News - Midlands
Out of the blue
The amazing thing about human beings is how predictable they are. You can work out fairly accurately the central block that makes up the lives of the majority of people. It's the bit around the edges that make us individuals."
As the UK boss of Experian Richard Fiddis has at his beckoning a slew of companies that can calculate, to a disturbing degree of accuracy, how likely you are to go bankrupt, be obese, what you read, where you shop, your chances of being burgled, flooded, burnt out, even what you'll call your children.
And this information is very, very valuable to a lot people - so much so that it enabled Experian to launch itself this month as that rarest of species, a Midlands FTSE Top 50 company.
Following its demerger from ARG - its sister at the old GUS and owner of the Argos and Homebase store chains - Experian now has a market capitalisation of £35.8bn, making it the Midlands' second biggest quoted company after neighbour Alliance Boots at £37.5bn. With some 3,000-odd staff scattered in offices across Nottingham, Experian is, arguably, the city's biggest private employer.
To most pundits Experian has grown big on credit checking - getting lenders to pool information on borrowers and using that data to calculate how much it is safe to sub you, a business which accounts for just over half of its UK income. Business services like insurance data, fraud checking, market research and showing where best to place a McDonalds restaurant, makes up another third.
Speaking as yet another report comes out claiming that Britons are Europe's biggest credit junkies, allegedly drowning in debt, Fiddis says: "True, there is a lot of bad publicity about buying on credit but how many of us would be prepared to wait until their 50s to have saved enough to buy their first house?
"Credit allows us to do today what we need to do today. Every business has to borrow to grow, and it's the same with consumers. People want both the information and the credit to manage their lives. Yes, people are borrowing and spending more, but that's largely a sign of growing confidence and affluence.
"People only borrow when they think they can pay it back. The vast majority of people intend to be responsible borrowers. Nine times out of ten things get out of control, not through negligence, but because of some major change in their life, like a death, a break-up, redundancy or a new child.
"We collate vast amounts of credit information that's used by lenders, but increasingly our information can be used to help consumers make decisions. If we're about anything our business is about taking the risk out of decision making."
And in that last paragraph you have the basis of much of how Experian looks to grow. For years the group has been the creature of businesses whose data it holds and interprets. Now much of its emphasis is on wooing the customer.
Late last year the group paid a whopping £3275m for Pricegrabber.com, which allows consumers to compare product prices, to sit alongside other does-what-it-says-on-the-tin online services like lowermybills.com and consumerinfo.com.
The consumer arm of Experian now accounts for about 12 per cent of worldwide turnover, although it hopes to emulate the 25 per cent that it contributes in the States.
Fiddis argues that, rather than keep consumers in the dark and at an arm's length, it wants people to use Experian to check their credit CVs, compare prices, assure themselves that the car they are looking to buy isn't a ringer, even size up the pros and cons of college courses.
He adds: "Consumers want to know more about what information is held about them on their credit CVs and use it to make informed decisions. The consumer education element is very important - we actively encourage them to check their records for accuracy.
"It's over the last four years that we've already developed our consumer side. Back then if you'd called us a purely business-to-business provider I couldn't have disagreed. We're well known to the credit suppliers but, increasingly, over time, we'll have to build up our branding among consumers."
At the start of our conversation Fiddis comes over as someone who is slightly unsure about meeting a journalist, but displaying exemplary charm and manners. He is also rather self-effacing - it took quite a bit of pushing to get him to open up about his background, but when he did I ended up feeling a bit, well, thick by comparison.
Originally from Stratford-upon-Avon Fiddis worked as a metallurgist in the South African gold fields before studying for a PhD. He then worked for IBM for 14 years, running its operation in the northern half of Britain from Warwick in the days, in his own words, "when no one was ever sacked from IBM. It then hit problems and I had to sack them." He went on to become group managing director of management and IT consultancy Lorien; and then ran a joint venture software business with IBM.
Fiddis joined Experian in 1999 which, he admits, he had never heard of before making the first trip to Nottingham.
But he wanted to be part of a plc that was going places: "It wasn't just the potential growth. It was the fact that I could see that I could add value.
I could see so many opportunities to take it forward."
