SPECulative Society of Edinburgh Member
Boardroom guru Grossart’s calling as ‘company doctor’
Hamish Grossart
Simon Bain
Share 0 comments 23 Oct 2010
Hamish Grossart is known for speaking his mind – though rarely in public.
He was the young Turk of Scottish finance in the 1980s when he sprang out from the shadow of his uncle Angus, with a cheeky raid on an investment trust to grab its market listing for his own financial boutique.
He sold that to Bank of Scotland for £95m after exponential growth in the 1990s, whilst emerging as a key boardroom presence in six Scottish companies.
All were to see explosions of value, including Cairn Energy where Grossart has just stepped down as deputy chairman after 16 years, start-up Indigovision which he still chairs, and fund group Artemis, where his £40,000 investment as a founding private shareholder earned him a £5m windfall last year.
Called south by his institutional backers to turn round the ailing Royal Doulton as non-executive chairman, Grossart was forced unexpectedly into a hands-on role after an accident to the chief executive, and led a gruelling six-year company operation which eventually achieved an acceptable sale.
Called recently to a more hands-on role domestically (he has four children and three new stepchildren) the investment banker turned boardroom guru, still only 53, is not winding down. “Watch this space,” he says. “I feel I’ve got one more big job in me.”
So how important was the family connection? “I left university, I had done a holiday job in Noble Grossart, they asked me to join them, I wasn’t sure what I wanted to do... but I seemed to be quite good at it, clients seemed to like what I said.”
He says his uncle’s bank is “an incredibly successful lifestyle business... that would not be my thing”, but acknowledges: “I got a great opportunity to train, a fantastic quality of work, and did stuff at a senior level at a very tender age – I was dead lucky.”
A year after being made a director at NG at 25, Grossart started what became EFT Group, and two years after that he joined the board of Radio Clyde led by the now Lord Gordon of Strathblane.
“I remember asking Jimmy Gordon why he had appointed me and he said we get lots of bankers and analysts, but you actually express a view, and you are firm about it,” Grossart recalls.
He adds: “When I was an MD from 1987 to 1992 I don’t think I was particularly good at it – but I think I am quite good at picking MDs, quite good at telling it like it is, and saying ‘this doesn’t make sense’.”
His baby EFT, which he converted from investment bank into asset finance specialist in 1992 and went non-executive, had shot from 40p to 180p when it was sold to Bank of Scotland, netting him around £1.5m.
“We gave up 10p to take shares in the bank,” he recalls. “We were on a PE of 21 and the bank was on nine, so it was a no-brainer. The shares promptly doubled, and looking back it was a stonking deal.”
He was parachuted in to turn round Scottish Highland Hotels in 1991, and though its £30m sale in 2000 was only 5p above the flotation price, the value-building had all been done at the beginning, Grossart says. “We restructured the business on a valuation of £1m.”
Grossart’s ‘company doctor’ status grew and his next rescue was Renfrewshire-based Eclipse Blinds, where the share price travelled from a 6p nadir to an eventual 90p, while at shell company Hicking Pentecost he helped assemble an unwanted threads businesses into a company, then sell it to Coats Viyella at a “substantial multiple”.
At Radio Clyde, Grossart helped broker the merger with Radio Forth in 1991 and rationalise the board.
He resigned, but after 18 months was asked to rejoin, and was still there as deputy chairman when Scottish Radio Holdings was sold in 2006 to Emap for £350m – or around 100 times the 1985 valuation of Clyde.
Meanwhile, Grossart was persuaded to join the tech revolution by agreeing to become chairman of video pioneer Indigovision when it was founded on a credit card by Oliver Vellacott in 1994.
“I broke all my normal rules,” Grossart says. “I don’t do start-ups, don’t do businesses where the chief exec owns more than half, don’t do technology because I don’t understand it.
“The reason I broke them was because of the quality of the guy, I think he is outstanding.”
The flotation in 2003 prompted a stampede for the shares.
“We had phone calls from institutions demanding to be on the chairman’s list of allocations, we did the first roadshow and all 12 institutions signed up which is unheard of, so we cancelled the 30 meetings we had planned.
“Instead of raising £12m we raised £30m, then the share price went to 600p. There was no reason for the share price to go up.”
Similarly, there was no reason for it to be crushed to 12p two years later as predators circled the group’s cash, the chairman says. “I think investors were hoist with their own petard.”
Now once more above its flotation value, the company has “immense potential for further growth”, he says.
So also, he adds, has British Polythene, Grossart’s latest deputy chairmanship, where his short tenure has already coincided with an accelerated restructuring and a cut in the dividend.
At Royal Doulton, Grossart was publicly attacked by the local Labour MP Paul Farrelly for presiding over a share collapse from 250p to 12p and closing all its 11 UK factories with the loss of 4000 jobs, whilst collecting a £127,000 salary for a one-day week. “I thought he was talking through a hole in his hat,” Grossart says.
The chairman received 99% shareholder backing for a 2002 rights issue which enabled Doulton to switch production to Indonesia and see off a £24m bid from major shareholder Waterford Wedgwood, which two years later paid £40m for the company – enabling Grossart to return home.
At Artemis, meanwhile, management has regained at a far lower price the stake it sold to ABN Amro at the top of the market for £317m.
Then there is £6bn Cairn, where founder Sir Bill Gammell brought Grossart on board in 1994 when its market value was some £10m.
Its success, he says, is down to more than geology. “Cairn has got stuff it does with its money, the management of its money, and its people, and you have got to get all the bits of it right.”
Grossart says Sir Bill believes non-executives come cheap. “Whether you hire politicians or bankers or industrialists, the fees you pay to these people are a fraction of what you would pay to an organisation providing the same type of advice such as McKinseys or Goldmans.”
On his private life, the subject of some intrusive publicity in the past two years, Grossart says: “I spend a fortune restoring Georgian buildings, for fun.....what interests me is my wife, who is an oasis of calm in my life, my children, and whether I can perfect the dish I am trying to create in the kitchen.”
To view the original of wee Hamish's self serving article by his friend
CLICK HERE
He has over 20 years' experience on public company boards, in a wide range of industries,
both in an executive and non-executive capacity, frequently with catastrophic consequences.
He has left: a long trail of broken lives, betrayed staff, colleagues and women,
who have suffered from his emotional inadequacies and lack of maturity.
A weak and bullying individual, who brings shame and unhappiness to his children,
and those who misguidedly cared for him, as he sets out to prove his worth to himself.
Always acting egocentrically at the expense of those he can bully, exploit and control.
An emotional Narcissist & a manipulative sociopath.
