Knee surgery won’t get in my way, says Jelf’s new chief executive as he prepares to integrate the business. He tells us why teamwork is so important – and reveals he once played football with two England stars
Talk about no rest for the wicked. Phil Barton is bustling around on crutches just days after a knee operation. “Three weeks before launching a new business in the marketplace is no time to have your leg up,” he says. “This job is what I’ve invested 25 years to do, I’m loving every minute of it.”
Barton has enjoyed a successful career in non-league football (for the anoraks: he played youth football alongside England stars Gary Stevens and Steve McMahon). Now he wants to bring a winner’s touch to his new role as Jelf’s insurance executive. He even speaks like a football manager, saying: “I’m a big believer in attitude and a big believer in belief – some of the lessons in team-based activities do carry over into a non-sporting environment.”
He has big plans for Jelf, driving through the second important stage in the company’s development this year. It involves integrating the acquired business into the group, delivering new products and raising marketing tempo.
The first stage was getting Jelf on a firm financial footing. To recap: private equity firm 3i was replaced by rival Cap Z, which along with institutional investors, injected £19m. Furthermore, banks agreed a £24m five-year loan facility, all of which meant Jelf could trim debt, pay down deferred considerations to acquired companies and generally strengthen its balance sheet.
So it is no surprise that Jelf, which along with the other consolidators paid high prices during the boom years, has put acquisitions on the back burner in 2010. It’s a long way from this time last year, when speculation surrounded Jelf thanks to its falling share price.
A return to form
However, Barton insists that next year will see a return to form. “Because we’ve worked so hard on building our balance sheet and reducing our debt, our deferred consideration is minimal now. We’re in great shape to take advantage of the debt finance markets, unlike many in our peer group who are grappling with very, very significant debt finance issues,” he says.
Barton stepped up from commercial director to insurance chief in April in order to lead Jelf’s next phase of growth and integration in the insurance industry, and those who know him believe he’s a good choice. Aviva director of trading Phil Bayles says: “He’s a sound guy. He’s intelligent, analytical and commercially strong, but he’s also fair, with a very involved approach to broking. I think Jelf is a high-quality outfit, and he and Alex [Alway] make a good team.”
Jelf reported underlying profit up 20% to £4.1m in the half year to 31 March 2010, but insurance revenues for the period fell 3% compared to the same period last year. It is a tough trading market, as group chief executive Alway admits. Are they feeling the pressure from investors, who will be watching the share price closely? “We’re used to operating under the governance and constraints which that environment presents, so I don’t feel the pressure on that,” Barton parries.
Rewards are ‘part of the territory’
He points out that Jelf has been on the alternative investment market since 2004. “We’re an organisation that has a huge amount of energy. We’re passionate about our clients and believe in doing what we say we’re going to do. That’s a hallmark of my approach to business.”
OK, so he’s a cool customer. The Jelf board certainly believes in him: along with other board members, he was handed share appreciation rights (SARs) following the fresh investment. SARs allow directors to cash in shares to increase in value beyond a threshold.
For Barton, it is a side issue. “We have a great team led by Alex. I want to leave my career behind having created a world-class business. The motivator is about something that is special in the marketplace that our clients value. A by-product of that is you’ll enjoy some very nice rewards. I’m not shy about acknowledging this, it is part of the territory.”
Barton started his career in 1983 selling pensions with Scottish Amicable and then with AXA, ending up as managing director of independent financial adviser sales. He left AXA to set up his own consultancy, advising Jelf on its client strategy and flotation.
“I felt really at home in the team that Jelf had created. I decided to fold up the consultancy and focus full-time on delivering within Jelf. That’s what I’ve been doing for the last seven years,” he recalls.
His new role is not for the faint-hearted. In just two weeks, Barton launches the overhaul of the insurance business, starting off with a key structural change. All the separate operating companies including Clarke Roxburgh, Manson and Argyll are to be rebranded in line with Jelf, reporting to group directors. Wealth management is already included, and employee benefits will be integrated by the end of this month.
It comes later than the other consolidators, which started integration immediately after completing an acqusition.
Barton reckons this is an advantage as rival consolidators have suffered real pain when some former business owners jumped ship once restrictive covenants expired. In more serious cases, the consolidators have taken legal action to prevent former staff taking clients.
Reminded of the scare stories, Barton believes his acquired companies are more settled and less likely to rebel. “My belief is that because of the way we have gone about this, and the value we place on all our people and our clients, we will not suffer in the same way. All of us have the same goal: an efficient and profitable insurance broker business. We just go about it in different ways; time will tell which will be the most effective.”
Barton has already got the ball rolling by combining John Lampier and Sons with Jelf Insurance Brokers.
Locality matters to Barton as well. He leans forward, and says firmly: “Our belief is that we can become Bristol’s broker; we want to be known as Bristol’s broker. We have been insuring businesses in Bristol since 1936. We are by far the dominant player. I think we have a great story in the South West and we should make the most of it.”
A former marketing manager, Barton is clearly used to handling the press and is using public relations to push Jelf with local media. A beefed-up development team is working on new products.
Huge responsibilities rest on his shoulders, though worrying isn’t in the game plan. He says: “I think worrying is destructive. A certain level of stress is good. It inspires creativity and energy and gives you the drive to go and make something happen.”
Barton is confident but not arrogant. You would want him in the side if your team was trailing by a couple of goals on a cold, muddy, Sunday morning. He is a proven leader on the pitch, but his greatest challenge will be leading the ambitious Jelf through these tough times. IT