Factoring in success

Factoring in success

One is flamboyant and outgoing, the other is more measured and organised. Together Stephen and Kirsten O’Neill make for a winning combination, writes BQ Scotland editor Peter Ranscombe.

“I know you’ll find this hard to believe, but I’m a bit of a show-off,” admits Stephen O’Neill as his face lights up with his trademark smile and he roars with laughter. Sitting in the office of the managing director of Newton Property Management, it’s hard to argue with him.

His room feels more like the lounge in a modern city centre flat than a workplace, with the glass desk pushed up against one wall and the space instead dominated by a two-seater sofa and chair, both with dark wooden frames and bright red upholstery. In the corner, three brightly-colour heads – made by his daughter Rachel, who runs an art gallery in Ho Chi Minh City in Vietnam, and cast using her boyfriend’s skull as a model – sit on three shelves, one above the other. His Porsche is parked out back.

While his office may feel like an art gallery, the rest of Newton’s Glasgow headquarters live up to the same standard. In reception, modern lighting dangles from the ceiling at odd angles, while the biggest wall is covered by a huge collage of black-and-white photographs depicting rubble and ruins on derelict sites, along with a gunmetal grey ship listing at sea. The whole setup oozes modernity and style; perhaps as a physical embodiment of the boss.

To describe Stephen as “flamboyant” would be an understatement. When we meet, he’s wearing a grey and black checked suit, with a classic white shirt and a thin black tie. If I bumped into him on the street then I’d be more likely to think he was a fashion designer or graphic artist than the head of a residential letting and property factoring business that turns over more than £2m and has just expanded from its Glasgow heartland into Aberdeen.

It’s fascinating to contrast 59-year-old Stephen’s Austin Powers-like exuberance with that of Kirsten O’Neill, 28, his eldest daughter, who joined Newton as a director in the autumn of 2014. While her workwear is in more traditional colours than those of her father, she still shares the same stylish appearance and infectious smile and laughter. Though Kirsten comes across as perhaps more thoughtful and reflective than her old man, it’s clear that she shares his entrepreneurialism.

After studying design and applied arts at Edinburgh College of Art, Kirsten became a brand manager at Harvey Nichols department store in Edinburgh, before taking on the role of a general manager with fashion chain French Connection. “I would be sent into under-performing stores to turn them around and make them more profitable,” Kirsten explains.

Her retail operations job took her to Nottingham, where her dad was impressed with her work. “I could see the difference that Kirsten was making in the shop,” Stephen says. Her dad had his own turnaround plan in mind. “We’d had an issue in the business,” he admits. “We had growing pains as many businesses have and we needed to grow up a wee bit, in the way we handled holidays, in the way we laid out the office, in the way we structured the business.”

To solve the problem, he called his daughter. “It was all very tentative,” Stephen says. “I asked her, ‘Kirsten, what would you say if your dad was thinking about asking you to come and work with him?’.”

“And I said, ‘Dad, I’ve always wanted to work with you, but I’ve never wanted to ask just in case you said no’,” replies Kirsten. “I’d always aspired to join the business at some point but I wanted there to be a value to me being here – I didn’t want to be invited to join just for the sake of it.”

The story brings a tear to Stephen’s eye and it’s easy to see the pride he feels for his daughter. When she arrived at Newton, Kirsten spent time getting to know the staff and learning about how the business worked before starting to put the systems in place to make its operations run more smoothly. “I used to just let people sit where they wanted in the office, but Kirsten has organised it so the right people are sitting next to each other,” says Stephen.

“You get the best out of people that way,” Kirsten explains. “If you’re sitting next to the wrong person then it can be a big distraction.”

The drive for organisation and streamlining even extends to the ‘key rooms’. One security-locked room contains all the keys to the properties that the company rents out on behalf of landlords, while the other houses the keys to the properties for which Newton provides factoring services, such as looking after communal areas and gardens.

Kirsten’s influence has not only extended into where members of staff sit but also into the roles that they play within the firm. “We had one guy who had reached as far as he was going to go in his current role,” Stephen explains. “But Kirsten called me up one Thursday night and suggested moving him sideways into a new role. Since then he’s flourished.”

Her training in design is also apparent in the look of the company’s website, and in the styling of the head office. Having a younger pair of eyes around has also helped with digital marketing. It’s all a far cry from the Dickensian factors’ offices of the 1970s, which Stephen remembers from when he was starting out in the game.

Bringing the next generation into the family business is a familiar path for Stephen. William O’Neill, his father, was a chartered surveyor who opened what was only the second estate agency in Glasgow in 1960 and then the first in the West End a few years later. Growing up, talk over the dinner table was always about business, about shares, about partners, about opening offices, about new ideas.

Hearing about his father’s work gave Stephen a taste of the excitement of business and he enrolled at what was then Paisley College of Technology – and is now the University of the West of Scotland – to study surveying. Although he didn’t qualify, Stephen joined the family firm, which grew to have ten offices throughout Scotland.

When his dad retired and his business closed, it seemed only natural that Stephen would set up his own company, which he did in 1994. He kept the name ‘O’Neill’s’ for his new lettings agency, which struck a chord with clients, especially those who remembered his father’s operations. Stephen sold the company in 2001 to Ralph Weir in Edinburgh for £700,000.

