Britain's Most Admired Companies 2014

Little known Johnson Matthey wins Britain's Most Admired Company 2014, but Next and John Lewis put in stellar performances too.

by MT Staff
Last Updated: 04 Oct 2016

If 2012 was the year of the quiet individual, thanks to Susan Cain's bestseller Quiet - The Power of Introverts in a World That Can't Stop Talking, then 2014 may turn out to have been the year of the quiet company.

It's certainly true that the new winner of the coveted title of Britain's Most Admired Company is not one to shout about its successes. It has, by the standards of past champions, a vanishingly low profile.

Love 'em or hate 'em, the likes of Diageo, Unilever and Sky - all proud previous holders of the award - are household names. But only those in the know will have come across 2014's trophy-lifter: the latest admiration laurels go to the most successful company you've never heard of, Johnson Matthey.

Actions speak louder than words for Johnson Matthey, the world's largest maker of automotive catalytic converters. Its first-half profits were up 1.6% to £216.4m on sales up 1.9% to £1.51bn - excluding sales of precious metals, which it trades in largely to support its main business. Platinum being the actual catalyst in all those smog-reducing catalytic converters, of course.

Its win is a timely reminder that the best and strongest reputations are cast from the solid gold of real achievement rather than the base metal of spin and hyperbole. 'We do try to keep our heads down and just deliver,' admits new CEO Robert MacLeod, who took over from veteran Neil Carson when he retired earlier this year. 'We've been in the emissions-control technology market for 40 years, in which time our products have prevented 500 million tonnes of pollutants entering the atmosphere. We do things that are not only clever and difficult, but that our people can be proud of.' Johnson Matthey also picks up the criteria awards for value as a long-term investment and the ability to attract, retain and develop top talent.

By consistently investing in R&D - currently £150m a year, maintained even through the crash of 2008 when all about were slashing spending - the firm has made this lucrative area of industrial chemistry its own, cornering 30% of the market. Dating back to 1817 when Percival Norton Johnson set up shop as a gold assayer in London, Johnson Matthey remains a long-term game for MacLeod. 'We're about to enter our third century and the decisions we take are not about the next quarter or the next year, but what's going to be happening in a decade's time.'

That's why it has recently decided to diversify into the field of battery technology, buying the energy-storage business of Swiss-based Clariant AG for £46m in October. The firm makes lithium iron polymer cathodes, a key component of the type of high-energy batteries increasingly used in electric cars. 'We look to innovate in high-value niche markets that talented people will want to work in,' says MacLeod. 'Making a battery for an iPad is one thing, but making a battery for a car is quite another. That will be the hard thing to do.' Three cheers for a well-deserved winner that chooses, as President Kennedy said of the moon shots, to do things not because they are easy, but because they are hard.

In second place this year - up a remarkable 30 places from 2013 - comes a very different but similarly well-regarded business, fashion retailer Next. Its too is a tale of a strong vision consistently applied - under boss Simon (Lord) Wolfson, Next has been reaping the rewards of more than a decade spent assiduously streamlining, tweaking and optimising its systems and approach, right the way from supplier to store - and, of course, online. Even its first profit warning since 1998, £25m of lost profit due to the warm autumn, didn't ruffle many feathers. Given the tough market for retailers and the well-publicised travails of rivals such as M&S and Debenhams, Next is also a deserving winner of the overall awards for quality of management and use of corporate assets.

Another stand-out success in a tricky climate is third place easyJet, crowning a vintage year in which the budget airline continued to outpace its opposition. Even Michael O'Leary, the outspoken boss of Ryanair, was forced to admit that 'easyJet wiped the floor with us'. We can only imagine the smile that must have put on easyJet CEO Carolyn McCall's face. EasyJet's share price has risen by over 20% in the past 12 months and, with 2014 profits up 21.5% to £581m and a record 13 million seats available over the bumper summer season next year, the budget airline's original 1995 slogan, 'Making flying as affordable as a pair of jeans', still rings true.

But although Ryanair is languishing down at 85 this year, don't expect it to be out for the count. In August alone it carried a record 9.4 million passengers, after the launch of a new cheap-and-cheerful business class ticket.

As a peer-review survey, the essential question that Britain's Most Admired Companies sets out to answer is 'How do your rivals rate you?' It is based not on hard metrics such as financial performance, but on the more mutable but equally important quality of reputation. The winners are chosen not by a panel of judges, with all the horse- trading that implies, but by every company's sternest and best-informed critics - its immediate competitors.

