Mergers And Acquisitions » Warehouse REIT CFO on finance leader as dealmaker

Making the right decisions, be it in the corporate environment or in terms of career development, can often result from positive experiences early on in careers.

For Peter Greenslade, CFO of Warehouse REIT, early chances to take on responsibility, have imbued him with an appetite for new challenges.

In Warehouse REIT, a listed real estate investment trust which specialises in the smaller end of the industry spectrum- mainly warehouses under 100,000 square feet (sq ft) – the move to join the fledgling group five years ago is paying off.

The firm’s model has been performing well since it listed three years ago, with the share price regaining from the immediate pandemic impact in March to give a market cap of around £260m by mid-June, but the coronavirus pandemic, if anything, has elevated the need for warehousing as online retail has grown incrementally during the lockdown.

Indeed, such is the opportunity in the sector that the REIT has recently announced plans to further invest in last mile warehouses. At mid-June the company said strong demand had led it to increase its firm placing from up to £75m to approximately £100m while seeking to raise up to a further £100m.

To underline the point, Greenslade says that every increase of £1bn in online sales requires an extra 1m sq ft of warehouse space to be built. “There simply isn’t enough of it,” he says.

That was reflected in full year results in which operating profit before gains on investment properties rose from £13m to £21.1m and revenue over the period increased from £22m to £30.1m. The portfolio valuation went from £307.4m to £450.5m in that time.

Greenslade says the group’s 560 clients ranging from Amazon to small businesses across 94 sites, have been consistently good tenants, with a 94 percent payment rate since the outbreak of the pandemic, with some tenants such as two suppliers of cleaning products, demanding more space to meet demand.

Many use the smaller warehouse sites, compared to the 1,000,000 sq ft giant sites, as the ‘last mile’ in their distribution networks, but the REIT also has tenants such as the largest wine warehouse in the country- owned by online wine retailer Laithwaites. Three quarters of the group’s sites are multi-let warehouses, with an average unit size of sq ft 5,000-10,000,

These smaller sites, which are the end of the distribution spokes, are critical for supplying into urban environments, says Greenslade. “The majority of new builds are huge sheds. But some businesses require smaller units. We’ve got three Amazon warehouses and they’re at the smaller end, where it’s all hand picking,” he says.

It was seeing the opportunity that exists with smaller warehouses in the UK that spurred Greenslade to work with the group’s founders, initially helping to build the seed portfolio and then on to an IPO. In the event the listing took 18 months to deliver, but by this time he and they had gelled into an effective team, he says. “It felt good in terms of the culture,” he says.

Greenslade says that although the group has performed positively since the outbreak of the coronavirus, it still has to be wary of some clients being heavily impacted. “It would be a lie to say we don’t have a tail of tenants that have had problems.,” he says. “Some tenants have negotiated alternative payment arrangements where necessary, such as paying monthly rather than quarterly in advance, but very few have blanked on us,” he adds.

Career building

Greenslade started out with accountants Binder Hamlyn, which evolved into BDO, staying on an extra year than he intended because the audit of media giant Reuters he worked on turned into a flotation, his first experience of many corporate finance deals over his career.

The experience convinced him his future was in the corporate world. Greenslade joined drinks to hospitality group Grand Metropolitan (GrandMet) that is now part of drinks giant Diageo, as a financial accountant. “The great thing about GrandMet is that you were in a role probably no more than a year, and if you had ability, they moved you on- so you got a lot of experience.

“I had a role there that was transformational in that the corporate head office of the group had three financial PAs, and I managed to get one of those roles. Whenever a briefing paper was required, often sitting in meetings with the CEO and NEDs like John Harvey Jones, for a 20-something year old it was quite something,” he says.

In the group’s retail division, Greenslade took on the first of many finance director roles, of two restaurants chains. “I got a great breadth of knowledge, being promoted out of my comfort zone which is always a good challenge. But the one downside was that you never owned your history. They moved you so quickly that you could never look back and say three years ago we did this, and that happened because of something I did,” he reveals.

