Swag Mukerji confesses that he gets bored very easily. But as CFO of publishing group Centaur Media, the challenge of turning around the business-to-business publisher proved irresistible.
Having carved out a career as a CEO and CFO across a variety of sectors, Mukerji responded in July 2016 to a request to fix an accounting problem that had resulted in a sharp fall in cash at the publisher of industry bibles The Lawyer and Marketing Week.
He soon built up a strong working relationship with CEO Andria Vidler who was on the path to turning around the listed group. “Andria told a very compelling story so I joined for three months, and we solved the problem. Then she asked me if I wanted to become the CFO.”
What made you stay? “The initial project was really to get the grey matter ticking over, but as I got to work with the guys here, the transformational journey proved to be absolutely fascinating,” he says.
Rebuilding the house
The pair set to work revitalising some of the UK’s best known business-to-business (B2B) brands, that had previously featured a traditional model of advertising and editorial. “The transformation that she started four years ago was about how do we build a business that has got much more sustainable revenue streams and therefore sustainable profitability, that is much more relevant and has a much more direct connection with our customers,” says Mukerji.
“Our traditional legacy business was the customer is the person paying for the advertising, not necessarily the person reading your magazine. But actually you have much more control over what you’re doing if you deal directly with the person reading your magazine,” he suggests.
After years of high margin but increasingly volatile business, annual revenues had slipped to £53m by 2014. With Mukerji on board, the group went for a dramatic change of direction- offloading its business to consumer (B2C) business, and acquiring B2B telemarketing agency MarketMakers- the first time a significant disposal and acquisition were jointly undertaken by a UK company, says Mukerji. For 2017, full year profit of £22m came from revenues of £65m.
Another critical element was development of premium digital content, “what we classify as content people pay for directly rather than being subsidised or funded by advertising,” he says. With an exhibition arm that is performing well, the group is nearly three quarters of the way to delivering its transformation by a 2020 deadline.
To play a crucial role in the transformation, Mukerji has drawn on his wide set of entrepreneurial skills honed in the FMCG world. “I could be classified as either a very numerate CEO or a very commercial CFO, the role I prefer is the latter.”
Working either as CEO or CFO of drinks companies like Grand Metropolitan and Guinness he says the common theme “was that if there was something that needed to be done, I found myself attracted to it,” he says.
At United Biscuits he was responsible for crunching together the KP and the Mcvities sales forces, of 400 people each, to achieve a more coherent strategy before joining the Virgin empire. “Virgin drinks was on the rocks, and so Richard Branson asked me to sort it out,” he reveals. “I launched 13 new products, to broaden the breadth, and used my contacts to take the range into retailers Bookers, Palmer & Harvey, and the Co-Op,” says Mukerji.
His diverse career continued with his first board level CFO role, heading finance at FTSE 250 listed medical technology provider Biocompatibles International before becoming CFO of three private-equity backed entities. The most recent was at the UK arm of the Warburg Pincus-backed industrial cleaning and recycling group Safety-Kleen.
Appetite for risk
When he arrived at Centaur, Mukerji says he was a natural fit to work with Andria Vidler because “having been in her position, I have a lot of empathy and sympathy for risk-taking, and I would say because I’m a finance person I take controlled risks.
“Some CFOs would take the position of let’s minimise risk as much as possible, and as a consequence don’t necessarily move the business forward. But you have to take some risk,” he says.
Building on his experience of working with private equity firms he was able to take an unemotional approach to restructuring Centaur’s assets. “Nobody knows what will happen in the economy in the next few years, but it’s generally viewed that B2C will suffer more than B2B, where relationships are more sustainable,” says Mukerji, “a lifelong rugby player who watches lots of football”.
He’s also a strong advocate of keeping things simple- something the market can appreciate. The move to redefine products, such as turning industry bible The Lawyer into intelligence-heavy website thelawyer.com has resulted in the delivery of more predictable reoccurring revenues.
This finessing of the products followed the initial fixing of the finance system “that hadn’t been put it in properly so stopped collecting cash because customers weren’t being invoiced.
“It was about getting processes right- defining orders taken by the sales teams through to the credit control team. Debtor days that peaked at 123 are now below 50,” he declares. “We also won’t take any payment under £500 unless it’s on credit card, because it’s just not worth the process of invoicing.”
Mukerji has also stripped back finance into a leaner, more productive function. “We’ve taken a third of people out of finance. But if you speak to my customers- the internal users of finance- the quality has gone up,” he asserts.
Another aspect of simplification was moving the business into one office, off London’s Oxford Street, whereas previously it has been strung out across several sites in Soho, a one-time publishing hub where property values are now at a premium.
Mukerji’s working relationship with CEO Adria Vidler is well-defined, ensuring there’s no confusion over roles. “I think we overlap but we don’t step on each other’s toes. We don’t argue about car parking spaces.
“We’re very different in physical stature, in how we think and talk, in our educational backgrounds, so we both had to work quite hard to build this relationship, but it’s now really strong,” he says.
Mukerji says that because he was able to fix the finance system relatively painlessly, he was able to build trust with Vidler early on. He says that the relationship was further enhanced when the two pulled off the two deals last year.
“When you work on a transaction you work very intensely with people, and so you build long lasting relationships. I’ve done 42 transactions and I’ve got close friends going back 20-25 years, purely because we were in the lawyers’ offices at 3 o’clock in the morning. It just builds that bond,” he says.
Media hat on
When it comes to working in the media sector, Mukerji says he has learnt a lot. “This sector is not brilliant at process- part of that is around entrepreneurship and creativity. The suggestion is, if we’re all going to be creative and entrepreneurial, why do we need process?” he says. “But every business needs a defined set of processes.
“Another learning is around pace of operation, which I suspect is a legacy of selling advertising space. If you were selling space for a Saturday publication and hadn’t sold an ad by Thursday you’d lost the revenue forever. So there was some immediacy,” he says.
Another challenge is high staff turnover, says Mukerji. “Being off Oxford Street means you attract some really interesting people into the business, but the creative teams experience almost continual churn after meeting peers from other businesses in the bars and clubs around here. We have a lot of millennials in this business and they don’t think as long term as maybe we did when we were younger,” he reflects.