It's clear that the Experian experience entered Fiddis' heart fairly quickly.
It is evident not only that he devotes an inordinate part of an afternoon to this humble hack's questions, but in the way he can barely wait to show off Experian's big, blue, iconic, award-winning office building on the outskirts of Nottingham.
It's easy to see Experian should evoke such pride. The company should be an inspiration to all those heroes of capitalism who toil unsung in obscure back office functions believing that, someday, their day too will come.
Experian was born out of the decidedly unsexy consumer credit business of Manchester's Great Universal Stores, whose telephone directory-thick catalogues were once a staple of most homes.
GUS realised that, used in slightly novel ways, the oceans of consumer data held in Nottingham was actually rather valuable. It convinced lenders to put aside their natural mutual mistrust and to start pooling credit information as a way of reducing risk and, through a mixture of growth and aggressive acquisitions, the backroom boys and girls at Experian built a business that rivalled the original retail arm.
Investor demand in the float was unsurprisingly strong. The business came to market at 566p a share, equating to a market cap of £35.8bn.
The company really took off when GUS sanctioned an acquisition policy in the US, a policy which has now led to Experian becoming an Anglo-American business: the Americas provide 58 per cent of revenue; it flies both the Union Jack and Stars and Stripes outside its Nottingham offices, and quotes its annual figures in US dollars.
Fiddis says: "Really you can trace the process back about ten years to when GUS acquired Argos, and began to gradually move away from its traditional catalogue business. Two years ago it de-merged from Burberry, which it had developed from a quite modest position, to an incredibly successful brand. But when that went it meant that GUS was no longer a conglomerate but a two-sided business, and it was unclear whether we were a credit control business with a retail arm, or vice versa. The pressure was on to split."
If Fiddis comes across as a mite impatient in his aspirations of Experian, then it is an attitude stitched into the fabric of the company.
Experian is too impatient to wait for organic growth and has become very, very acquisitive, having made 80 company purchases worldwide in the past five years and spending about £3300m a year snapping up targets.
Indeed acquisitions accounted for just under two thirds of its 27 per cent revenue growth last year to £31.62bn.
Fiddis says: "We could not have made progress into the consumer field unless we had been prepared to make some major acquisitions like Pricegrabber. Similarly there are opportunities that we'd have been fools to let go because they fitted our business models so well, like FootFall in Solihull which measures where and how many people shop. It lets people like McDonalds and Argos choose exactly where they should be setting up their businesses with a really high degree of accuracy.
"However we're not just buying growth, rather we're looking for potential. We must reject nine out of ten potential targets. We don't have a centralised acquisitions department. Each division manager has to make the case for an acquisition and be responsible for its performance - it makes people think a little more responsibly before saying yes."
The acquisition of FootFall, bought for £314m earlier this year, is a good example of the second leg of Experian's growth strategy- offering more services to existing clients. FootFall sits nicely along offerings like Experian's market analysis arm Clarityblue and its permission-based marketing business Cheetahmail.
It seems to be a strategy that works as only one in ten of Experian's business customers take one service; most go for three or four.
The third part of the growth plan is geographic expansion: "Growing the pink bits on the pie chart". Some 83 per cent of Experian's income comes from the UK and US. Understandably it is keen
to develop the other parts, such as in Eastern Europe and Asia Pacific.
Fortunately for Experian, this opportunity comes as its main rivals, all based in the US, seem to be retrenching back to their homeland.
Fiddis says: "The US companies have found the rest of the world hard going. There does seem to be a tendency for American firms to treat the rest of the world as though it was an extension
of the US: "it worked in Little Rock, Arkansas, it'll work in Paris' and not really getting attuned to local sensibilities. For example the French are not great users of cards. They still prefer to make their transactions by cheques, so we've had to adapt our model to fit them.
"Similarly many nations, like Russia, simply don't have a history of financial institutions sharing data. So it's been an issue of us getting them to trust each other and, in some countries, actually helping government set up the legislative frameworks that make this possible."
And, leaning against a wall in Experian's new offices, bathed in the company's corporate blue that pours
in through the coloured glass walls, he adds: "It's like we've been sitting on the runway for 20 years, gradually building up speed with the propellers and suddenly - we're up and off."
