'A natural first step': chief executive Barton outlines Jelf's ambitious restructuring plans

IT: Explain the timing behind the restructure?

PB: Since I was appointed insurance chief executive, we’ve been trying to work out how to take the insurance business forward. Part of the plan is to bring all of our insurance businesses together under one management team, one board, one regulated entity, one limited company. It will give it much more coherence in the way we manage the insurance business.

We’ve been very aware of the acquisitions we made in 2007 and 2008 (Manson, Argyll, Clarke Roxburgh and Lampier) and they have run as separate entities. We believe now is the time to bring those together to build what I believe can be the best national, but community broking, business in the UK.

We have got a very ambitious plan to really energise our insurance broking businesses.

We’ve got a very clear plan for the next three years, we know exactly what we are doing. We’re on track to execute a huge amount of change in a fairly short period of time.

IT: How will the insurance business be structured?

PB: The insurance business is bringing back into its business core operating functions. Previously, they were effectively outsourced to group; our belief is that there is value, given that the insurance business is two-thirds the turnover of the group, in having those capabilities within the insurance business. So what we wanted to do is create a powerful management board for what is the largest trading entity in the group.

Historically, our trading businesses have run light of that sort of support resource and group costs appear heavy, and that’s a misrepresentation really. So we want to bring those relevant group costs into helping me run the insurance business with a commencer of change in the group central function.

It will have its own capability. One of the benefits of creating one business is we can create a powerful board with financial controllers reporting into the finance director at group insurance level, and likewise the regional operations directors or managers reporting into a chief operating officer at group insurance level. This is a restructure to create greater clarity, coherence and purpose in the insurance business. It’s about preparing us for the next stage of growth and development in the business.

IT: Isn’t the competition already one step ahead?

PB: Some might say we’ve been a bit slow in doing this, but I would say we’ve just done it in the right order - get the people's hearts and minds right first and then affect the chance. Some others in our marketplace have tried to do it the other way round and have become a bit unstuck, I think.

We’ve spent last two years working with these businesses to understand them and get them to understand us, and to build relationships. We’re not doing something to these businesses, we’re working with them in this change.

IT: What will happen to the individual brands?

PB: The limited company will be Jelf Insurance Broker Ltd. We will then operate under some trading styles. Those trading styles won’t quite be the same as they are today.

What we want to do with branding is capture the best of both worlds.

We want to more formally reflect the fact that these businesses are part of the Jelf Group and have the strength of a listed company behind them. But we also want to recognise that some of those regional brands have significant power whether because of their longevity in their region or their closeness in their community, or whether because they have a particular focus on a niche or a specialism.

You wouldn’t throw away those brands because it’s likely they have a huge amount of value invested in them. It will be a combination of the existing brand and Jelf in a much more balanced way. We won’t be a single branded company but will take a significant step to recognising these are Jelf companies.

IT: Is this the start of a new era for Jelf?

PB: I think this will establish us as a very powerful player in the market place going forward. We are very much on the front foot. This business is mobilised. We’re through the challenges of the past; we’re now very firmly looking forward and being positive in the marketplace and growing the business.

We’re structuring for growth and preparing the business for what we believe is an exciting journey. It’s about organic growth; we’ve not been making acquisitions for the last 12 months or so and we have been focusing on what we need to do to make the business grow in what is still pretty difficult trading conditions.

We are clearly doing this because it is the right thing for the business, it is the natural next step and we believe we will yield a positive dividend from it.

IT: Could we see Jelf return to the acquisitions table?

PB: I would expect so. Our balance sheet is in good shape, our debt is considerably less that all of our competitors, and we have a new and willing major shareholder in Cap Z. We are well placed. The first thing we need to do though is to establish the right foundation within the existing business; that’s what we are doing and that’s absolutely what we are focused on.

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