Geoff Thompson, chief executive of Utilitywise, has built one of the region's fastest-growing companies. He talks to Peter Jackson.
I MEET Geoff Thompson in his South Shields office. He stands framed before a huge window, beyond which is a grey, windswept view of the Tyne and North Shields.
The first thing that strikes me with a jolt is his physical resemblance to film star Michael Douglas. He has the same impressive mane of grey hair.
But although he is in businesslike shirt sleeves and his office is distinctly chilly, I’m soon at ease. For all his resemblance to the man who played Gordon Gekko, Thompson is no ruthless egotist, but rather disarming and self-deprecating.
So much so that in describing his own career, he quotes Churchill: “Success is the ability to go from one failure to another with no loss of enthusiasm.”
In fact, while he might have had some ups and downs, his current success is pretty unambiguous.
His company Utilitywise, an energy and utilities consultancy which he set up just six years ago, successfully listed on Aim in June, being valued at about £37m, raising nearly £7m.
Since then it has reported a rise in annual revenues of a quarter to £14.6m and pre-tax profits up 23% to £4.3m. The number of contracted customers has gone up 14% to 12,000 since the initial public offering (IPO) and it is signing 70 new contracts a day. To meet demand, it has it added 110 staff during the year, bringing the current total to 314.
Thompson was born in South Shields 50 years ago. He left Jarrow Grammar School at 16, like many of his contemporaries, and did an apprenticeship with Burgess Industrial Silencers. His first year was at Hebburn Technical College on an Engineering Industry’s Training Board Course and he did a few nights a week of night classes.
In his second year he went back to Burgess to work on the shopfloor and the drawing office.
“I think at that point the penny dropped a little that perhaps I’d got out of full-time education a bit too early,” he says.
So he left his job and, although he had no A-levels, with his engineering diploma he was able to talk himself on to a combined science degree course at Sunderland Polytechnic.
“Unlike a lot of lads who were starting polytechnic or university then, I’d left a job and gone into full-time education. I spent no time in the student union bar and every waking hour in the library. I worked very hard, did a four- year sandwich degree and spent a year at the National Physical Laboratory in Teddington doing some applied research.
“I don’t think that I made a conscious decision not to go to the bar, I’d rather be in the library. I think that by that time I had left a job and I had something to prove to myself.
“I was self-motivated and, having left a job, got into university without the right qualifications. I thought, ‘I’ve really got to put my back into this’.
“I didn’t want to end up flunking this degree because having given up on my apprenticeship route I’d have been in a bit of a pickle had that gone wrong.
“Through sheer hard work and perspiration, and probably less through any academic ability, I got a first.”
Armed with that, he got a job with British Steel in Lackenby near Redcar in 1982 providing technical support to primary steel production plants. Then he was moved to a continuous casting plant in a shift management role.
The shifts, however, proved too much with two 6am-2pm, two 2-10pm and two night shifts and travelling from Tyneside.
“Shame on me for saying it but I probably didn’t think at the point about long-term career planning and I was more thinking about what hard work it was getting out of bed.”
So when an opportunity came up at Corning Glass in Sunderland he joined the technical team, doing a post-graduate diploma and MBA at Newcastle.
I ask was he ambitious?
“I suppose so. I was quite driven. I had a great childhood and a great upbringing but we weren’t a wealthy family. I remember playing golf as a young lad and if I wanted some new golf balls there was no way I’d even think of going to my mam and asking for a few quid.
“I’d get on my bike with a carrier bag and go and spend the afternoon looking for golf balls in the rough. It’s that kind of experience that maybe drove me a bit. I don’t mean that I was underprivileged, I just thought that if I was going to do well the only way was to work hard.”
After a few years at Corning he joined the Newcastle office of Price Waterhouse as a management consultant specialising in total quality management, statistical process controls and business planning.
He was seconded to Bonas Machine Company which he then joined. He spent a few years there and then joined Axiom which had operations such as call centre and fulfilment businesses in and around Sunderland.
He moved to competitor Mailcom which was acquired by South African group Primedia. He ran that part of the business for about five years until he had a disagreement with the parent company, upon which he is reluctant to elaborate, and lost his job, an experience he describes as painful.
“One thing I can say about me is that whenever I have been knocked down, I’ve always picked myself back up,” he says. “Life isn’t a bed of roses and I’ve had difficult times personally, I’ve had difficult times professionally and my career has not always been a straight line upward. I’ve had a number of knocks and a number of setbacks and I’ve always just picked myself up and continued to move on.”
Having worked in outsourcing, a number of his customers had been energy supply businesses and he had done £5m to £6m worth of telebase marketing, database marketing and fulfilment work for Powergen every year.
In 2006 he put that experience to use by setting up Utilitywise with a couple of people he had worked with and his eldest son Adam.
“At the time I had no more than an idea, I didn’t have this grand plan to create this larger business.”
He funded it, he admits with a wry smile, with nothing more substantial than his credit card.
“In our first year we turned over £100,000 and made a £5,000 pre-tax profit. That first year was a kind of proof of concept, testing the model.”
It was a process of building up relationships with electricity supply companies as an intermediary with commercial consumers and slowly winning customers and it was not without its painful moments.
“I’ve taken a lot of risks personally,” says Thompson. “There have been times when I have had my house very firmly on the line, personal guarantees on overdrafts with the bank, second charges on my home.
“I remember not that many years ago walking the dog on the beach with my wife and being very upset and worried about whether I could make the payroll payment at the end of the month.”
Now Utilitywise services everything from a single-site SME to a large multi- national. Originally it would look at a customer’s energy contracts and tariffs and secure a better deal for them. This has grown to include more sophisticated energy procurement solutions and help with consumption management.
It has developed its own Edd:e energy monitoring system which allows businesses to identify cost savings down to the individual circuit, on which it has an international patent pending. It has also built its own energy auditing software which allows the client to model impact of operational and behavioural changes on energy consumption.
“We have now evolved into a broader energy services company,” says Thompson.
When the business was beginning to be established in 2010 it was approached by private equity firms and management explored the options of selling or diluting their equity.
“We got close to a deal and had one of those deals gone ahead the way those deals were structured we would have ended up creating a business that was debt laden and while I might have walked away with a few quid there are other stakeholders to consider.
“A big consideration in the decision is what I would be leaving behind. My eldest son has a senior management role here, my younger son Callum has been with us a few years now and my stepdaughter Stephanie is also involved in the business and a whole bunch of people, some of whom worked with me when I was back in outsourcing, so psychologically and emotionally there’s a lot tied up here. So there’s a responsibility beyond pocketing a lot of money.”
In January this year it was decided that the best route to grow the business was via an IPO. This allowed the owners to sell 20% of the equity and raise £6.9m to fund growth.
In January Utilitywise bought Eco Monitoring Utility (EMU) Systems and it has recently acquired Clouds Environmental Consultancy. It plans further acquisitions as well as continuing to grow organically. Thompson points out that the company still only has 1% of the market.
It is piloting sales to French customers and has a team of French nationals which will soon number 30 in South Shields and has reached an agreement with a French supply business.
Thinking back to worrying about losing his house or not being able to pay his staff, does he feel relief now that he has made it?
He seems surprised as though the idea had never occurred to him.
He says: “It’s a good question, I think some of the pressure – that really acute cash pressure – has disappeared, but you can’t sit there and rest on your laurels because while we’ve got cash in the bank and no debt, we are a growing business and we have needs for that cash. It’s still a big responsibility but I feel we are in a good place now as a business.”