UK: Britain's most admired companies.

UK: Britain's most admired companies. - From water to television, who's doing well and why.

by
Last Updated: 31 Aug 2010

From water to television, who's doing well and why.

Top company profiles

ST IVES

Volatile paper prices and oversupply in European markets are the recurring complaints of the paper and printing sector, but they don't seem to be troubling St Ives. It finished top of its sector in five of the disciplines and in the year to end-July registered an increase in pre-tax profits of nearly 16%, well above City forecasts. The printer is a round-the-clock, fast turnaround operation serving a largely British market and enjoys long-term deals with a number of big-spending publishers. St Ives picked up top titles like Vogue and Top Gear when a rival closed its York plant and is the printer of self-assessment tax forms and vast amounts of junk mail. The company also commands 20% of the market for printing takeover or merger documents at short notice and expects to have made around £30 million this year from the flurry of takeover activity expected to dominate the City in the coming months. Chairman Miles Emley is a former dealmaker from the world of merchant banking but has surprised many with a competent and cautious management style. Perhaps he is too cautious - the only blot on the Emley copybook, according to his peers, is poor attention to innovation.

HAYS

Last year, Hays ran the 1994 overall winner of the Most Admired Companies survey, Rentokil Initial, a close second in the business services and distribution sector. This year, in spite of winning only two of the eight categories, Hays has pulled ahead of its rival and in so doing moved itself into 12th place in the overall rankings, from 31st place the previous year. For most people Hays means recruitment, but it is also strongly positioned in logistics and commercial services. Chief executive Ronnie Frost appears to be going against the grain in focusing on three businesses but the strategy seems to be working. Hays is one of the fastest growing companies in the FTSE 100. The secret of its success? Consistency across the board and, in particular, an admiration for its shrewd bolt-on acquisitions of distribution companies in continental Europe. Expect more buys. Hays spent £120 million in small acquisitions last year and wants to do the same again in the next 12 months.

ANGLIAN WATER

In a year in which water companies have come under the cosh from regulators and John Prescott, Anglian Water has held up well, according to those in the industry. Under the leadership of chief executive Alan Smith (above), it has moved from fourth position to number one in its sector. Behind Anglian's success, say its peers, is an impressive record of innovation.

For example, the firm announced radical plans to combat shortages through the use of floating 'reservoirs', enormous plastic bags containing millions of gallons of water from Scotland and Norway to provide back-up supplies during the expected water shortages next summer. Anglian has also been particularly skilful in wooing over a quarter of its customers into the use of meters. And shareholders have something to smile about too. Pre-tax profits for the half year to 30 September were up 6.8% to £141.7 million on turnover up by 2.9% to £425.1 million. The dividend was up by 12.7% to 11.5p

WASSALL

Wassall has moved from fourth to first position in our conglomerates survey, thanks in part to a well respected management. In less than 10 years in charge, chief executive Chris Miller and chairman David Roper have transformed a £2 millon business into one worth £525 million, not through asset-stripping but through putting capital into previously underinvested businesses and then watching the returns roll in. The company has won respect for its decision to repay £150 millon to shareholders alongside the demerger of its US copper wire business, General Cable, for £460 million and for its patience in waiting for the right acquisition to come along.

SMITHS INDUSTRIES

Smiths Industries has had another excellent 12 months, finishing first in the auto and aero engineering sector and fifth in the overall Most Admired Companies rankings. In its sector it was judged second best (to GKN) only in its ability to attract, develop and retain top talent. Smiths also earns the near-universal envy of its competitors over the quality of its top team. Chief executive Sir Roger Hurn (above) joined Smiths Industries nearly 40 years ago, working his way up to the top job by 1981. Since then he has transformed the company into one of Britain's leading engineering groups. The results are impressive: Smiths Industries saw a 16% rise in annual underlying pre-tax profits in the year to August to £192 million in spite of a £12 million hit on profits from the strength of sterling. Smiths is not ruling out acquisitions, one of which is believed to be the Ohmeda healthcare business from BOC.

Last year, Hurn split his role at Smiths and reduced his commitment to the company with the appointment of Keith Butler-Wheelhouse from Saab Automotive as chief executive. Hurn has not yet set a date for leaving Smiths but many think he will step down next year when he reaches 60.

By then, Butler-Wheelhouse could be ready to run the business with the help of a non-executive.

DEWHIRST GROUP

Dewhirst Group is Marks & Spencer's clothing and toiletries supplier and a market leader in the supply of corporate clothing to financial institutions like NatWest and Midland. Under the leadership of Timothy Dewhirst, great-grandson of founder Isaac, the Yorkshire-based company is the runaway favourite in the textiles sector in this year's survey, topping the poll in all eight performance categories. In particular, Dewhirst seems to have the right strategy of aggressive pricing and innovative products in new lines of non-iron menswear and a successful range of womenswear.

The company is expected to gain further market share at the expense of other M&S suppliers and the shareholders are more than happy. Dewhirst lifted its pre-tax profits by 27%, from £11 million to £14 millon in the half year to July, on a 20% increase in sales.

POWERGEN

PowerGen has had a good year. It has held onto the top slot in the electricity sector, scoring highly among its peers for the quality of its products, its value as a long-term investment and the quality of its marketing.

Executive chairman Ed Wallis (above) has led PowerGen since its privatisation in 1991 and has overseen its expansion in the face of competition from independent generators in Britain and the point-blank refusal of the last government to allow it to purchase a regional electricity company.

