MID-MARKET COMPANIES FINANCIAL TIMES SPECIAL REPORT | Friday March 11 2011 www.ft.com/mid­market­companies­2011 | twitter.com/ftreports Groups look overseas for growth Award winners For many, the key pany lifted its dividend by pre-tax profits fivefold in Company of the Year 20 per cent, reported the six months to Decem- (Sponsored by College Hill) to recovery has increased cash balances and ber, while Cookson, a spe- Winner Domino Printing been exposure to said it was investing more cialist in industrial ceram- Sciences. Shortlist: Croda in research and develop- ics and electronics, moved International, Shaftesbury, emerging markets, ment. from a £21m loss to a £189m Weir Group Page 3 says Oliver Ralph The company concluded: profit in the full year on a Entrepreneur of the Year “While economic concerns 30 per cent increase in (Sponsored by Evolution remain in western Europe, sales. Securities) Winner Richard ention the our strength in the fastest For many of these compa- Harpin of Homeserve. Shortlist: name Domino growing regions of the nies, rising demand from Rob Cotton of NCC Group, Charles Dunstone of TalkTalk to an investor world, China, India, South emerging markets has been Telecom Group, Matthew Ingle in small and America and eastern key to the recovery. With of Howden Joinery Group Mmid-cap companies, and Europe, gives us confidence European and US markets Page 2 they are likely to start as we enter 2011.” still looking uncertain, thinking about pizzas. These themes – rising many companies in the New Company of the Year (Sponsored by Seymour Shares in Domino’s Pizza profits, strengthened bal- manufacturing sector and Pierce) Winner SuperGroup. have become as common a ance sheets and renewed elsewhere have been mak- Shortlist: CPP Group, Flybe sight on brokers’ buy lists investment – have been ing efforts to take advan- Group, Jupiter Fund in recent years as its deliv- common among mid-market tage of growth in Asia and Management Page 2 ery scooters have become companies over the past 12 beyond. on Britain’s streets. months. “Overseas growth is Fund Manager of the Year (Sponsored by Espirito Santo But this year, it’s another Engineering and manu- something no company can Investment Bank) BlackRock Domino that is stealing the facturing companies have afford to ignore,” says Peter Smaller Companies Trust limelight. Domino Printing been at the forefront. Last Tracey, head of corporate Page 3 Sciences, which makes the year demonstrated not only broking at Espirito Santo coding and labelling that the UK still has a Investment Bank. machinery used for bar vibrant manufacturing sec- Companies appear to codes and best-before dates, agree. According to a recent has been listed on the stock survey of FTSE 250 compa- market for 25 years. The proportion of nies and their advisers by However, the printing business from the PwC, the proportion of busi- technology world has never ness coming from the UK Best Investor set the London market UK was 65 per cent has fallen from 65 per cent Communication alight, and the company five years ago to 53 per cent (Sponsored by Redleaf five years ago but Communications) Winner has attracted only a modest today. It’s expected to fall The Rank Group. Shortlist: amount of City interest. is 53 per cent now to about 47 per cent in 5 Electrocomponents, This year, though, Dom- years time. Homeserve, Telecity Group ino Printing has scooped Recent merger and acqui- Page 3 the coveted Company of the tor, but that many of the sition activity across the Turnround of the Year Year Award at the PLC companies are world lead- market supports these find- (Sponsored by Espirito Santo Awards, which seek to re- ers in their specific niches. ings, with companies Investment Bank) Winner cognise the achievements of Those that came through increasingly directing their Volex Group. Shortlist: Avon the UK’s small and mid-cap the recession in good shape firepower toward emerging Rubber, Kofax, Wolfson companies (defined as main- powered ahead in 2010. markets. Microelectronics Page 4 market companies outside Weir, the Glasgow-based Last November, Thomas Best Performing Share the FTSE 100). manufacturer of parts for Cook expanded in Russia (Sponsored by Espirito Santo The company, along with the oil and gas sector, was through the acquisition of a Investment Bank) Volex Group the other award winners, the most spectacular exam- majority stake in Intourist, Page 4 was chosen by a combina- ple. Rising demand for its once the Communist gov- tion of a panel of City fund products was reflected in a ernment’s travel agency but Best Technology (Sponsored by SJ Berwin) managers and brokers, and rising share price during now profiting from sending Winner Renishaw. Shortlist: votes from FT readers. the year – it increased by wealthy Russian