The Innes Book of Records
It is 3am and John Innes is sound asleep in his Glasgow bed after another hectic day.
His vibrating mobile phone wakes him and he clicks it on to read a text message from one of his sons, who is travelling in South America. ‘Hi Dad Guatemala isn’t really well set up for tourism. Hope all well.’ Thanks for keeping in touch, son, thinks John.
While he could have done without this morsel of information at this particular time, he is not unhappy – indeed he’s relieved to hear that his son is safe and that he is making the most of his experiences.
John Innes is chief executive officer of the Amor Group, one of Scotland’s fastest growing and determinedly ambitious technology businesses, a firm with offices in Aberdeen, Glasgow and Edinburgh, that is working furiously to scale up and employ more talented young people.
John, who hails from Bucksburn, on the outskirts of Aberdeen, where his father worked in the paper mill, places a great deal of store in young Scots – like his globe-trotting son – in finding the solutions to tomorrow’s problems.
He singles out the young Amor recruits who have recently come out of university and are bringing new skills and solutions as the glue that binds his business. “We hold them in such esteem that we crowd-source our technology strategy from them.
If I want to understand trends and what is going on next, we consult them and give them responsibility. It’s wonderful watching our younger folk taking things on.” An example is Neil Rogan, Amor’s chief technology officer, who, as a self-confessed twenty-something geek at heart, ‘eats, breathes and sleeps technology.’
“Our technology approach is built up from the bottom up, with the 21-year-olds who can contribute from the day they arrive. People such as Neil are simply brilliant. The average age in the business is 28 years old,” says John, who is in his 50s. The Amor Group is voracious for success.
In its recent results, the culmination of its first three-year plan, Amor posted revenues of £57.2m, with profits of £8.1m.
On his webcast, Innes says: “I’m pleased to report that 2012 represented another excellent year of progress.
It is a tremendous achievement against a backdrop that continues to be challenging.”
He makes a robust statement of intent. “Today, we are publicly committing, as a business, that by the end of 2016, our revenues will be £250m with profits of £40m. That’s quite an ambitious target.”
That’s an understatement. Scottish companies in the past making such predictions of hitting a quarter of a billion in revenues have been badly burned.
Who remembers Kymata, and its prediction of £1bn valuation for that opto-electronic company in 2001?
John Innes is unapologetic and clear in stating his case. “We are in the right places. We serve the energy, transport and public service sector. We provide business technology solutions.
Those sectors afford us tremendous growth potential, both on a national and international level. What do we do? We provide stuff that really matters to our customers, services and products that are non-discretionary, that are essential to run efficient airports, learning establishments and offshore oil and gas operations.”
Simply put, Amor’s services are not nice to have – they are must have.
The company’s clients include Skills Funding Agency, the Scottish Government and Office of Rail Regulation in the public sector; Dubai International, Manchester, Toronto Pearson airports and NATS in the transport sector; and Scottish Power, ASCO and Sparrows in the Energy Sector.
As John might say in his Doric accent, ‘a nae bad roster of clients’. “We’ve won contracts off the big boys, which includes our ‘purchase to pay’ contract with the Scottish Government. We won it 18 months ago against the incumbent who was Cap Gemini,” he nods with pride. Amor has also been winning key projects in the oil and gas sector against bigger more established players – and that’s where the opportunities lie.
“If you are going to ask me, what is the best information management product on the market? I’m not really interested. But if you ask, how do we run a more efficient and safer offshore platform, or a better educational service, or a more effective airport? Then that’s the kind of conversation we want to have.”
For Amor, the technology is a given. It’s making it work on time and within budget that matters more.
“For the Scottish Government contract, we didn’t want to provide them with a new procurement system. They had one that worked already – what they wanted to do was get more public sector buyers working electronically. It was getting people in the Outer Hebrides to throw away their pencils and start using the system.
It was an enrolment and process challenge rather than cutting new code.” For years, public sector procurement has been traumatised, says John, by over-charging, over-promising and under-delivery from large system integrators.
“We all know the quantum of public money that has been wasted. We’re seen as people who come in, charge a fair price – and get the job done.” John wants to share his ambition, extending into Scotland’s public services and he wants private sector people to stop knocking public servants.
“Our business is headquartered in Scotland and I pay my tax and National Insurance here the importance of this stuff.”
“In 2009, we were the best kept business secret in Scotland. I don’t think many people knew about our heritage. You can perhaps say our name emerged from a passionate love affair with a glamorous woman, but really it’s more prosaic. When we were doing the deal it was called Project Roma, and because it was a reverse takeover, well, we called the company Amor!”
Amor was created by a management buy-out, led by John; David Blyth, a Glaswegian charted accountant who has been in the tech industry for 20 years, and Scott Leiper, the chief operating officer, in May 2009. The deal was Business Insider Deal and Dealmakers MBO of the Year in 2010. Two businesses were bought out of Sword Group: one was Pragma, based in Aberdeen and well-known in the oil and gas sector, the other, Real Time Engineering, based in Pollokshields in Glasgow. An earlier deal to take-over the highly-rated Graham Technology led to Amor inheriting a wonderful Grade A-listed India Tyres building at Inchinnan at Paisley.
“I like the sector spread that we have: energy, transport and public sector. This is a nicely balanced portfolio. This is what attracted me and it ticks a lot of the investment boxes too.” Along with recruiting young technology blades, the Amor Group has also been investing heavily in sales people. “It was one of the first things we did.” Early in life, John was trained in sales in a high street employment agency, so he knows what to look for.
