Story - On a Mission
With future financial incentives tied into the deal, what do you and Dave plan on doing in the long-term? Is there any possibility that you will both look to move on in the foreseeable future once targets are met?
I don’t have the answer to that (she laughs). I’m working towards that goal at the minute. I don’t know… I’ve been part of Story for five years and I don’t imagine that will change in the next three or four years anyway. I’m committed to being here longer term as are all of the senior team and we’ll see what that brings. It will probably bring exciting new opportunities within the Group.
I’m not going to retire yet!
Does this change your role at all?
No it doesn’t change my role. It means I get a boss, which I haven’t had for a while, but I can deal with that (she laughs, again). In terms of our development, it’s great because there are new skills in the group that I can learn from. The expertise of someone like Iain Ferguson [CEO of The Mission Group] – a senior figure within the industry, is crucial. Both our clients and I will be able to learn from the experience that he offers.
However, I’m sure the benefits are reciprocal – Dave has expertise that will be highly-regarded by other companies within the group.
We’re going to be putting in place a second tier management structure which will allow other members of the staff to play a bigger role in Story going forward.
We were approached by other people earlier in the year. However, we declined to go ahead, simply because it would have meant changing who we are. The Mission buy companies because of the way they look, for their culture and their people and they allow them to operate successfully. For us, that was a really attractive part of the deal.
How many times have you been approached with offers in the past?
In the last 12 months we’ve been approached twice seriously and prior to that we’ve been courted on a number of occasions. But we respect Iain (Ferguson) and we’ve known him a long time – since we were at One Agency and he was at KLP Euro RSCG. The way that the group is structured reflects our philosophy. Furthermore, there are some lovely brands within the group, which are being allowed to run autonomously and to continue what they do. Effectively they buy winning agencies and why would they want to start messing around with that? They have no desire to change us.
How long has this deal been in the pipeline?
This has been quite a quick deal actually. In total, it has taken about five months although it’s been slightly more frantic in the last three months. But we’ve all wanted it and we’ve fitted together very well, so, from that point of view, it was a deal that was waiting to be done
When do you expect to have the second tier senior management in place?
We’ve been looking out with this deal anyway at some really strong people in the agency and it’s helped give them a bigger opportunity. They’re all going to participate in it as a PLC, and they’ll have shares in the business. In fact, every single member employed will have shares in the company. There’s a real role for everyone to play in making this a success, so we’re looking at that and will certainly be acting upon it in the next month. We won’t be going anywhere, we’ll simply be giving other people the opportunity to step up to that tier to support us.
What does this development mean for staff at the agency?
It’s our fifth birthday this year and we’ve grown both in terms of size and turn over, we’ve also grown in expertise with specialist digital people as part of the team. We felt that now is the right time to be a part of something bigger that will allow us to grow by adding other areas of expertise to our client offering. The plans are to grow the business and bring in people to support that growth, but in terms of where we are now, everyone is still on board and it’s business as usual. We’ve got a winning team here, we wouldn’t want to change.
Will you now be looking to open new offices across the UK?
There are opportunities for us. The Mission is a regional-based group, which is attractive for us. I don’t think that London needs another full service agency, but there are certainly opportunities for us with a proposition from London and that’s something we’ll consider.
What will the pace of that growth be?
We are budgeting to bring on two members of staff before the end of this year and then another three members of staff next year. Our financial year now is December.
What has been the reaction from your own clients?
I have spoken to all of our clients and they are delighted for us as a team. They are reassured by the fact that it is business as usual but with the additional services which a bigger group will bring. Within that context they [our clients] are excited, but at the end of the day what they are happy about is that the team at Story will remain in place and will continue delivering the work we’ve been doing for them for the last five years.
Will this move act as a platform for new business?
For some clients, in terms of procurement being part of a bigger group – we’re now part of an £80million turnover group –will be appealing. It will maybe get us onto some pitch lists, which we might only have dreamed about in the past due to our size. It’ll also benefit us in that we’ve become a slightly more grown up company. We’re a PLC now and there are obligations which come with that which will manifest itself in the way we present the business.
But, essentially, we’ve got the added skills which will enhance the people who are here, it will help our specialist areas grow and if the clients want to avail themselves with those services in the group they will be able to. If they have existing relationships, then they still benefit from the offering that Story already provides.
Any personal extravagances since sealing the deal?
Do you know what? I banked the money and went back to work the very next day. My only extravagance will be that I can continue to shop in Waitrose, that’s my one luxury. I’ll probably have a nice holiday, as I broke my foot on holiday in Italy last year. I had a plastercast on while the deal was being done. So, I’ll have a holiday without any injuries hopefully.
AIM-listed The Mission is a national marketing communications and advertising group with ten offices across the UK. The group’s members already include April-Six, Bray Leino, Big Communications, Fuse Digital and thinkBDW, employing over 550 staff nationally. The Mission’s chief executive is Iain Ferguson.
The Mission has acquired the entire issued share capital of Story for an initial consideration of £6.9million consisting of initial cash/loan notes consideration of £4.1million and a further £2.8million through the issue of 2,060,485 new ordinary shares in The Mission issued at 134.675p per share. A further consideration of £0.1m cash and £0.1m shares is also payable if conditions are met for the end of the calendar year. A further payment of up to £6.4m is due in March 2011 subject to Story meeting its challenging performance criteria. The final payment is payable in cash or up to 50 percent in shares, at The Mission’s discretion. The total consideration is capped at £13.5million.
Story was established by Dave and Sue Mullen in 2002 and currently employs 30 staff. The full service direct response, digital and communications agency splits its business approximately 80 percent direct and digital marketing and 20 percent advertising. Story works with a number of high profile clients including Scottish & Newcastle (Kronenbourg), the Glenmorangie Company LVMH (Ardbeg), Ulster Bank ROI and NI, M&S Money and Scottish and Southern Energy. Story is based in Leith with a further office in Leeds. The agency’s audited accounts for the year 31 March 2007 recorded profit before tax of £0.6million on a turnover of £4.5million. Story had audited total net assets of £1.1million.