The coming year will be a key one, with the liberalisation of the domestic electricity market due in April. It will also be an interesting one for the management team at PowerGen, with Wallis due to become the next non-executive chairman of the car components group, Lucas Varity, in May 1998. Wallis has been keen to emphasis that he will continue in his present role at PowerGen but the appointment could mean that Deryk King, the managing director brought in from ICI last year, will probably take on more responsibility on a day-to-day basis.

LLOYDS TSB

Another fantastic year for Lloyds TSB. It has finished top of the banking sector by some margin over its nearest rival, HSBC. Indeed, Lloyds TSB comes out first in the overall survey in terms of its use of corporate assets. Industry rivals may well be jealous of the £1 billion in the company's acquisition war chest. But, while investors will be keen to see chairman Sir Brian Pitman use the money, they can also be reassured by his statement that he has no intention of moving into investment banking or securities, an area that has so troubled Barclays and NatWest. Lloyds TSB also ranks highly for its ability to deliver quality to the customer, winning the Most Improved category in this year's Management Today Service Excellence Awards.

BOOTS

Boots has moved to the top of the general retail sector with a near faultless performance. Doubts expressed in last year's survey about the qualities of chief executive Lord Blyth and his management team have disappeared. Blyth has demonstrated a sound use of corporate assets through the £175 millon takeover of Germany's Hermal skin care business, part of the company's aggressive global growth in over-the-counter medicines through Boots Healthcare International. He has also paid Alchemy Partners, a venture capital firm, nearly £9 million in cash and property to relieve the company of the problems of dealing with AG Stanley. The company also gets top marks for innovation by introducing a loyalty card containing a computer chip which could, in the longer term and subject to consumer sensitivities, hold medical details and data on health insurance. And in June the company returned £400 million to shareholders in the form of a special dividend.

BSKYB

This is BSkyB's first appearance in the Most Admired Companies survey and immediately it takes up first place in its sector ahead of Carlton Communications and the newly demerged EMI. Nevertheless the media giant hasn't had a great year. Sam Chisholm, chief executive for seven years, stepped down in November, and there are also signs that regulators in this country want to put BSkyB's television interests under a tighter leash. Pre-tax profits for the year to end-June were 22% up on a turnover increase of 26% but the outgoing chief executive has warned that profits are unlikely to be maintained next year.

GUINNESS/GRAND METROPOLITAN

The corporate fianceees are tying the knot at a good time. They sit first and second respectively in the drinks sector in terms of the admiring glances they get from their rivals. The only doubt seems to concern the quality of their management teams respectively led by Tony Greener at Guinness and George Bull at GrandMet. Even so, the £24 billion merger has been cleared by the European Commission subject to the sale of the Dewar's and Ainslie's whisky brands in Europe and the renegotiation of distribution agreements.

QUALITIES RANKING

Quality Of Management

1 Smiths Industries 8.86

2 Next 8.57

3 Rentokil Initial 8.50

4 Reuters 8.43

5 Marks & Spencer 8.38

6 Tesco 8.36

7 Dewhirst Group 8.29

8 BP 8.28

9 British Airways 8.26

10 Hays 8.25

Quality Of Marketing

1 Tesco 8.59

2 British Airways 8.54

3 BSkyB 8.38

4 Orange 8.33

5 Rentokil Initial 8.08

6 BT 8.07

7 Glaxo Wellcome 8.00

8 Emap 7.94

9 SmithKline Beecham 7.90

10 Safeway 7.86

Financial Soundness

1 Shell Transport & Trading 9.31

2 Associated British Foods 9.25

3 Marks & Spencer 9.02

4 Tomkins 8.90

5 Unilever 8.83

6 Reuters 8.71

7 BT 8.67

8 HSBC 8.62

9 Dewhirst Group 8.57

10 Halifax 8.55

Quality Of Goods And Services

1 Reuters 8.79

2 Marks & Spencer 8.33

3 BT 8.20

4 Cadbury Schweppes 8.17

5 Glaxo Wellcome 8.15

6 Smiths Industries 8.07

7 Dewhirst Group 8.00

8 Manchester United 8.00

9 Reed International 8.00

10 St Ives 8.00

Ability To Retain Top Talent

1 Tesco 8.23

2 Reuters 8.21

3 SmithKline Beecham 8.15

4 Unilever 8.09

5 BP 8.06

6 Mercury Asset Management 8.04

7 Schroders 8.04

8 Next 8.02

9 Glaxo Wellcome 8.00

10 Marks & Spencer 7.98

Value As Long-Term Investment

1 Reuters 8.57

2 Lloyds TSB 8.43

3 Shell Transport & Trading 8.42

4 Marks & Spencer 8.23

5 HSBC 8.22

6 Unilever 8.13

7 Wolseley 8.00

8 Hays 8.00

9 Smiths Industries 8.00

10 BP 7.97

Capacity To Innovate

1 Burford 8.50

2 Tesco 8.41

3 British Land 8.36

4 Emap 8.22

5 Reuters 8.21

6 Dewhirst Group 8.14

7 Glaxo Wellcome 7.95

8 Chelsfield 7.92

9 Orange 7.80

10 BSkyB 7.69

Community Responsibility

1 Body Shop 8.36

2 Unilever 7.27

3 Anglian Water 7.10

4 Glaxo Wellcome 7.05

5 Cadbury Schweppes 7.00

6 BT 6.93

7 BP 6.92

8 Tesco 6.91

9 Marks & Spencer 6.91

10 Hyder 6.89

Use Of Corporate Assets

1 Lloyds TSB 8.10

2 Rentokil Initial 7.81

3 Reuters 7.79

4 Chelsfield 7.73

5 BP 7.72

6 Hays 7.64

7 British Land 7.64

8 Next 7.59

9 Bunzl 7.50

10 Burford 7.45.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today