Philip Reynolds, former CEO of C&D Petfoods, speaking at a recent business seminar co-hosted by Crowe, Bank of Ireland and the FD Centre.
Drawing on Crowe’s experience of helping clients build lasting value in their businesses and to mark the launch of our new Leadership Insights magazine, we are delighted to launch a special ‘Building Business Value’ series in conjunction with five of Ireland’s most successful business leaders.
Crowe partner Gerard O’Reilly comments, “Through our Business Value Builder Programme we work with clients to build long-term value in their business by identifying and leveraging the key value drivers specific to them. By critically analysing their business, we can provide practical advice to maximise opportunities and mitigate risk.”
“We believe that crucial lessons can be learned from the experience of others. For this reason, we have collaborated with business leaders to discuss key drivers they have leveraged to scale their business and building long-term value.”
In the first of the series, Philip Reynolds, former CEO of C&D Petfoods, shares his personal story about rebuilding a business and the importance of putting the business first.
Do what’s best for the business long-term
After 37 years in his family pet food business, Philip Reynolds effectively took himself out of the picture earlier this year when he sold his remaining 15% shareholding to ABP Group. His reasoning is that he may not be the best person to bring the business forward in light of the challenges Brexit brings, and he feels his decision is what was best for the business.
Many would have found it hard to be so clear-sighted about a business they had built up twice over. Reynolds joined straight from school in 1982, aged 18, eventually taking over and buying the business from his father, Albert Reynolds, in 1990. Over the years he grew turnover from €15m when he took over in 1990 to €500m when he left.
The growth figures are impressive even leaving out the fact that in 2006 a major fire at the Longford factory, where 95% of turnover was generated, effectively destroyed the business overnight, leaving just a small recently acquired business in the UK worth about €5m.
“We spent the next couple of months trying to hang on to the customer base that we had – it’s the lifeblood of any business,” he recalls. “If you don’t have customers you don’t really have a business. We spent the next couple of months trying to convince those customers to stay with us on the basis that we would return to pet food production.”
Eventually, after some difficulty getting reinstatement value from the insurance company, he was in a position to invest €35m into the plant, with new technology to cater to a market that had quickly moved on.
“I had ambitious plans as to how I might grow the business but 2007 was not exactly the year, when the business was in ashes.” In order to fulfil his plans, Reynolds decided to look for a joint venture partner who could provide access to capital.
Over the course of an hour on a Friday evening in February 2008, in Larry Goodman’s private hangar in Dublin airport, a deal was struck. “I ended up walking away with one-page agreement. My father always said if you couldn’t put it on one page it wasn’t worth talking about.” The deal saw Goodman buy 50% of the business.
“I sold it to him on the basis that I had an ambition to consolidate our industry across Europe,” Reynolds states. A number of acquisitions were made across the continent, along with further reinvestment in the Irish business. The business now employs 1,600 staff in nine countries across Europe and has sales of half a billion euro, a point to which it might never have got had Reynolds not been open to releasing his control and full ownership by entering into a joint venture.
One piece of advice: “You have two eyes, two ears, one mouth, use them in those proportions.”
As a leading accountancy and business advisory firm in Ireland, Crowe has been supporting and growing Irish businesses for over 75 years. We have an unrivalled understanding of the Irish business environment and pride ourselves on delivering hard-working, practical solutions to all our clients’ business challenges. Contact a member of our SME team to find out how we can help you.