealing with the largest clients.
In 1974 he moved to Tansley Witt, now part of Andersen, where he managed audits, including those of Michelin and the Charles Fulton Group. He also met Sally, herself an accountant, who was later to become his wife.
Other highlights included several years with international foreign exchange brokers, Charles Fulton Group, including a stint on Wall Street. He is sorry to have missed the braces and mobile phone phenomenon. ‘The most hi-tech gadgets we enjoyed were fax machines,’ he says. He moved onto a long stint with ADT, which was acquired by Tyco in 1997.
However, for Coleman now, the only financial consideration is the Systems Union group. After calling a vote of no confidence on the company’s then management team in 2000, he has set about restoring the former glories of a highly regarded company. He says 2002 will be a year for demonstrating shareholder value, and it would take a brave man to bet against him.
Not bad for a man who, as he approached 50, decided to stick his neck out and try something new.
‘I needed a new challenge,’ he says. It is highly unlikely he knew the mammoth task he was about to embark on as he entered the doors of the Farnborough-based company for the first time.
Coleman wanted a challenge, and despite the odds, appears to have beaten the worst already.
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