Budget group chief executive Peter Winslow says Junction is the pot of gold in his growing portfolio and his investors are happy to let him use their cash. Jonathan Russell reports
' Viewed from the white leather sofas of Peter Winslow's executive suite in Peterborough, life seems very comfortable. But it's not just the physical environment that puts you at ease. From a financial point of view Winslow is in the happy position of looking forward to an extended period of inward investment, aimed at making Budget the number one personal lines broker in the UK. By mid-2007 Budget's target is to have over two million policies in the UK.
The key to Winslow's confidence stems from the fact that his South African backers are happy to reinvest profit for long-term gain, rather than extract a short-term profit.
He said: "It is an enviable situation to be in, but to be honest I think we have earned it.
"In the end they are commercial people. They need to understand what the return on their money is. They don't choose to extract the return on their capital because investment in this business is very good."
Across the Budget Group there are signs of growth. The affinity arm Junction boasts never to have lost a tender process. The motorcycle broker Bennetts reports a 50% increase in profits against a market share that has jumped from 12% to 16%; and even Budget's high street business has reported an increase in volume.
Winslow said: "High street brokers are unfashionable, but it is to do with where you have your shops and the calibre of your management.
"We have a very high calibre in our retail business. Last year it had its best year ever."
Winslow backs up his enthusiasm by revealing Budget's plans to grow its high street presence from around 85 branches to 150. At any one point, he says, Budget has around 400 acquisitions in the pipeline.
But it is clear, both from talking to Winslow and reading news reports coming out of the group, that the main areas of growth will come from Junction, backed up by capacity from the new contact centre in South Africa.
The South African centre is key to Budget's expansion, and just one of Winslow's answers to rumours that his company was suffering capacity problems earlier in the year.
He said: "We just did not have the capacity to take on the Post Office deal earlier in the year because it had a very, very tight timescale.
"We said, 'OK, we are going to do our level best here.' What we actually did, in the short term, was to sell off some of Budget's own calls to free up space for our clients' business.
"We are not short of capacity. We just have to be clever about using it to its maximum."
Despite these calming words, it must come as some relief to him that the South African operation has been successfully integrated into the business.
The contact centre currently employs 110 people and is on track to hit its target of 200 within months.
Indeed Winslow is so positive about the business he is talking about expanding it to 500 seats in the next two or three years.
But for now, after the successful launch of Junction, Winslow claims the emphasis is on bedding existing business rather than planting more.
He said: "If we're going to build a big business out of Junction, which we hope we will, we're going to have to make damn sure we service it properly and our reputation is good.
"Then word of mouth will apply to our growth."