When the financial controller of GrandMet moved to banknote maker De La Rue, Greenslade followed him. Becoming a finance director in its cash systems division, a global business that sold bank note counting, sorting and ATM machines.

At a time of great opportunity- across Europe and including the reunification of Germany created enormous demand for its services- Greenslade travelled extensively to various subsidiaries. It was also the start of M&A work for him, buying small subsidiaries, and bolting them on to the group’s distribution network.

Next was a role as finance director of computer giant ICL’s retail systems division, that supplied EPOS (electronic point of sale) systems to the likes of Marks & Spencer and Sainsbury’s, beckoned. But a plan to float the business away from owner Fujitsu failed to materialise.

Greenslade’s enthusiasm for cutting deals brought him to the attention of the board of recruitment firm Robert Walters, which was targeting a return to public ownership when its American parent ran into difficulties.

As the incumbent CFO had moved on, there was an urgency to bring on Greenslade, who joined the team to successfully re-list the business in a very short timescale. “IPOing a company that has already been public is much easier than one that hasn’t, because all the governance and structure of the business is there already. They had carried on reporting internally as they had done when they were public,” he says.

Greenslade says he also gleaned plenty of helpful advice from the group’s external advisory team. “What I learned was that when you’re paying a lot of money to top advisers, is to rely on the expertise and guidance they can offer. Don’t fear asking or delegating,” he says.

But the listing process was still highly challenging, demanding a huge amount of work to pull off, while undertaking all the other CFO duties. “I described the role as like an octopus, juggling with several balls, because there’s so many things you have to keep going, such as reporting accounts, elements of governance or risk.

Regardless, Greenslade says he enjoys the thrill of dealmaking, making two bolt-on acquisitions at Robert Walters before heading off for pastures new. At Spectron Group, he helped restructure the online energy broker and prepare for IPO but ended up being sold to Norwegian freight and energy broker Imarex.

His arrival at Axiom Consulting, a private equity-backed management-buy out from the insurance and benefits giant Aon, coincided with the global financial crisis (GFC), which created challenges. On  private equity owners, he says: “They’re the most supportive people in the world to work for, when it’s all going to plan, and extraordinarily demanding when things don’t go in the right direction,” he says.

He describes the sale of Axiom as a going concern to insurance services group Charles Taylor as one of his career achievements. “It was really touch and go but the business and staff went to a good home,” he says.

At Kane Group he participated in the equity-backed acquisition of HSBC Insurance Services, “It was the sort of corporate engineering I’d done in the past- and really enjoyed,” he says.

Greenslade is also a founder of RPL Investments, which specialises in assisting with raising funds for small businesses as well as advising on corporate strategy.

Growth story

At Warehouse REIT, Greenslade’s enthusiasm for hard work and the intellectual challenge of complex structures has been evident. The IPO took 18 months as it required rolling the founders’ LLPs (limited liability partnerships) into corporate vehicles. “There was quite a lot of work getting the structure, processes and governance in place,” he says.

He describes the last few months as a frenzy of activity around delivering annual results, which met City expectations, and then 80 shareholder meetings, through the chaos of the lockdown period. But working with a team that he is very comfortable in, certainly helps, he says. “Culturally I don’t think I’ve enjoyed working with people so much. We’re all of the same mindset and appreciate each other’s areas of expertise,” he says.

Being in a venture providing an offer in demand must also bring a great deal of pleasure? Greenslade says he feels excited about being “strategically in the right place at the right time.”

But he says the critical issue is how to take advantage of these “sectoral tail winds”, as he describes them. “It’s about how do we enhance shareholder value? What are the best places to invest in?”

He says his role is double-edged. “My job is to support the property experts and to a certain extent try and control the exuberance, and say slower please,” he says.

He says a skill set developed over years as a finance leader and deal maker places him well for ensuring the risk appetite is set appropriately. “Because 50 percent of me is boring accountant, who wants everything controlled and reconciled, but the other 50 percent enjoys corporate activity and the broader commercial role that comes from dealing with finance, I’m perfectly qualified for this,” he adds.

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