“I used to smile at myself in front of a mirror with a well-thumbed copy of the Yellow Pages, just making the cold calls. My attitude was ‘Never Say Die’ and that’s how I learned my trade. The guys that do most well in Amor are those who understand what their customers are trying to achieve.” The Innes viewpoint is that sales people must form a deep working relationship and become a part of a customer’s business. They should not be deflected by technology because that is what the technologists do, but they must understand how it applies to a customer. “It’s a seamless relationship. Sales people who think like that do well with us at Amor. I never see the cars of those guys in the car park because they are with their customers the majority of the time trying to solve the problems. They believe that sales is a contact sport.”
“We brought in a lot of big beasts and some of them turned out to be little beasties,“ he says with a Doric smile. “We’ve made the investment in sales people and processes at the time when most of our competitors were reining in.”
So in the teeth of the credit crunch, Amor was investing to become a bigger player. He is satisfied that Amor has created 400 knowledge worker jobs, with the majority in Scotland, 50 in England and 20 internationally. But more must follow. We wanted to get the message out that Amor was a strong, quality, headquartered Scottish business and we wanted to solve customers’ business problems.
So organically, we’ve doubled the business from 2009 through to 2012. Our simple plan is to double it again by 2016. The reason we think we can double it is that we have good markets and we sell stuff that customers need not just want. On top of this, if we re-finance this year we will be able to buy and build capacity, so we will be able to do the acquisition growth. It will be about getting more boots on the ground in United States and the Middle East.” His success rate in hiring sales people is 50-50. The ones who do most poorly coming from large organisations: typically from large systems integrators.
“I don’t read their CVs now. I used to and I was struck by how much they sold and how valuable the contracts were, but only to discover when I hired them that they were one of a team of 50 people, rather than the person who delivered the deal.”
Selling remains at the heart of John’s colourful career. After studying at Aberdeen University, he undertook a post-graduate diploma in personnel at Robert Gordon’s Institute of Technology. But as a singer and guitarist in a band called Dekka Danse the bright lights of London beckoned.
“We went to London in the back of a van in 1980. We got signed by Muff Winwood, brother of Steve Winwood, at CBS, and succumbed to becoming New Romantics when actually we were a wee punk band from Aberdeen. Muff told us to get our hair dyed and wear appalling clothes.
“It was very hard work and I did it purely for the money.”
Despite spending a packet in the recording studio and touring Europe and United States, the band never achieved the kind of acclaim achieved by Spandau Ballet, Human League and Kajagoogoo.
So John, under pressure to settle down, joined Playboy Casinos in London as a personnel manager which taught him how to deal with Bunny girls, over-excited punters and manage the cash. He was part of a management team that attempted a buyout of the casinos, but lost out when it was sold to Brent Walker. Now married, he returned to the Granite City as personnel officer of Aberdeen Journals, owners of The Press and Journal, where Michael Gove, the education minister was a young reporter. [“I think I gave him a job. We all make mistakes!”]
He joined the oil industry working with Seaforth Maritime, a well-established logistics firm, which was part of the booming North East industry.
They were bought by Brown & Root, and then Halliburton, which he says taught him some painful lessons about business culture and acquisitions.
The experience persuaded him to move into IT, so by 2001, he was working with Pragma Systems, an information services business, which grew from £600,000 to £7m in revenue before it was sold to the Sword Group in 2005. This was where John first gained an equity stake. He remained with Sword, completing ten international mergers and acquisitions in four years.
Then, with £27.8m of private of equity from Growth Capital Partners, the management team bought out the Sword Group’s UK business in a £30m transaction.
Growth Capital’s managing founder Bill Crossan, a former 3i and Close Brothers executive, and James Blake, a partner, were involved, while Scottish Enterprise has also taken a 5% stake.
“I’m conscious that I have taxpayers’ money in this business and they have been supportive from day one. Scottish Enterprise has been great and has helped us out when looking for talent, R&D grants and international development.”
Senior debt came from the Clydesdale Bank, support which was in place before the private equity money.
Amor has to keep moving upwards and has doubled in size since 2009.
“The private equity company retains its investment for between four and six years. When you are PE backed it is a hard pedal –you spend a lot of time serving debt. However, we are a very cash generative business with 97% of what we do turning into cash. The PE boys will tell you they are getting a good return. At some point we will want to scale the investor, so that we can go for growth. Our target is £250m with over 2,000 employees by 2016.”
While Amor needs this cash to fund its growth, John Innes believes this is an easier challenge to resolve as his management team enjoys a strong reputation among the Private equity community.
“We can get the capacity because there aren’t enough fantastic assets around. “The big one is finding the talent and finding enough people to run a business that is twice this size.
“That’s a tougher nut to crack. We need talent at the top – and I don’t know where they are. We need help from the government. “Where are all the leaders we need for tomorrow in this business?”
John Innes is clearly a charismatic leader who obviously loves a good laugh, but there is no doubt that serious expectation has been thrust on his shoulders.
“I’m enjoying building this business. I’ve watched people who’ve sold out when I’ve handed them a cheque and their reason for working is gone. For me, there is nothing quite like the buzz of building a business. I want Amor to be recognised across the UK as a brilliant success story.”
While this challenge is personally sustaining, you also feel he wants this for the next generation of young people who might well have been back-packing in Guatemala, returning to Scotland to find work, and following in his footsteps.
Published: 11 July 2013