Episode Transcript
Tim: Hello and welcome to London Stock Exchange’s latest edition of our Be Inspired series. In the series we speak to founders and CEOs of businesses that have listed on our markets. We ask them about how they came to be listed, how was the journey, and what does being listed mean to them. I’m Tim Davis from the London-based primary markets team, and today I’m joined by Nadeem Raza, who’s the chief executive of Nottingham-based Microlise Group PLC. Microlise floated on our A market in July 21. It raised 61.2 million of equity, giving a market capitalisation at IPO of 156.5 million. It also attained our Green Economy Mark ahead of IPO. Nadeem, welcome. Perhaps to start with, you could just tell us what Microlise does.
Nadeem: Firstly, thanks for having me on. So, Microlise is a company that has two types of customers. Firstly, we provide solutions to the transport industries. So, anybody who runs large fleets of trucks, for example, like Tesco, Asda, DHL, etc., we provide them with hardware and software that allows them to manage those fleets of vehicles, thousands of vehicles, trailers, people and so on. Our second type of customer is companies that actually make those trucks. So, companies like MAN Trucks from Germany, Tata Motors in India, and even people like JCB that make construction equipment all around the world.
Tim: So, why take it public?
Nadeem: We’ve grown by about 400% organically over the last ten years, and we felt that we could accelerate that growth significantly by doing acquisitions, and we felt that going through an IPO and being listed would be a great way of enabling us to raise that capital for that future growth in acquisitions.
Tim: And was it always part of the plan, an IPO?
Nadeem: No, an IPO wasn’t actually part of the plan. Originally, we were looking at really only two options. One was a trade sale, and the other option was to get VC backing. And somebody came along and said, have you thought about doing an IPO? And that was about, now, about three years ago, and we really didn’t know anything about how to do an IPO. So, we spent a year or so investigating it, working out exactly what was involved and so on, speaking to yourself, of course. And after a while we decided, actually, that was probably the best route for us, and so we embarked on that process of becoming a listed business.
Tim: Okay, so having done all that exploratory work and homework, if you like, how was the process itself, and what did you learn from it?
Nadeem: The process was pretty much as we expected. We’d already been warned about the challenges involved, and the amount of time it would take, and the amount of effort from different people from our finance department, as well as our legal and as our marketing department, etc. But I think the bit that surprised me was the amount of legal due diligence. The level of detail that we had to go into to verify and justify every single point on our presentation was beyond what I had expected. But other than that, it was a process pretty much as was described by our nomad and so on.
Tim: Then the obvious question is, how did the workload and the execution of the IPO differ from any other fundraising and deals that you’ve done?
Nadeem: The workload was different in the sense that it was a lot more detailed. We had a lot more people involved from our side of the business, but also a lot of third-party consultants as well. So, I guess it was probably two or three times more involved in terms of effort and time than other fundraising that we’d done previously.
Tim: You mentioned the time. In terms of the real work involved, how long did it take you to get it done?
Nadeem: So, we started in December, and we completed the following year in July. I must say we had an original plan of completing in May. So, we did overrun. Again, I wasn’t surprised at that. I kind of expected it to overrun by a little bit. But yes, roughly about six to seven months was the time frame that it took us.
Tim: And so, as you said before, Microlise is a high-growth business. It’s an international business. How did you manage both the business and the IPO project?
Nadeem: We knew that we couldn’t just do both as business as usual, and so we had to backfill certain resources, particularly from our finance team, to give them the bandwidth to be able to focus on the process. So, we did take on temporary resource in a number of different places to make sure we have the capacity to do the project.
Tim: Okay, but presumably, only one CEO overseeing both projects, if you like.
Nadeem: That’s absolutely true. But the key to being a CEO is having the right people and assembling the right team, not just internally, but also externally in terms of advisers and so on. We did a great job of that, and it was really down to both internal, external teams to make the project work.
Tim: So, talking of management and just looking down from a helicopter view of the business now, how has IPO facilitated changes in the management, the structure, how you run the business?
