It’s an aspiration of many a would-be entrepreneur, that they set up a business, grow it, make it a success, and then sell it and head off into the sunset many millions of pounds richer. Sadly it doesn’t always work out that way. The multi-million pound headline figure that is quoted at the time of the deal often turns out to be a rather lower figure in the cold light of day. That is what Andrew Thirkill would claim, and he has more cause to warn than most. He reckons the sale of one of his businesses, advertising agency ATP – which he sold in 1988 – netted him personally nothing at all.
“It certainly wasn’t worth it financially,” he says. “Although as a business person the experience made me better.” Fortunately that experience, which we will come to later, didn’t stop him wanting to carry on. In fact, he has been a successful entrepreneur now for almost three decades, with all the trappings that brings – a nice house in Florida, friends in high places, and much, much more. He intends to grow his latest venture, Freedom Back Clinics, into a nationwide chain of chiropractic and osteopath centres and he has been joined in the venture by none other than David Hood.
He didn’t really get to know the man who made millions from Pace until WH Ireland, stockbrokers for Infoserve, a local search company Hood launched after his time at Pace, called him in to be non-executive director of the company which was going through a bit of a wobble.
“They needed a couple of well-established non-execs and non-Pace people who could stand up to David,” he says. “As it happens I didn’t have to, because David is an affable chap, and Infoserve is doing very well now.” As a result of being brought together, however, the two men got talking about ideas, including Thirkill’s idea for a back clinic.
“I really find him fantastic to work with,” he says. “I am an ideas person, and while David is an ideas person as well, he is grounded and sensible. He always looks from the opposite perspective.” They both agreed that the main aim of the venture would be to produce a national brand in osteopathy, something he says the sector hasn’t really had before.
“I am not saying we can improve on quality necessarily,” he says, “but we can improve on accessibility. The principle is high-end chiro and osteo treatment. Not the traditional more cottage-industry type of practice.” The first Freedom Back Clinic opened in Leeds in October 2009 and in its first year, despite the recession, it has had 10,000 customers. Thirkill is surprised by the success, “although when I started to do research I discovered that in 2008 there were 2.8 million searches on the internet for back ailments in UK alone”.
A new branch is shortly to open in London, at North Colonnade, by Canary Wharf. The company, into which £1m has so far been invested, has also just got planning permission to open a third branch in a listed building in Albert Square in Manchester. They are in negotiations to open a second London branch, this time in the City proper, and a fifth branch in a “northern market town”. That will be the first to depart from the strategy of locating in large city centres.
“We are geared up to ease of access for office workers,” says Thirkill. “You can only start somewhere, but back treatment is blue collar as well.” They plan to have six branches open by the end of 2011, and possibly as many as 20by the end of 2014. The only thing that is holding them back from more rapid expansion is finding the right property. Even now, landlords are not always happy to welcome a clinic as a tenant, because bringing them in involves getting a change of use, which landlords fear might be irreversible.
“In the north they think anything is better than nothing, but in London they know they can always find someone for these premises,” he says. “It does make us less desirable as a tenant, even with David’s vast financial wealth behind us.” Thirkill and Hood have already started looking at other areas of ancillary healthcare that could also be turned into a national brand.
“We are looking to go into chiropody as well,” he says, “and looking to leverage the Freedom brand elsewhere. We are taking a calculated risk because nobody has done this before, and each clinic employs 16 people. But we have learned a lot in 15 months.” Thirkill probably learned a good deal in a previous role, because this isn’t the first clinic company he has managed. He had a big role in turning around Ultralase, the laser eye surgery company, when it hit a blip in 2003.
“It was predominantly a marketing role, but I was quite involved with a business that was in trouble,” he says. In fact, after the company was sold to Spanish buyers in 2005, he even toyed with the idea of setting up another laser eye surgery business. While that didn’t happen, many former Ultralase managers work for companies he runs now, including Diane McKerracher.
She was Ultralase operations director and moved on to Optical Express before Thirkill headhunted her as chief executive of Freedom Back Clinics. He seems to have made a habit of going into industry sectors which can be said to have had had a shadowy image in the past, in an attempt to turn them around. Even today, for example, osteopaths and chiropractors haven’t entirely shaken off their “quack” reputation.
It’s undoubtedly one of the reasons the British Chiropractic Association fought so hard in its ultimately unsuccessful libel action against Guardian journalist Simon Singh who had questioned some of its claims about what chiropractice can achieve. Laser eye surgery has in the past also come under a not-alwayspositive spotlight. Thirkill admits that he does enjoy “raising the bar”, although he insists there wasn’t any problem with laser eye surgery as a practice, it was just that thanks to the activities of less scrupulous companies, the whole sector got a bad press and that affected Ultralase.