It's an approach that provides an interesting snapshot of sentiment in UK plc. Professor Mike Brown of Birmingham City Business School, the author of the Most Admired research since day one over 20 years ago, sums up 2014 thus: 'As the economic outlook continues to improve slowly, it's a year of cautious optimism. Firms know it's not all Shangri-La and that there are still plenty of bumps in the road, but they are tentatively looking for growth opportunities all the same.'

This year's survey also suggests that specialists may be gaining on generalists. Many big, broad-based names whose businesses span their chosen markets are notable by their absence from this year's top 10. The aforementioned Unilever (11th), Diageo (12th) and Sky (14th) for starters. There are a mere pair of retailers - Next at second and John Lewis a worthy fifth (see box on p32) - a sector that has provided more Most Admired winners over the years than any other.

By contrast, specialist outfits that operate in tightly defined and more readily defended commercial arenas are on the up. As well as winner Johnson Matthey, there are three others in the top 10: valve actuator experts Rotork, surfactants and cosmetics ingredients maker Croda International and property real estate investment trust Derwent London, which focuses on commercial space in the capital.

So perhaps as overall levels of competition rise again, those firms whose modus operandi includes genuine proprietary knowledge are the ones that prove harder to disrupt. (Having said that we must also acknowledge that the specialists have not all had it their own way. Many of them rely heavily on global markets for their income and the strong pound has been an abrupt check on the competitiveness of exports this year.)

In fourth place, the Emerald Isle's favourite odds-giver, Paddy Power, puts in its best-ever BMAC performance. What better note for long-time CEO Patrick Kennedy to bow out on? He is being replaced by Andy McCue, currently head of retail for the UK and Ireland. Fittingly for a firm known for attention-grabbing PR stunts (masterminded by 'mischief champion' Harry Dromey, son of parliamentary power couple Jack Dromey and Harriet Harman), Paddy Power also takes the award for quality of marketing.

New Paddy Power CEO Andy McCue starts in January

McDonald's celebrates 40 years in the UK with its highest-ever position: its remarkable 32-place jump makes it the second-biggest riser in the top 10. Curry may have replaced fish and chips as the UK's favourite fast food, but Brits love a Big Mac or McChicken Sandwich too - three million of us eat there every day.

However, the golden crampons for 2014's highest climber go to pharma giant AstraZeneca. Fresh from fighting off a £69bn takeover bid from the US's Pfizer, which seemed driven more by tax expediency than any real commercial synergies, AstraZeneca leaps no fewer than 158 places to 54th. If Pfizer returns for another go, let's hope Astra can best it again.

L ast year's winner of the award for Britain's Most Admired Leader was Justin King, the now-retired ex-CEO of Sainsbury's. This year remains true to form inasmuch as the title goes to another retailer: Andy Street of the John Lewis Partnership. His outspoken views on the injustices of multinational tax avoidance by the likes of Amazon (not to mention the hopelessness or otherwise of the French) clearly resonate out there in UK plc. But we can't help wondering what his boss - JLP chairman Sir Charlie Mayfield - makes of missing out on the gong himself. Or Street's oppo at Waitrose, Mark Price, come to that.

Having feted the winners, let us not shirk our duty to examine the other end of the league, the turbid depths where the bottom dwellers lurk - Britain's least admired companies.

The bad news for the winner of 2013's wooden spoon, Bank of Ireland, is that it has managed to inch up just one place, with only the unloved Co-operative Bank held in lower esteem. Surely now the only way is up? As for the Co-op Bank, it seems it will take more than a few TV ads featuring earnestly muscled chaps with 'Values and Ethics' tattoos to repair the damage done by disgraced former chairman and 'Crystal Methodist' Paul Flowers.

At 230 - seventh from last - comes government outsourcing giant Serco, down a whopping 67 places from last year on the back of the electronic tagging debacle that cost both former CEO Chris Hyman and chairman Alastair Lyons their jobs, plus a £1.5bn hole in the accounts and a string of profit warnings. New broom Rupert Soames is going to need all his famous granddad Winston Churchill's bulldog spirit to sort out the mess.

But perhaps this year's most torrid tale is that of Nigeria-focused oil-exploration business Afren. It comes in at 232 - only fifth from last - after a twelve month that resulted in that greatest of all corporate rarities, the sacking of a CEO for gross misconduct. In fact, not only the CEO - Osman Shahenshah - was thus dispensed with, but also his colleague COO Shahid Ullah. All as a result of their receiving $17m worth of secret payments, which the company is now mulling over the legal possibilities of making them give back.

To cap it all, two other associate directors - Iain Wright and Galib Virani - also received their marching orders and are facing legal action. Whether introvert, extrovert or somewhere in between, there's not much to admire about a sordid story like that.

