The air conditioning and FM company wants customers to see it in a new light. As it grows, staff will change from passive engineers to active energy managers. Paul Braithwaite talks to chief executive officer Stuart Lawrie about his plans for the burgeoning business and how he intends to change people's perceptions.
Four Seasons Group is a venture-capital-backed building services group.

The group has successfully evolved from the acquisition of four owner-managed businesses into a national provider of installation and maintenance services focused on the HVAC market.

So what is the name of the next company to join the group? I asked.

Chief executive officer Stuart Lawrie, looks at me, smiles and says simply: 'Watch this space!'

Nevertheless, I have the impression another purchase is imminent.

Lawrie is a bank appointee. He first became aware of the Four Seasons Group when it consisted of:

· Four Seasons Control
· HM Air Cooling
· Air Conditioning & Associated Services.

The companies were based in Leeds, High Wycombe and Epsom.

'The initial plan was to merge these three together to form a national air conditioning business,' says Lawrie, 'but for a number of reasons it did not quite happen.'

This is when Lawrie joined the business - and he has put his money into the venture.

One year down the line, the three business units have been transformed into Four Seasons Installation and Four Seasons Maintenance. Within Four Seasons Installation, the group currently still uses the HMAC and JCW brand given their strong client recognition operating from six offices and serving clients in a consistent way from the M8 in Scotland down to the South coast.

'A year ago the group turned over between £12 million and £13 million and had 100 staff.

'It was swimming in the same pool as a number of regional air conditioning contractors.'

He adds it had a very strong retail and high street bank clientele - H&M, Waterstones, Boots, HMV, WH Smith, Nationwide Building Society, Ladbrookes, and William Hill, to name but a few.

All excellent clients, but Lawrie wants to broaden this portfolio away from the high street.

The latest deal, engineered by Lawrie, was to purchase south-west based JCW Air Conditioning, which gave the group a different skill set given in public sector and commercial HVAC markets which involve higher values and different skills set to deal with contractual risk.

Bigger projects

'The acquisition has allowed the group to take on bigger projects where we can comfortably deliver projects and maintenance contracts in the £250 K to £1.5 million tender bracket whereas previously the average tender was between £50 K to £0.5 million.'

Put this together with the rest of the group and there are effectively six offices housing client facing teams giving a good geographical spread across the south of the UK - Cardiff, Bristol, Royston, Epson, Plymouth and High Wycombe - with a Northern office in Leeds.

'This, to my mind, leaves a hole in the midlands and I have a desire to strengthen our maintenance delivery infrastructure in central London.'

Again, Lawrie just smiles.

This merger brings the number of staff to 200 with 122 field-based engineers.
Before the purchase of JCW, the split between install and maintenance was 75 per cent and 25 per cent.

'What JCW allows Four Seasons to do is to move those percentages to 60:40.'

Tony Barton, group business development director, explains how this will work.

'Take, for instance, the Ladbrookes contract which is run from the Leeds office.

'Previously, if there had been a fan failure in a split system in a betting shop in High Wycombe, a mobile unit would have been despatched from Leeds to fix it.

'Now, we can send an engineer from the depot in High Wycombe which saves time and money.'

It makes us more efficient. And this means there are maintenance men available to move the company into a new phase where they change from engineers to active energy managers. And this is where Barton comes in.

'Barton coming on-board in December puts us on the front foot with the clients when talking to them about solving their rising energy bills. Currently when a client has a problem, he phones up and our engineer turns up at the office, fixes the fan, compressor or whatever and disappears,' maintains Lawrie. 'But the group could offer much more,' he adds.

'Yes, we can design and build, install and maintain equipment but we can also support clients and reduce their energy bills across their estates.'

And it is also about changing the perception of Four Seasons in the eyes of the clients.

'It is about moving the perception of our clients from what we are now to where we want to be, a progressive company which can offer other services which will benefit our customers.'

The company's clients know what to expect. Barton adds that already the company has some 'cracking' relationships with clients.

'We have a long track record of good, repeat business,' says Barton. But, historically, it has been a case of installation, perhaps service and, maybe, some maintenance or perm any two from three.'

New business model

Now, customers are being made aware of the new business model and of the new energy management approach.

'For many businesses, reducing the cost of energy is a good start but reduced carbon emissions count towards compliance so it is a win-win situation,' says Barton.

Lawrie believes the country is not yet out of recession and there will not be a substantial turn-around until probably 2012.

'We are in a climate where cost is king. It is going to be a more demanding market for the next couple of years so Four Seasons has got to be a lot more savvy as to how we differentiate ourselves from our competitors.'

And Four Seasons will not achieve this by just being a me-too player in the marketplace. So how will Lawrie bring the companies together in terms of branding?

There is commonality already between the merged companies and this will be added to.

'However the livery on all the vans is blue and green.'

The brands all have value but over time the Four Seasons brand will become the more prominent. And the website will be corporate too.

So how many firms is the company thinking of buying?

'What we have is a very clearly defined plan.

'I am interested in businesses which give the group a technological edge or those which offer a geographical area which adds to our existing coverage and of course, businesses which have repeat revenues.'

He adds: 'And fortunately our backer Barclays Ventures is a captive fund, which allows it to take a longer-term view on returns, so as long as we continue to add value for the shareholders through our direction and performance, we will continue to invest in the right businesses.'

And, Lawrie adds, as he is a shareholder, 'our interests are absolutely aligned'.

Lawrie says the firms he targets include owner-managed ones where the owner feels he has taken the business as far as he can.

'It might be a case of the owner feeling that health and safety, HR or legislation in general is stopping him taking the business on and wants to share some of the burden with a larger organisation.'

No more niggles

The corporate structure which Four Seasons has developed will take these niggles away and will allow him to get back to running his company well. Not that the corporate structure is overblown and bureaucratic.

'When I have acquired firms in the past, I have wanted to create an atmosphere where the owners feel they have something more to contribute and can move their firm on and the corporate body to the next stage.'

Is there sometimes a clash when an owner becomes a shareholder manager?

'It is a case of dealing with each person individually. I have huge respect for these owners who have shouldered the responsibility of owning a successful firm for many years. Some are emotionally quite tired.

'I have retained all the individual owners except two.'

So at which point does Lawrie want to stop growing?

'I believe there are definitive cut-off points above which more or different levels of investment are required or you can lose some of the personal touch with clients. For us getting to £50 million annual revenues will probably be one such point. After that, it is about another level of investment: in IT, people and more. You will need another structure in place to take the company on to maybe £80 million or £100 million. Once this has been reached then a different funding structure is needed to take the firm another level of around £250 million.'

That said, Lawrie is confident his shareholders will back him to the hilt whatever the size of the company.

'We will take this company as far as we feel comfortable with it.

'We have a good business here with some very client-focused people, a management team to take the group forward and strong long term funding in place.'

I will be watching this space with interest as Lawrie turns this burgeoning company into a force to be reckoned with in the HVAC market.