In a silicon chip-per mood!

Mar 18 2008 by jez Davison, Evening Gazette

Hartlepool-based Stadium Group has enjoyed a stonking year. It’s bought wisely, costs are down, profits up, and brokers flagging its shares. Now, its CEO reveals, the firm’s on the look-out to buy a major power business. JEZ DAVISON meets the man behind the Tees giant

DESPITE his obvious ability to run a successful big business from the sometimes claustrophobic atmosphere of a company boardroom, Nigel Rogers confesses to having his best ideas while walking on a windy Whitburn beach with his wife.

“The family is important,” he says. “I always try to be home at the weekend and make time for extra-curricular activities. People say that the ‘work-life balance’ is a cliche, but many place more importance on that than a massive salary.”

For the chief executive of Hartlepool-based Stadium Group, belief in what you do comes before personal wealth. “If you pursue your passion, the money will follow. My main reason for going to work in the morning is the satisfaction I get when a project works well.”

Nigel is in buoyant mood. He recently announced strong annual results for the AIM-listed provider of electronic manufacturing services. So good, in fact, that it prompted a shopping spree by the board.

In the group’s sixth director shareholding since February 28, the chief executive himself purchased 13,850 shares at 67p each, describing it as a vote of confidence in the company’s future growth.

The figures do indeed make for impressive reading.

Profits before taxation and sales of property increased by 23% to £2.66m for the year to December 31 - up from £2.16m in 2006. Sales were up 6% to £40.76m, while net bank borrowing was reduced to £0.50m from £4.38m in 2006. Stockbrokers Brewin Dolphin forecast Stadium’s pre-tax profits to rise to £2.8m in 2008 - up from its original forecast of £2.7m - and to £2.9m the following year.

Figures always bring a warm glow, but they are only part of the story. Since Nigel arrived in 1993, Stadium has floated on the alternative investment market, sold its plastics division and remodelled itself as a high-tech electronics manufacturing services provider - a move which allowed it to cope better than most manufacturers with the economic downturn which hit UK industry as it entered 2000.

Increasing demand for high-tech products, such as LED lighting for hospitals, has enabled Stadium to tap into the consumer, industrial, medical, personal care and automotive sectors all over the globe.

In particular, burgeoning markets in the Far East precipitated the acquisition in 2000 of manufacturing facilities in China, where access to offshore labour and global procurement allowed the Hartlepool operation to manufacture competitively overseas and import composite parts at a reasonable cost.

That strategy might not be quite so attractive in future. Rising inflation and improving skills in the Far East and Asian markets have put an end to “lift and shift” manufacturing, says Nigel.

“In the 1990s, UK manufacturing output in Asian and Far East markets increased as more UK companies looked to take advantage of cheaper costs. However, the pendulum has started swinging the other way and companies that outsourced are now having to contend with rising wages and inflation in Asian markets. The days when everything is made overseas and shipped back to the UK are numbered.”

Stadium was cautious. It didn’t move its manufacturing facility lock, stock, and barrel to China. “That would have been a mistake,” says Nigel. “We had no market knowledge of the country and we needed our established presence in Hartlepool to remain credible.”

Although new legislation has effectively introduced a minimum wage in China, which has driven up costs, Nigel maintains that the country’s wage structures still compare favourably with other parts of the Far East and Asia.

Long-term prospects for the business are good, he says, particularly the electronics division, which employs 121 staff at the group’s headquarters in Hartlepool and a further 1,200 throughout sites in the UK and China.

He believes the power division, which provides power supply solutions for converters and battery chargers, will be a key growth area.

He credits the company’s achievements to the people around him and believes the promotion earlier in the year of Richard Reid to managing director of Stadium Electronics will help to drive further efficiencies.

“As a senior manager, you have to have confidence to draw on the talents of others. Early in my career, I learned that staff lower down the ladder have a lot to offer.”

Meanwhile, he revealed that the group is seeking to buy a large power business, “either in the UK or abroad, which has access to new technologies”.

Originally from Sunderland, Nigel started his career as a trainee accountant with Torgesons before moving to PricewaterhouseCoopers in Newcastle. A keen traveller, he spent three years in the Cayman Islands and two in London before returning to the North-east in 1991, when he took up a business development role at surface materials manufacturer Formica.

Joining Stadium two years later as group finance director, he was responsible for the group’s electronics division from 1998 until 2001, when he was appointed chief executive.

On the way up, he learned never to get too complacent or too cocky. “I have seen people fail because they think they know it all,” he says. “Perception isn’t everything. Never judge a man’s wealth by what you see him spend.”