2014 2013 Company Score
1 7 Johnson Matthey 72.93
2 32 Next 72.29
3 9 easyJet 71.17
4 8 Paddy Power 71.06
5 4 John Lewis Partnership 70.57
6 50 Kier Group 69.88
7 11 Rotork 68.63
8 5 Croda International 68.20
9 10 Derwent London 68.12
10 42 McDonald's Restaurants UK 68.07
11 3 Unilever 68.00
12 1 Diageo 68.77
13 15 Victrex 67.82
14 33 Sky* 66.59
15 2 Berkeley Group 66.57
16 53 RB* 66.46
17 29 BASF (UK) 65.25
18 27 GlaxoSmithKline 65.09
19 109 Admiral 64.91
20 6 Stagecoach 64.80
21 97 William Hill 64.79
22 66 Domino's Pizza (UK) 64.78
23= 63 JD Wetherspoon 64.50
23= 85 Kerry Group 64.50
25 19 SAB Miller 64.44
26 35 Aggreko 64.26
27 16 Great Portland Estates 64.20
28 24 Carphone Warehouse** 64.13
29 17 Hargreaves Lansdown 64.12
30 115 Glanbia 63.88
31= 23 Intertek 63.50
31= 70 Spirax-Sarco Engineering 63.50
33 87 Keller Group 63.17
34 41 Babcock International 63.14
35 51 International Airlines Group 62.89
36 64 Galliford Try 62.86
37 75 Aldi (UK) 62.92
38 77 Betfair 62.45
39 111 Alliance Boots 62.44
40= 39 Aberdeen Asset Management 62.43
40= 116 Carillion 62.43
42 67 Capita Group 62.38
43 54 Coca-Cola Enterprises 61.88
44 108 Prudential 61.80
45= 37 Bunzl 61.67
45= 82 AB InBev (UK) 61.67
47 25 Elementis 61.57
48 - Transport for London 61.53
49 12 Rolls-Royce 61.35
50 13 Abcam 61.25
51 80 HSBC 61.22
52 55 Costain Group 61.17
53 72 St James's Place Wealth Management 61.13
54= 150 Restaurant Group 61.11
54= 212 AstraZeneca 61.11
56 61 Schroders 61.10
57 49 Shire 60.82
58 98 Go-Ahead Group 60.73
59 44 Melrose 60.69
60= 30 Royal Dutch Shell 60.64
60= 118 Greene King 60.64
62 45 Hammerson 60.52
63 141 Asda (UK) 60.50
64 - Pets at Home Group 60.40
65 - Aveva Group 60.21
66 69 Associated British Foods 60.14
67 73 GKN 60.08
68 26 Weir Group 59.96
69 48 IMI 59.94
70 - Bet365 59.81
71 114 Legal & General 59.78
72= 81 J Sainsbury 59.67
72= 98 Laing O'Rourke 59.67
74= 21 Shaftesbury 59.20
74= 146 Handelsbanken 59.20
76 159 Alent 59.14
77 59 IG Group 59.05
78 60 Dunelm 59.02
79 90 Banco Santander 58.88
80 - Workspace Group 58.70
81 36 Marks & Spencer 58.63
82 91 AZ Electronic Materials 58.60
83= 40 Majestic Wine 58.57
83= 163 Bodycote 58.57
85 47 Ryanair 58.55
86 112 SSE* 58.43
87 133 London Stock Exchange 58.36
88 136 Barratt Developments 58.23
89 - Willmott Dixon 58.20
90= 143 Halfords 58.00
90= 14 Experian Group 58.00
92= 93 Crest Nicholson Holdings 57.88
92= 100 National Grid 57.88
94 113 Lookers 57.80
95 130 Britvic 57.71
96 64 BT Group 57.62
97 126 Inchcape 57.50
98 129 National Express 57.20
99 119 Tate & Lyle 57.11
100 175 Dixons Retail** 57.02
101= 186 Henry Boot 57.00
101= 86 Vodafone 57.00
103 - Henderson Group 56.81
104 106l BTG 56.77
105 151 Marston's 56.71
106 160 Provident Financial 56.45
107 152 WPP 56.38
108 68 British Land Company 56.37
119 181 Standard Life 56.30
110= 105 Standard Chartered 56.23
110= 149 Synthomer 56.23
112 - TeleCity Group 56.17
113 43 Land Securities 56.15
114 52 Ultra Electronics 56.10
115 103 Sir Robert McAlpine 56.00
116 134 Drax Group 55.98
117 170 BAE Systems 55.90
118 135 Kingfisher 55.84
119 171 Pennon Group 55.75
120 209 Lidl (UK) 55.55
