The air inside the Kew Bridge Steam Museum in West London is decidedly chilly. It’s closed to visitors and the mighty steam engines that normally create such heat in the space are idle.
In a corner of the museum stands Terry List, the 65-year-old founder of the List Group, a £22m-turnover, multi-disciplinary, family-run engineering firm that’s grown 374 per cent during the past four years to make it the fastest-growing company on this year’s Hot 100 list. In a dapper three-piece suit that hangs a little on his small frame, and watched by his “number-one son” Dean (the managing director), List obliges the photographer shooting him for our cover. “I thought you’d picked the venue because of my background in engineering,” he says with a smile.
If only we’d been that canny.
But it’s not just the engineering link that makes the museum the perfect place for our Hot 100 photo shoot. There’s a nice symbolism in the quietened machines and the cool environs: it matches 2009’s economic situation. Oh, what a difference a year makes.
This fact isn’t lost on List. His company is made up of three divisions: design, technical documentation and recruitment. Each contributes about one-third to the group’s total revenue. Before the recession, recruitment was going great guns and is mainly responsible for the company’s extraordinary growth figures. But the bottom has dropped out of the market, prompting List Group to shed 100 of its staff, mainly those working in the steel and car industries.
“I feel like a bit of a phoney. Twelve months ago, everything was looking like it was going to carry on expanding. Now we’re hoping to maintain what we’ve got,” List says. “We may even be ten per cent down on sales but that shouldn’t affect the bottom line because we’ll make cost savings where we have to. When a recession starts to bite, it’s surprising what cost savings you can find.”
List may feel like a phoney but it’s clear he’s not. Inside this slight engineer beats the heart of a true entrepreneur. For example, he’s pragmatic about next year’s sales figures but remains positive overall, and still has one eye on growth. “We’re always looking for acquisitions and the chances are there’ll be some good deals out there,” List says. “It’s just a matter of finding the right ones.”
Acquisitions are what have made this company a powerhouse. List started the firm in 1971 in Lincolnshire when he decided he could make good money as a draughtsman working for himself. Business went well and during the following years, he hired a few staff, opened a few offices, got burned by the eighties’ recession and was forced to go back to the drawing board (no pun intended). Then came the turning point: in 1986, the List Group bought a larger competitor.
“We nearly went bust in the process because we didn’t have the finances to do it. That’s when I learnt about cash management,” List says. “But we survived that and then really started to expand because that got us into the oil and gas sector.” (Energy, oil and gas-focused clients now make up 90 per cent of revenues from the technical documentation and design divisions.)
It was to be the company’s first foray into diversification. Down the track, the List Group would move from design to recruitment and documentation. “When we decided to diversify, we’d saturated the market in what we specialised in – engineering design – and realised that the growth potential was limited. The obvious route to go into was technical recruitment. We had the engineers and designers on our staff, we could hire them out to clients,” List says.
“That became so successful that we decided to move into commercial and industrial recruitment. That strategy was so good, we then thought about the other businesses we could get into to grow the firm further.”
Since the first acquisition, the company’s balance sheet has been rock-solid. List notes: “We’ve always had cash reserves; that’s why we’ve been able to take businesses and turn them around quickly.”
Dean, who is sitting in on the interview, pipes up: “Terry’s background has always been in engineering but for the past 15 years he’s been an accountant, too, even though he’s not qualified. He gives the accountants a good run for their money.” The List Group tends to buy distressed businesses because, in the patriarch’s words, “you generally get a better deal for them”. Between 2003 and 2007, the company acquired four businesses and made a profit on most of them after the first year.
But the company doesn’t just buy any old firm. The Lists say they consider eight or nine businesses for every one they buy, and look for key attributes: location, financial strength, key personnel, turnover, turnaround potential and a good deal. The last acquisition was technical documentation company Attric in March 2007, which increased group turnover by 30 per cent. Dean adds wryly: “We were a good way down the path of acquiring another company but had to pull out because of the recession.”
List is dour in his assessment of the country’s economic prospects: “There are no signs of recovery yet and I can see it going another three years.” He doesn’t believe the government is doing enough to foster British industry during this time. He suggests corporation tax should be reduced for companies that take on apprentices: “That would be far better than the government taking corporation tax and squandering it on all these harebrained systems that they call apprenticeships.”
On a roll, he continues: “There are too many quangos that aren’t thought through. It’s all headline grabbing, isn’t it? They’re trying to keep their popularity up.
“I think if you completely rework the political system and put people in charge who really know their stuff – top business and financial people, although not bankers – then you’ll get somewhere. But instead you’ve got all these government departments with ministers in charge of subjects they’re not qualified in.”
List says he’s never considered a career in politics because he doesn’t like committees. “You can’t get a decision out of a committee, you’ve got to be autocratic and politics isn’t autocratic. I’d only be interested if I was in charge as a dictator,” he laughs.
His comment, however tongue-in-cheek, begs the question: does he rule with a rod of iron? List laughs again: “Not as much as I used to.” Dean adds: “He’s mellowed out in his old age. As we’ve expanded, it’s been harder for him to keep an eye on every single thing. When I started in the company as a tea boy, if you wanted a new pencil, you’d have to take your old pencil stub back to him before you could get another one out of the cupboard.” List interjects: “I used to count the paper clips!” “We still do,” Dean notes. “If any elastic bands or paper clips come through the post, we save them.”
List insists, though, that they’re “not as bad as we used to be”, partly because the size of the company has meant he’s had to delegate. “You’ve got to trust people to run the business,” he says. “In some of the acquisitions we’ve made, we’ve just left the previous management in charge and taken over the financials. We say ‘we’ll sort out the financials; you concentrate on the business’.”
Delegation and a changing of priorities have meant List has a better work/life balance these days. Two granddaughters (“one from each son”) and a legion of pets to look after mean he only goes into the office for one to two hours a day. “My working week is about ten hours, which is a bit more than Duncan Bannatyne. I was quite surprised by that,” he says, alluding to last month’s cover story. The List Group is very much a family affair. Dean, who is now 40, and his younger brother, Craig, joined the business from school. Craig is now finance director. List says the firm was designed as a family business: “I started out on my own and then the wife started to help on the paperwork side. My sons came in and started at the bottom.”
Dean interrupts: “Do you remember when I gave in my notice because I wanted to leave and work in a sports shop? You did your nut! You said: ‘I haven’t built this business for you to go off and do that’.” List laughs and shushes his son, gesturing at the dictaphone on the table. “They always say blood is thicker than water,” he says. “We’ve had ups and downs but we get on as a family and the business benefits from it.”
List isn’t one for projections because, as he says, nobody knows what the future holds. He is cutting costs but not aggressively. “You can prune your business until you’ve got nothing left but then you won’t be ready for the upturn,” he says. And it looks as if his firm will be back on track post recession. “In the motor industry, our main competitor has gone to the wall and one of our clients has told us we’ll be used as a sole supplier when things improve,” List reveals.
List embodies the fighting spirit that the nation’s entrepreneurs should be mustering right now. Ten quid says the List Group will be back on our Hot 100 list when the economy turns.
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