“The bad press didn’t only stop people enquiring,” he says. “It stopped people who were in treatment completing their treatment. And that had an impact because the treatment cycle takes six weeks, and in all that time the business has high fixed costs. “So if the revenue stops coming in even for a short time, you are left with enormous fixed costs.” But raising the bar is certainly what he is aiming to do with Age Partnership, a specialist equity release brokerage company. Thirkill founded the business in 2005, and it’s clear that while it had been in planning for sometime, he was waiting for the industry to become fully regulated in that year with the introduction of the Safe Homes Income Plan (SHIP) regulations.
“We really pride ourselves on standards,” he says. It’s not hard to see why this is an issue. Equity release was initially promoted as a means for people close to or in retirement to raise money for capital projects by borrowing on the equity of their homes. It sounded a good idea, but it only took a few horror stories about cowboy operators and people borrowing more than their house was worth for the likes of the Consumer’s Association to warn that equity release should only be viewed as a lender of last resort, if that.
Even Barclays got its fingers burned with shared appreciation which, while not strictly speaking equity release, encouraged people to give up a portion of the value of their homes in a way that was judged unfair. Barclays has subsequently had to set up a hardship scheme for affected customers. Thirkill says all that has changed since regulation, and the rates that equity release products can offer – 6.5%, say, but fixed for 30 years – make the product very compelling. But he admits there is still an awareness issue.
“People shy off because they say they love their house,” he says, “but equity release really is identical to a mortgage where the mortgagee has a charge on your house.
“You borrow the money and you pay interest which is rolled up. When you pass on and your property is sold, you or your estate pays off the mortgage company. “Typically, if you borrow £25,000, it takes 11 years for that £25,000 to double. You would hope over that time that the property will have increased at a similar rate, if not more. There is never any chance of not meeting payments and risking foreclosure.” Age Partnership offers equity release as a lump sum or you can have a draw-down facility.
And unlike before regulation, you are not required to take out more than you actually need. SHIP regulations mean the whole process has to be vetted by an independent solicitor. Age Partnership has certainly grown strongly.
In just five years, it has become number two in the market, with an 18% market share, a turnover of £4.4m in 2009, and profits of £589,000. Operations director Simon Warhurst, another former Ultralase manager, says the company is just putting its toe in the water in other areas too, offering customers advice on annuities. He says the company stands to gain from the ever-increasing numbers of people reaching retirement.
“There’s a huge upturn in baby boomers hitting 65,” he says. Thirkill says that while the focus for the moment is on growth, as with Freedom Clinics, building a valued brand is just as important.
“We believe that in 20 years Age Partnership will be a brand that will be recognised,” he says. It is easy to see why he is so keen on standards, however, when you see to what extent he himself was a victim of poor standards in business practice. Here we come back to the issue of his sale that didn’t achieve anything – “a bad period in my life” he calls it. In 1988 he sold ATP, an advertising agency he had built up from scratch over eight years after leaving the Yorkshire Post at the hoary age of 22, to Moss Trust. Moss was a quoted company, and with offices all around the world it seemed a haven for Thirkill’s baby. So he accepted a deal in which the vast proportion of the money he got was in the form of Moss Trust shares. What he didn’t know was that the company was on the verge of bankruptcy and was mainly interested in his company because of its healthy balance sheet.
“The Yorkshire Post was always very kind to me,” he says, “and at the time they wrote a story saying, ‘Ad man Andrew sells for £2.7m’. I actually only got £135,000. The rest was in shares. My business had £600,000 in the bank, and in late 1988 that was a lot of money. I was conned.” The company still went under, making his shares worthless, then the bank asked him to come back in and run Moss Trust to try to save it. There followed 18 months of rampant restructuring, with both Sir Ralph Halpern and Sir John Harvey-Jones – who he brought in as non-executive directors – being amazed at his tenacity. But the scotching of a rights issue by existing shareholders and the death of his father persuaded him that enough was enough, and he took advantage of a clause he had included in his agreement with the bank and took what remained of ATP back out of the company.
It wasn’t all bad news, however. While all this was going on he successfully sold Talking Ads, another of his businesses, to the Yorkshire Post. And he sued each one of the Moss Trust directors personally, with each director settling out of court in his favour. But how would he advise someone in a similar position to the one he was in when he was approached by Moss Trust? “Simple,” he says.
“Take cash.” What, always? “Well, it depends. Shares are a currency. If I am taking shares in Aviva, that’s not the same as taking shares in Moss Trust in 1988. It’s like taking US dollars out instead of whatever they have in Zimbabwe. (Also dollars, actually.) If the purchasing company is outside the FTSE350 you have to be careful, because you can end up with nothing.
“I was lucky because I was only 30 at the time, so I was able to cope. You can recover at that age, you are full of ideas.” Aged 51 now, he still seems to have a good few ideas coming.
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