121 120 Reed Elsevier 55.51
122 157 Lloyds Banking Group 55.49
123 46 Tullow Oil 55.44
124 - AO World 55.36
125 138 Bellway 55.30
126 198 ITV 55.26
127 181 Amlin 55.20
128 96 Senior 55.15
129 140 Molson Coors Brewing Co (UK) 55.10
130 124 Redrow 55.07
131 193 Direct Line Group 55.00
132 165 Home Retail Group 54.93
133 211 Gondola Group 54.87
134 215 3i 54.80
135 157 Essentra 54.70
136 168 Daily Mail & General Trust 54.65
137 89 AG Barr 54.57
138 107 EE 54.55
139 88 Persimmon 54.50
140 145 Barclays 54.39
141 161 Poundland 54.33
142 18 Centrica 54.29
143 155 EDF Energy 54.25
144 104 888 Holdings 54.14
145 LondonMetric Property 54.01
146 195 Investec 54.00
147 166 Mitchells & Butlers 53.97
148 Playtech 53.92
149 184 Spirit Pub Company 53.85
150 206 Icap 53.81
151 - Sage Group 53.75
152= 126 Cobham 53.81
152= 131 Carlsberg (UK) 53.73
154 30 BG Group 53.64
155 228 BBC 53.64
156 141 Greencore Group 53.48
157 208 GDF Suez Energy UK* 53.25
158 162 Taylor Wimpey 53.05
159 83 Meggitt 52.93
160 125 Euromoney Institutional Investor 52.89
161 101 Pearson 52.64162
162 148 Severn Trent 52.63
163 109 BP 52.57
164 128 Segro 52.53
165 - De La Rue 52.50
166 219 Aviva 52.30
167 - Iglo Group 52.20
168 167 Hikma Pharmaceuticals 52.15
169 205 Arriva 52.08
170 189 Old Mutual 52.00
171 153 Pfizer (UK) 51.85
172 229 Rentokil Initial 51.57
173 200 Vesuvius 51.50
174 116 Talk Talk Telecom 51.38
175 199 Premier Oil 51.01
176 185 Anglo American 50.33
177 73 Glencore Xstrata 50.20
178 MJ Gleeson 50.17
179 147 Bovis Homes 50.04
180 NCC Group 49.80
181 191 Tesco 49.65
182 183 Miller Group 49.59
183 156 Ocado 49.56
184= 76 BHP Billiton 49.50
184= 95 Rio Tinto 49.50
186 213 Royal Bank of Scotland 49.50
187= Computacenter 49.00
187= - Fidessa 49.00
189= 176 Wilkinson 48.75
189= 187 Dairy Crest 48.75
191 78 Genus 48.73
192 - TSB 48.56
193 173 RSA Insurance 48.27
194 180 United Utilities 48.25
195 Bakkavor 48.17
196 Micro Focus International 47.98
197= 222 Rank Group 47.83
197= 169 QinetiQ Group 47.83
199 217 E.on UK 47.43
200 Flybe 47.30
201= 240 FirstGroup 47.10
201= 91 Ineos 47.10
203 216 G4S 46.88
204 62 Smith & Nephew 46.83
205 206 Informa 46.42
206 197 WH Smith 46.31
207 174 Telefónica (UK) 46.28
208 221 Carpetright 46.13
209 210 Fenner 46.04
210 190 Wm Morrison 46.00
211 193 C&C Group 45.89
212 224 Hill & Smith Holdings 45.76
213 213 Mothercare 45.75
214 172 Balfour Beatty 45.57
215 234 Iceland 45.50
216 243 Cable & Wireless Communications 45.37
217 Datatec 45.20
218 Stock Spirits 45.17
219 94 2 Sisters Food Group 44.97
220 101 Smiths Group 44.82
221= 241 Enterprise Inns 44.81
221= 201 UBM 44.81
223 238 Gala Coral 44.29
224 98 Ladbrokes 43.57
225 220 Intu Properties 43.09
226 188 Debenhams 42.96
227 236 Co-operative Group 42.65
228 232 Colt Group 42.40
229 Quindell 42.33
230 163 Serco Group 41.14
231 231 Bwin.Party Digital Entertainment 41.06
232 Afren 39.50
233 Betfred 39.10
234 233 Chemring Group 39.03
235 247 Bank of Ireland 38.53
236 246 Co-operative Bank 34.88

* Merged, acquired or changed name

**Research undertaken before merger into Dixons Carphone

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