Five years ago, John Kennerley was brought on board as finance director of
business travel agency Hogg Robinson just as the company ended its 37-year stint
on the London Stock Exchange.
Having seen its share price suffer from a lack of investor appetite for
mid-sized companies, as interest concentrated instead around the technology
bubble, a decision was made that continuing as a publicly listed company was
making it increasingly difficult to deliver the company’s desired strategy. It
went private through a venture capital-backed management buy out.
Since then, Kennerley has been tasked with transforming the financial culture
of the company, acquiring new ventures, undertaking a recapitalisation exercise
and will soon be looking to top this off by providing an exit for its backers.
Prior to his appointment in April 2000, the 55-year old had gathered a wealth
of experience behind him in a range of industries. His career spans positions at
defence company Vickers, Andrex maker Bowater Scott, pharmaceutical giant Merck,
Grand Metropolitan – now known as Diageo – engineering groups Tomkins and APV,
as well as mobile screen maker Powerscreen, among others.
Having gained a good deal of knowledge on preparing companies for sale and
trouble shooting, he was well positioned to take on the turnaround of a business
that may not have been drowning, but was certainly treading water.
The CIMA-qualified accountant believes his extensive background has meant
that the role he performs has become much more than just ensuring the numbers
‘I’m not a pure finance man in that sense,’ says Kennerley. ‘My skills are
much more about understanding the business, developing strategies, sorting it
out and driving the businesses.’
Kennerley even goes as far as to call himself a cost and management
accountant, ‘not a chartered accountant’. He explains: ‘You have to have an eye
not just to the financial disciplines, but also to the business disciplines, and
also have empathy with what the front line and your colleagues are facing.’
But he certainly knows that managing the finances is crucial to the
successful operation of any business, and the better you can get your money to
work for you, the greater chance the company has of becoming a success.
‘My mantra is cash, cash, cash,’ he says. ‘If you can get cash out of the
business to reinvest at the sharp end, improve products, improve people and pay
down debt, do it.’
Kennerley also describes himself as a sceptic. ‘I never believe the things
I’m told. I always check and, fortunately, the results have spoken for
Those results include taking a company making a £15m profit at the turn of
the millennium to around £50m. This may still not sound like a huge amount, as
the gross turnover on which that profit was made was £2.8bn, but given the
nature of the travel industry, Kennerley is proud of this achievement.
‘We are known as the most profitable of the large corporate travel management
The company also purchased the business travel interests of Kuoni, turning a
break-even company into one producing £16m profit, and recently undertook
another recapitalisation project, for which it was oversubscribed by interested
Perhaps the biggest achievement is that profit has grown during a period when
the travel industry has suffered heavily following 9/11, the SARS outbreak and
the war on Iraq.
‘It didn’t affect us that much because we have a certain structure of
relationships with our partners and because business travel, while it slowed,
didn’t stop completely.’
However, Kennerley described the management around such events as
‘horrendous’ – especially fast moving events, such as 9/11 and the SARS
‘We have tools like PeopleTracker, so we knew where anybody was in the
world,’ says Kennerley. ‘So if someone was in that zone, we actually knew.
Because of the relationships we had with airlines, we were able to get people
out before other companies could even try. Through our relationship with BA we
arranged for planes to fly in and pick up certain people.’
The company also faced the threat of upcoming technological alternatives to
travel, such as web conferencing and online communications, head on.
‘We do all that now. We do that for our own clients, we have suites of rooms
This approach reflects strongly on Kennerley’s philosophy when it comes to
business – accept change quickly or fall behind. ‘Don’t be frightened of change,
embrace it, investigate it and if there is something there, go and do it,’ he
Another aid in improving the performance of the business, Kennerley admits,
is the decision to take the company off the stock exchange and back into private
hands. These advantages are not hard to understand when you consider the new
requirements and regulations that have come in recently for listed companies,
such as international financial reporting standards and the combined code on
‘Coming out of the public market has given us enormous scope to do things, to
change without being in the public glare,’ Kennerley argues. ‘We’re able to do
things easily. For instance we have restructured the business a few times to
increase efficiency and take out heads.’
He says his year-on-year growth figures would have kept the market happy, but
concedes that Hogg Robinson would have suffered from the market downturn caused
by 9/11 and SARS.
‘There are significant benefits to being private, and that’s why you are
seeing executives moving to the private capital world, because you can do things
much more effectively at times, especially if you are with a good company.’
Despite having been with Hogg Robinson for more than five years, Kennerley
still describes himself as ‘an outsider’, largely due to the fact that the team
he joined has been together for around 25 years. His admiration for chief
executive David Radcliffe is obvious, but it seems Kennerley and his team are
largely left to their own devices, while Radcliffe goes out to press the flesh.
‘David is very much a front-end sales and marketing man, he’s brilliant at
relationships and therefore he lets us get on with it,’ says Radcliffe. ‘I’ll
only bring the things of importance to him. The rest of the time we actually get
on with it and talk among ourselves, and just get it done’
‘Don’t get me wrong, we have our disagreements, as everybody does, it goes
with the finance director’s territory. But normally we get things done in the
Working with Radcliffe has made Kennerley realise, however, that stepping up
to the chief executive role in a large company is not for him.
‘Having watched David in action as a front man, I could never do what he
does. If I could be that good at it, then yes. But I’m comfortable doing what I
do. I much prefer to influence and drive change working with a team.’
Kennerley will spend the next 18 months, alongside his other duties, looking
at the options available to provide an exit for the backers of the MBO. Nothing
is being ruled out, he says, although there is a preferred option that will
remain undisclosed for the time being. It could even be possible, he says, that
‘our cash performance is such that we have paid out all of the debt and
everybody wants to recapitalise us again’.
But his main intentions probably remain elsewhere. When asked whether he
would like to be the financial director of a listed company once again,
Kennerley responds in the affirmative. Whether this will be with Hogg Robinson,
or whether he is to add another company to an already long CV, remains to be
Business turns to cattle class
Not so long ago, to travel on business often meant travelling first class and
staying in a luxurious hotel in the centre of whichever city it was you were
visiting that week. But times have changed somewhat.
While airlines still offer premium and first class services, continuing
pressures on companies to drive down costs has meant that executives are now
having to forgo the little luxuries afforded them when they travel.
But this doesn’t just mean having to sit in economy class, while the more
privileged have the blue curtain of opulence drawn against the rest of the
world. Quite often, execs are now being slung on one of the increasing number of
low-cost, no-frills airlines that have cropped up.
Hogg Robinson, to demonstrate the point, now believes that it is one of the
biggest bookers of low-cost flights in the UK.
But the drive to cut costs doesn’t stop there. With the emergence of internet
travel agents and portals, many are now taking it on themselves to find and book
the cheapest flights and accommodation available. But Kennerley, defending the
necessity of the company’s role, dismisses this as a false economy.
‘We have clients where they have some problems with mavericks in the company
who always think they can get a cheaper ticket, and you can if you go on the
internet. But if you add your time, your travel and all the other bits and
pieces, 99% of the time it is more expensive.’
How much further the drive to cut travel costs can go is questionable.
Executives turning up tired and aching and staying in a cheap hotel miles from
the city centre might just feel that face-to-face meetings aren’t that necessary
after all and web conferencing could be the way forward.