As the UK boss of Experian Richard Fiddis has at his beckoning a slew of companies that can calculate, to a disturbing degree of accuracy, how likely you are to go bankrupt, be obese, what you read, where you shop, your chances of being burgled, flooded, burnt out, even what you'll call your children.
And this information is very, very valuable to a lot people - so much so that it enabled Experian to launch itself this month as that rarest of species, a Midlands FTSE Top 50 company.
Following its demerger from ARG - its sister at the old GUS and owner of the Argos and Homebase store chains - Experian now has a market capitalisation of £35.8bn, making it the Midlands' second biggest quoted company after neighbour Alliance Boots at £37.5bn. With some 3,000-odd staff scattered in offices across Nottingham, Experian is, arguably, the city's biggest private employer.
To most pundits Experian has grown big on credit checking - getting lenders to pool information on borrowers and using that data to calculate how much it is safe to sub you, a business which accounts for just over half of its UK income. Business services like insurance data, fraud checking, market research and showing where best to place a McDonalds restaurant, makes up another third.
Speaking as yet another report comes out claiming that Britons are Europe's biggest credit junkies, allegedly drowning in debt, Fiddis says: "True, there is a lot of bad publicity about buying on credit but how many of us would be prepared to wait until their 50s to have saved enough to buy their first house?
"Credit allows us to do today what we need to do today. Every business has to borrow to grow, and it's the same with consumers. People want both the information and the credit to manage their lives. Yes, people are borrowing and spending more, but that's largely a sign of growing confidence and affluence.
"People only borrow when they think they can pay it back. The vast majority of people intend to be responsible borrowers. Nine times out of ten things get out of control, not through negligence, but because of some major change in their life, like a death, a break-up, redundancy or a new child.
"We collate vast amounts of credit information that's used by lenders, but increasingly our information can be used to help consumers make decisions. If we're about anything our business is about taking the risk out of decision making."
And in that last paragraph you have the basis of much of how Experian looks to grow. For years the group has been the creature of businesses whose data it holds and interprets. Now much of its emphasis is on wooing the customer.
Late last year the group paid a whopping £3275m for Pricegrabber.com, which allows consumers to compare product prices, to sit alongside other does-what-it-says-on-the-tin online services like lowermybills.com and consumerinfo.com.
The consumer arm of Experian now accounts for about 12 per cent of worldwide turnover, although it hopes to emulate the 25 per cent that it contributes in the States.
Fiddis argues that, rather than keep consumers in the dark and at an arm's length, it wants people to use Experian to check their credit CVs, compare prices, assure themselves that the car they are looking to buy isn't a ringer, even size up the pros and cons of college courses.
He adds: "Consumers want to know more about what information is held about them on their credit CVs and use it to make informed decisions. The consumer education element is very important - we actively encourage them to check their records for accuracy.
"It's over the last four years that we've already developed our consumer side. Back then if you'd called us a purely business-to-business provider I couldn't have disagreed. We're well known to the credit suppliers but, increasingly, over time, we'll have to build up our branding among consumers."
At the start of our conversation Fiddis comes over as someone who is slightly unsure about meeting a journalist, but displaying exemplary charm and manners. He is also rather self-effacing - it took quite a bit of pushing to get him to open up about his background, but when he did I ended up feeling a bit, well, thick by comparison.
Originally from Stratford-upon-Avon Fiddis worked as a metallurgist in the South African gold fields before studying for a PhD. He then worked for IBM for 14 years, running its operation in the northern half of Britain from Warwick in the days, in his own words, "when no one was ever sacked from IBM. It then hit problems and I had to sack them." He went on to become group managing director of management and IT consultancy Lorien; and then ran a joint venture software business with IBM.
Fiddis joined Experian in 1999 which, he admits, he had never heard of before making the first trip to Nottingham.
But he wanted to be part of a plc that was going places: "It wasn't just the potential growth. It was the fact that I could see that I could add value.
I could see so many opportunities to take it forward."
It's clear that the Experian experience entered Fiddis' heart fairly quickly.
