Giles boss McManus: "Money's not cheap for acquisitions"

Giles chief executive Brendan McManus says the days of easy credit are over and the consolidator will only make acquisitions at the right price and the right fit.

McManus, speaking after the company’s 2011 results, said there is plenty of more scope for acquisitions, working with the banks and private equity backers Charterhouse to source more deals.

However, he said: “We have to make sure we pay the right price, and make sure we get the right acquisitions. Money is not cheap.

“We have to make sure we are confident that the acquisitions will deliver. That’s what is really important. We have to be selective about the acquisitions we do.”

Tough environment

McManus says it is a challenging environment with soft rates, corporate business failures continuing and corporates reducing spending. Against all this, there is intense broker competition to replace lost income.

McManus said: “Traditional market cycles have finished now and we are looking at a time when insurance companies will manage capital acutely well. We have to manage our business in an environment which will remain tough.”

Working with Chris Giles

McManus departed from his role as Willis UK chief executive in October last year and joined Giles in April.

He is in charge of the day-to-day running of the business, while executive chairman Chris Giles heads up acquisitions.

McManus said he was “really enjoying working” with Giles. They have separate roles but there are conversations when a deal is on the horizon, he said.

Outlook for 2012

Giles’s strategy for 2012 is concentrates on acquisitions to help growth aligned to strong organic growth. There is no exit plan such as a flotation in the pipeline.

To drive organic growth, there will be a focus on consolidation and integration; a stronger sales focus in retail; building sales pipelines; review of the operating model; continuing development of sector specialisms.

On organic growth, McManus said: “Realistically, single digit growth is going to be the maximum achievable.”