“I sold it because I think my dad regretted never selling his business,” he says. “It was at its peak and so I decided to capitalise on it. The way I went about it was very deliberate. In the year running up to the sale, I built up quite a high profile for myself in the media, commenting on things. It was all about getting the message out there. I wasn’t quite saying ‘There’s a “for sale” sign up’ but it was about raising awareness among the people who I thought might buy it.

“There’s a slightly apocryphal story about what happened after the sale. I went to Adam & Co, which was my bank, and I said to them that I wanted to take all of the money out in cash. They looked at me askance and said ‘Ok, but it will take five days’. So I went back to their office and there was this big pile of money on the manager’s table. And I said ‘That’s great, you can put it back now’. So he asked what I was up to and I told him that I just wanted to see what all that money looked like.’

It wasn’t long before Stephen, who was then only 45, was back in business though. He kept the factoring side of O’Neill Letting and two of his clients, Sean Robinson and Brian Clarke, joint managing directors at Glasgow-based property investment company Park Lane, approached him about making an investment and Newton was born.

Initially the firm focused solely on factoring – which still accounts for 80% of its turnover – due to a three-year restrictive covenant with Weir, before then expanding into residential letting. Now the company has 25 staff in Glasgow and a further five workers in Aberdeen after taking over Watt & Co from Ross Watt, who has become one of Newton’s shareholders and a director.

“It’s very much a merger because I wouldn’t have bought Watt & Co without Ross Watt,” explains Stephen. “He’s very much in my big plan. I’m not just saying that to make him feel better. He comes from a project management background in the oil industry and he has director-level potential that I want to develop.”

Watt joins a board that already includes Stephen, Kirsten and Derek MacDonald, who joined the business in 2003, as well as finance director William Cowie, who isn’t a shareholder. While Clarke and Robinson from Park Lane are shareholders rather than directors, Stephen feels they fill the role of non-executive directors by offering advice and sharing their experience. “It just goes to show that it’s not all the Stephen O’Neill show,” laughs Stephen.

“There’s a fine line to tread, because we want to retain dad’s personality in the business, which he’s used to build it up, but at the same time – when you get to a certain size – you need to streamline and structure the business slightly differently,” Kirsten explains.

Following the acquisitions this year of Watt & Co and Glasgow-based Greenhome Property Management, Newton’s turnover next year is expected to exceed £2.5m and the O’Neills have ambitious plans for further expansion. “We’re not trying to take over the world,” says Stephen. “But we now have more director-level mouths to feed. All of our expansion so far has come from cash reserves within the business. We have a sensible profits policy in that 40% is retained by the business, 30% goes to the taxman and 30% is paid in dividends. We don’t want to be beholden to the banks, but we also recognise that, in the next few years, I would like to see further considered growth.

“Obviously Edinburgh is in our sights – but it’s got to be a perfect fit. I want to continue to get a bloody good income from the business, almost like an endowment. But, unlike a lot of people when they approach retirement, I don’t have to sell my stake in the business and then try to earn an income from that capital. I don’t have to do that – I can let her work for me,” he laughs, pointing to Kirsten.

“I have a slightly different exit strategy,” he adds. “I want to continue to grow the business. I’d like to see our earnings go north of a couple of million quid – then we’d all be doing very nicely thank you. I might give up and live abroad. I quite fancy Bali.”

The Far East appears to appeal to the family. While Rachel, 26, continues to work in Vietnam, Stephen could also see her joining the family business one day. There’s also a creative streak that also runs through their DNA.

While Rachel sells art and Kirsten puts her design skills to use in the office, Stephen has a more unusual outlet for his creativity – he is a trapeze artist. “I can still do a 180-degree turn on the flying trapeze,” Stephen smiles. “I still do the travelling rings above the pool at the Western Baths too.” Kirsten is also competent on the trapeze and the pair share passions for eating out and for cars.

“There was a great photo of me sitting on the trapeze at the Western Baths reading a copy of Le Monde that was taken for The Herald newspaper a number of years ago,” remembers Stephen, who may be a show-off, but knows to temper it with a put-down.

“I got a copy of it printed and they put it up at the bar at the baths. So I took some clients in one day to show them it, but someone had got drunk the night before and had scribbled a rude word on the bottom of the picture with a marker pen. So I signed it ‘You’re correct’. Cruel but fair.”

So what’s it like for a father and daughter working together? “The best bit is getting to see dad all the time after living away in Nottingham,” says Kirsten. “Also being able to suck up as much of his knowledge and experience as possible while he’s still here and not on a beach.

“The worst bit is that we’ve got distinctly different personalities – my dad is quite ad-hoc and makes decisions very quickly, which can be hugely beneficial. Whereas I’m much more measured and planned, but that can mean that I plan things too much. So we get on quite well together; what I lack my dad brings, and vice versa.”

Stephen adds: “When Kirsten first joined, there were a few times when she voiced alternative ideas to mine and I went off in a huff because I was so used to getting my own way. There were a few times when the hairs on the back of my neck would stand on end and I would say ‘You cheeky besom’. But quite quickly, I accepted it because I could understand the value of what she was suggesting.

Seeing her shine is the best bit. Kirsten’s the kind of person who could give you a kicking and you’d feel like you’d had a cuddle. Seeing her dealing with staff and then dealing with the directors at board level I think ‘That’s my girl’.”