Nadeem: Of course we have some non-execs which we didn’t have before. But on top of that, we have taken much more rigorous process in terms of how we do PR and the way that we release information out because, obviously, we have to have a lot more governance in place to ensure that we comply with the stock market rules and regulations. So, beyond that nothing else has really changed. The business is operating pretty much in the same way as it has done before. Although, as I said, there is more governance around some processes and how we release information to the market.
Tim: And talking of non-executive directors, how have their roles changed post-IPO? So, they help in the broad sense to get the IPO done. What about post-IPO?
Nadeem: Prior to the IPO, two, three years ago, we didn’t have any non-execs. So, we knew that we needed some non-execs post-IPO, but we actually decided to bring them in in April. As I say, we decide to go down the IPO route in December. We brought non-execs in in April. We obviously completed in July. And we brought them in earlier so that, actually, they could provide us guidance throughout the IPO process, and they fulfil that role April to July. And then, obviously, post-July, they got stuck in in terms of challenging us as a board and helping us with key decisions throughout.
Tim: So, changing tack slightly. What about ESG? Because we mentioned that the company was the recipient of the Green Economy Mark ahead of IPO. What have you done or plan to do to evolve the ways in which the business functions against that ESG backdrop?
Nadeem: ESG has been important to us because one of the key things that we do is help our customers save fuel, and obviously that helps them reduce their emissions, particularly when you’re talking about large trucks operating throughout the UK and the level of volumes and so on that they emit. But ESG has become more and more relevant, particularly in our discussions with our investors. We’ve had a lot more questions, a lot more challenges about what we’re doing on that front from our investors. And we’ve now got someone on our operational board that’s dedicated to looking at ESG. And so we are formally now putting in plans, making sure that we can hit those plans and those targets, and we’re going to be publishing reports out to inform investors of our progress against those targets.
Tim: So, who inspires you personally and/or professionally, as an individual?
Nadeem: Lots of people inspire me. Of course I read the biographies for Steve Jobs, for Musk, but also there are other people like Nelson Mandela, etc., that you can take inspiration from. And I’m a big believer in quotes, because I think quotes embody certain nuggets of useful information. So, I’m always reading out quotes to all of our team, reminding them about certain things, etc. But there are lots of people that inspire me, and I really like to take particular points from all of their experiences and all their stories.
Tim: So, what’s crossing your mind at the moment? Or what quote is crossing your mind?
Nadeem: One that I often use with our team is no good deed goes unpunished, which is a reflection of saying that you might go off and try and do the right thing, but it also sometimes has some negative consequences, and you should be aware that no matter what it is that you do, with all the right intentions, there are sometimes some negative consequences that you have to be aware of and also mitigate against.
Tim: And what are your own big drivers? Because I’ve heard it said that being chief executive, especially of a fast-growing, quite large company, can be a lonely place at times. So, what pushes you on?
Nadeem: It is sometimes, but I’ve always reflected back over the last few years and said, what is it that makes me tick? And the bit that I’m always pulled towards is that I like solving problems. I’m a problem solver at heart, and I like challenges, and I like looking at things and trying to fix things and make things better. And in some ways, I think that is part of the role of a CEO. You have, in our case, 600 people. Lots of challenges every single day. And it’s about helping all of those people solve all of those problems, not just internally, but of course for our customers.
Tim: And is there one business mentor that you think of? In terms of all the stuff you’ve read and that you think about, does anyone stand out?
Nadeem: For me, one of the key things that I liked about Steve Jobs was his focus on simplicity, about how you make things simple, and how we as people continually make things complicated. And it’s an ongoing challenge to continuously look at things and look at the products that we develop and the solutions that we develop and really try and focus them down to being as simple as possible because it is easy to make things complicated. It’s actually really, really hard to make things simple.
Tim: Yes, indeed. So, Nadeem Raza, Chief Executive of Microlise Group PLC, thank you very much for sharing your thoughts with us today. If you’d like to watch more of our Be Inspired series, please go straight to the London Stock Exchange website, or alternatively lsegissuerservices.com/spark. Thanks for joining us.