It is evident not only that he devotes an inordinate part of an afternoon to this humble hack's questions, but in the way he can barely wait to show off Experian's big, blue, iconic, award-winning office building on the outskirts of Nottingham.
It's easy to see Experian should evoke such pride. The company should be an inspiration to all those heroes of capitalism who toil unsung in obscure back office functions believing that, someday, their day too will come.
Experian was born out of the decidedly unsexy consumer credit business of Manchester's Great Universal Stores, whose telephone directory-thick catalogues were once a staple of most homes.
GUS realised that, used in slightly novel ways, the oceans of consumer data held in Nottingham was actually rather valuable. It convinced lenders to put aside their natural mutual mistrust and to start pooling credit information as a way of reducing risk and, through a mixture of growth and aggressive acquisitions, the backroom boys and girls at Experian built a business that rivalled the original retail arm.
Investor demand in the float was unsurprisingly strong. The business came to market at 566p a share, equating to a market cap of £35.8bn.
The company really took off when GUS sanctioned an acquisition policy in the US, a policy which has now led to Experian becoming an Anglo-American business: the Americas provide 58 per cent of revenue; it flies both the Union Jack and Stars and Stripes outside its Nottingham offices, and quotes its annual figures in US dollars.
Fiddis says: "Really you can trace the process back about ten years to when GUS acquired Argos, and began to gradually move away from its traditional catalogue business. Two years ago it de-merged from Burberry, which it had developed from a quite modest position, to an incredibly successful brand. But when that went it meant that GUS was no longer a conglomerate but a two-sided business, and it was unclear whether we were a credit control business with a retail arm, or vice versa. The pressure was on to split."
If Fiddis comes across as a mite impatient in his aspirations of Experian, then it is an attitude stitched into the fabric of the company.
Experian is too impatient to wait for organic growth and has become very, very acquisitive, having made 80 company purchases worldwide in the past five years and spending about £3300m a year snapping up targets.
Indeed acquisitions accounted for just under two thirds of its 27 per cent revenue growth last year to £31.62bn.
Fiddis says: "We could not have made progress into the consumer field unless we had been prepared to make some major acquisitions like Pricegrabber. Similarly there are opportunities that we'd have been fools to let go because they fitted our business models so well, like FootFall in Solihull which measures where and how many people shop. It lets people like McDonalds and Argos choose exactly where they should be setting up their businesses with a really high degree of accuracy.
"However we're not just buying growth, rather we're looking for potential. We must reject nine out of ten potential targets. We don't have a centralised acquisitions department. Each division manager has to make the case for an acquisition and be responsible for its performance - it makes people think a little more responsibly before saying yes."
The acquisition of FootFall, bought for £314m earlier this year, is a good example of the second leg of Experian's growth strategy- offering more services to existing clients. FootFall sits nicely along offerings like Experian's market analysis arm Clarityblue and its permission-based marketing business Cheetahmail.
It seems to be a strategy that works as only one in ten of Experian's business customers take one service; most go for three or four.
The third part of the growth plan is geographic expansion: "Growing the pink bits on the pie chart". Some 83 per cent of Experian's income comes from the UK and US. Understandably it is keen
to develop the other parts, such as in Eastern Europe and Asia Pacific.
Fortunately for Experian, this opportunity comes as its main rivals, all based in the US, seem to be retrenching back to their homeland.
Fiddis says: "The US companies have found the rest of the world hard going. There does seem to be a tendency for American firms to treat the rest of the world as though it was an extension
of the US: "it worked in Little Rock, Arkansas, it'll work in Paris' and not really getting attuned to local sensibilities. For example the French are not great users of cards. They still prefer to make their transactions by cheques, so we've had to adapt our model to fit them.
"Similarly many nations, like Russia, simply don't have a history of financial institutions sharing data. So it's been an issue of us getting them to trust each other and, in some countries, actually helping government set up the legislative frameworks that make this possible."
And, leaning against a wall in Experian's new offices, bathed in the company's corporate blue that pours
in through the coloured glass walls, he adds: "It's like we've been sitting on the runway for 20 years, gradually building up speed with the propellers and suddenly - we're up and off."