tourists Oxford Instruments, Victrex, Domino’s leap into the more than 150 per cent around the world. United Wolfson Microelectronics limelight says much about between January and Business Media last month Page 4 the state of the UK mid-cap December, pushing the announced four transac- Achievement in market in 2010, and its company into the FTSE 100. tions in a day – it sold print Sustainability story is typical of those But it was not the only publications in the UK and (Sponsored by PwC) companies that did well. In example in the industrial France, and acquired two Winner DS Smith. Shortlist: the year to October, its pre- sector. Renishaw, a exhibition businesses Mothercare, Quintain Estates & tax profits rose 86 per cent Gloucestershire-based geared towards the growing Development, Telecity Group to £52.1m on sales that were maker of precision measure- Page 4 The London Stock Exchange, where Domino Printing Sciences has been stealing the limelight Reuters up 17 per cent. The com- ment systems, increased its Continued on Page 2 2 ★ FINANCIAL TIMES FRIDAY MARCH 11 2011 Mid­Market Companies Groups Leaders show look overseas how to grow for growth Continued from Page 1 a business Indian middle classes. And according to the PwC survey, 23 per cent of mid-market compa- from his first big idea, a mobile phone nies are now looking to China Entrepreneur of the Year retail chain, into the fundamentally for M&A. different business of providing tele- Expansion overseas has not Building a company from phone and broadband connections. just been through M&A, how- start­up to the top is a rare Mr Dunstone started Carphone Ware- ever. A number of companies house in 1989 with £6,000 of savings have opted for organic growth. skill, says Jonathan Moules and built it into one of Europe’s largest Mothercare is one, opening mobile phone retailers, leading it stores in both India and China. through its main market flotation in All this activity has been usinesses change as they grow, 2000. made possible by the improving so the entrepreneur who can He was also instrumental in Car- financial health of mid-market take a company from kitchen phone Warehouse’s transactions with companies. The crises – and table start-up to a multina- US-based electronics retailer Best Buy, emergency fund-raisings – that Btional company is a rare commodity. including the successful growth of Best accompanied the recession are One that can then run the company as Buy Mobile in the US. largely over. a publicly quoted business is even Not satisfied with creating a success Companies have spent the rarer still. from one idea, Mr Dunstone went into past two years rebuilding their It is a point noted by Robert Craven, the highly competitive market for balance sheets and retaining the managing director of The Directors’ mobile phone, broadband and tele- cash generated through the Centre, which advises owner-managers phone services with his business improved trading situation. on how to grow their businesses TalkTalk. “FTSE 250 companies have quickly. He developed this business into the pretty robust balance sheets,” “Very few people are cut out for that second-largest residential broadband says David Snell, partner at kind of leadership,” he says. provider in the UK, with 4.3m custom- PwC. “Don’t underestimate the The UK has been seen as a less entre- ers, through a combination of technol- amount of cash these companies preneurial nation than countries such ogy innovation, dealmaking and clever can use to fund growth.” as the US, because it has lacked the marketing. That financial health has also high-profile founders who take their The company’s sponsorship of ITV’s led to rising dividends. Accord- businesses to great heights. X Factor was a particularly successful ing to research from RBS, 47 per That is no longer so much the case, subscriber recruitment tool. It also cent of companies in the Hoare as several ambitious British entrepre- shook up the market for broadband by Govett Smaller Companies neurs have come through the ranks. marketing it as a free service, bundled Index (excluding investment One of those is Rob Cotton, chief with a telephone contract. companies) increased their divi- executive of NCC Group, a computer TalkTalk demerged from Carphone dends in 2010. Meanwhile, only 2 security business, who is shortlisted in Warehouse early last year and now has per cent of companies omitted the Entrepreneur of the Year category. a market capitalisation of more than their dividends during the year, He has described his business as one £1.4bn ($2.2bn). down from 17 per cent in 2009, of the neglected army of mid-sized However, Mr Dunstone remains while only 7 per cent cut them, operators that drive the regional econ- active in both companies. He is chair- down from 18 per cent in 2009.