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Top seeds, fast growers

Special report, Mail on Sunday
10 July 2001, 12:00am

FEAR of recession may be haunting boardrooms across the country, but some directors do not have time to worry about it. They are too busy driving forward ambitious plans for their successful young companies.

Nick Jones is one of them. In 1996, he set up a firm specialising in freight forwarding. He went into business from his Leeds base with little more than a fax machine and a couple of computers.

Jones tapped a rich vein. Within five years, Redfern International Logistics, with annual sales of £7m, has become one of Britain's fastest-growing unquoted companies by both sales and profit.

Redfern heads the British Top Seeds section for logistics and distribution with 87% compound annual growth in sales over three years. Profits jumped 41% over the same period.

Jones set up Redfern in direct competition to his father's company. He says: 'At the time, it was a typical father-and-son disagreement. I wanted to go in one direction with his business and he wanted to go in another.

'I decided to start from scratch. I wouldn't make the same decision again - it was foolhardy.'

But Jones had a natural entrepreneurial flare. And, crucially, he had virtually no start-up costs.

Freight forwarding is a matter of getting goods from one point to another by sorting out the paperwork for shipping costs and other essential elements. All that was needed was a fax, a phone and a computer.

Yet Jones was focused on how he wanted his company to grow. 'When we started, the export market was buoyant and we were swamped. We sold aggressively and priced aggressively,' he says.

Jones began to add business acumen to his youthful exuberance. He realised he could not rely on the export market so he started to offer freight forwarding for imports as well. He caught the market at the right time and when exports started to dry up, the business continued to expand. 'The long-term strategy is to be strong across the country. At the moment we are strong in the North, but don't have a presence in the South. The next step will be acquisitions,' he says.

Jones has much in common with the other British Top Seeds. All the entrepreneurs share a vision for their business.

Ben Hewetson, associate director in the business services team at HgCapital, says measuring both sales and profit growth gives a unique insight into the nature of these companies. 'Running a business is about building both sales and profits,' he says.

'It is ultimately about profit, but sometimes in private companies you must reach a critical mass to create a stable platform for long-term growth.'

Using data from Fame, which provides information on public and private companies, and Burean van Dijk, which provides software to analyse information, HgCapital has trawled thousands of firms in the business services sector to build a comprehensive list of the fastest-growing companies.

To qualify, the contenders had to be UK-based, private companies or stand-alone businesses, have at least four years' filed accounts, and minimum annual sales of £5m. The analysis is not exhaustive because there are other measures of growth, but it does demonstrate the mettle of firms within the business services sector.

It has been split into four categories: recruitment, logistics and fulfilment companies, such as Redfern, outsourcing firms and consultancies. Recruitment agencies show the biggest percentage growth. Dataworkforce, based in Bromley, Kent, achieved 291% growth in sales over the three years that the data was analysed, and 150% growth in profits over the same period.

But even the other categories of business have produced stunning growth in the three years - in many cases against a background of poor or volatile market conditions in the technology market. For example, World Class International, a management and technology consultancy in Denmead, Hampshire, heads the list of consultant firms with a 134% growth in profit.

Rovtech, an Aberdeen firm that consults on underwater services for the oil, gas and cable sector, tops the list of firms with the fastest rise in sales over the three-year period - 63%.

Regent Office Care, a contract cleaner based in Haselmere, Surrey, produced a 66% growth in profit and tops the list of outsourcing firms.

And Mailroom Management Services of Richmond, Surrey, which manages companies' post rooms for them, has recorded a 60% growth in sales in the outsourcing category.

The British Top Seeds demonstrate that though it is hard to sustain high growth, there are many companies in all parts of the country that are expanding quietly and achieving success.