Norman Broadbent raises £2.3m from equity investors
Norman Broadbent plc has today confirmed the result of its conditional fundraising. Norman Broadbent has raised £2.3m from new and existing equity investors to fuel future growth plans.
The offering attracted investment from a range of high-profile investors such as Miton and City Financial Investment, as well as securing backing from existing investors including Jon Moulton, Downing and Ennismore. It has also announced the intention for Frank Carter to join its Board as non-executive chairman. Carter is currently a senior adviser to KPMG following 18 years as a senior partner in the firm's Corporate Finance business. The fundraising is to be confirmed at a shareholder meeting later in September, with the intention that Carter to join the board afterwards.
Having undergone significant restructuring in recent years Norman Broadbent (‘the Group’) appointed Mike Brennan as group chief executive officer in April of this year. The company says this has been a major milestone for the business and particular catalyst for a more recent review and programme of change. This review has focused on defining the Group’s core brands on a sector-by-sector and function-by-function basis and has examined how the Group’s brands can add further value to clients through complementary business practices and synergies.
The Group’s investment plans include:
Ø Further scaling and strengthening the core Norman Broadbent Executive Search business
Ø Promoting innovation and broadening the Group’s overall client offering by investing in the growth of the Group’s Interim management business and NB:Solutions
Ø Encouraging cross selling of its services and introducing better account management systems
Ø Providing clients with Research and Market Intelligence services
Ø Building long-term contracted recurring revenue streams via Norman Broadbent Interim
The Group’s clients include many well-known ‘blue chip’ organisations, giving access to key recruitment decision makers enabling the potential to cross-sell value added services and to grow recruitment-related market share within key customers. The Group believes that NB Solutions and Norman Broadbent Interim have the potential to leverage key client relationships as part of its growth strategy. Following the restructuring of the existing Norman Broadbent Interim business, the Group has appointed a new managing director from a well-regarded competitor to head up this division. In another significant move, the Group has also appointed an overall head of business & client development from a competitor to help drive growth.
Since Brennan joined, the Group has:
Ø Reviewed each of the operating businesses
Ø Commenced the build-out of the Norman Broadbent Interim offering
Ø Issued options aligning staff and management with Shareholders
Ø Identified areas of potential growth, particularly within executive search, to help smooth out revenue peaks and troughs and scale key sectors and areas of functional specialisation
Ø Sought to grow repeat business and institutionalise client relationships further
Ø Continued to review the Group’s overall cost base and identify further efficiencies
Whilst The Group’s intention is that this will predominantly be an organic growth strategy, it may consider smaller acquisition opportunities. Large scale acquisitions are not considered to be a core element of the Group’s strategy at this stage.
The majority of money raised will be used to hire c.50 additional fee earners across the Norman Broadbent Executive Search, NB Solutions and Norman Broadbent Interim divisions over the next two years as well as additional research and support staff.
The Group believes that as a result of this growth strategy they have the potential to generate gross revenues of over £20m with this being comprised of a mix of ‘annuity’, contract and permanent revenue. The Board further believes that there is the potential to expand the Group’s profit margin to industry norms of approximately 10 to 15 per cent over the same time horizon, with a major contributor to this profitability expected to be the Norman Broadbent Interim division.
Brennan said, “2016 looks to be a transformational year for Norman Broadbent Group. Not only have we attracted new investors but our existing ones have also backed management’s vision. Our ambitions for the future have landed well in the market and we are attracting strong talent keen to be part of the Norman Broadbent story. We aim to continue building a highly focused business which helps companies address their executive level talent challenges in a flexible, time efficient and commercially compelling way. The world of work is changing and we intend to help our clients adapt to those changes and successfully tackle whatever challenges they may present.”
Krystyna Nowak, managing director and head of Norman Broadbent’s board practice, added, “This is an exciting time to be part of Norman Broadbent. Although we have a very clear growth strategy for the future, our culture, values and commitment to the highest standards of professionalism remain unchanged.”