In January 1997, Kevin Keegan quit his job as manager of Newcastle United Football Club, citing reasons that to this day still resonate with Macfarlane Transport Holdings' chief executive. Stephen Cooke is sitting in his office tucked away on the outskirts of Leeds and recalling the time he made his own decision to jump ship and sell his Yorkshire business, Gagewell Transport, when he was at the top of his game. Clearly, it's something he has had to talk about a lot over the last six years,
"I've been asked it a thousand times," he begins. "I remember someone asking Kevin Keegan when he was at Newcastle, 'Why did you leave?' and I liked his answer I thought it was very truthful. "He said he'd taken Newcastle as far as he could take it, now it needed someone else. I think that would describe my situation perfectly." Cooke has worked in transport all his working life. It began with him fetching tea and making bacon and tomato sandwiches for Leeds-based tanker firm Smith and Robinsons, was consolidated by stints at Ferrymasters and Norfolkline and appeared to end abruptly when he sold his controlling interest in Gagewell in 2000.
"I had been there for 15 years," he explains. "It needed a fresh pair of hands. It needed someone who could do something different with it. Early retirement beckoned and Cooke and his family spent time in Florida relaxing in the sun. He did work for some venture capitalist firms as well, but there was something nagging away at him inside. "I think there was a realisation that the early fifties were too soon to retire," he says. "It was good to be off the hamster wheel; I think there were chunks I didn't miss, but equally there were big chunks I did miss." Cooke kept in touch with people in the industry and he regularly read the trade press. There were opportunities to get back into transport before Macfarlane came on to the radar but he turned them down. However the beleaguered Leeds-based transport company that was in administration and in turmoil proved irresistible.
"Let's be clear on what happened," Cooke says, wary of the various creditors for Macfarlane Transport who the press quoted as being angry at the way they were treated. "I think most people in the industry, to some extent, knew to the back end of last year Macfarlane was having some difficulties. I was invited in to have a look and I guess the initial thoughts were that perhaps there was an opportunity to buy the business as a going concern. That was the starting point."
Cooke says this turned out to be impossible because of "certain things, in terms of the numbers, the liabilities".
New company
But when the firm was placed into administration, KPMG's administrators got in touch with Cooke and told him that if he wanted to make a move he had to do it now. "It really was as quick as that. It was all done properly and professionally, as you'd expect from KPMG. We looked at it, decided to make an offer and it was accepted." Macfarlane Transport Holdings was born, with Cooke at the helm. He says 300 jobs were saved, and most of the old firm's customers and suppliers were happy. But he is also aware of those that were not. "We had one or two suppliers that had been hurt and that is very sad. My response to it has been, wasn't me, wasn't here, different company. I also think there's a lack of understanding of the mechanics and how things are done. It was all above board and handled in a proper way, but I can understand that certain individuals did go through some pain."
Cooke retained the services of Macfarlane's previous management, in order to help him get to grips with the way the company used to work. He says one, Robert Fox, has now left the business but the other two, Andrew Forrest and Paul Kennedy, remain: "They are not directors, they are employed as managers. They do a very good job and I'm very pleased to have them on board." So what lessons can be learned from Macfarlane Transport's previous incarnation? Cooke pauses, before answering: "I think one of the most important lessons is do not assume that volume is necessarily a good thing for the business. All transport companies need to measure precisely what it is they do and understand what it is that makes the business work. I think the management information needs to be of the highest quality it needs to be accurate, consistent and it needs to be produced at the right time. If you can do that you have a very good chance of avoiding some of the icebergs that are out there."
Returning to the Keegan analogy, MT puts it to Cooke that the difference between him and Keegan is that he didn't waste much time in getting back into the firing line. Within eight months he was back in the game, managing Fulham FC. Cooke, on the other hand, waited six years. "Well, he did the same thing," he replies. "He probably had a rest, found that he missed it and found that it was the thing he enjoyed doing. Perhaps he waited for the right opportunity to return. And if you're looking for the link, here it is: Macfarlane was the right opportunity."
The Future
Cooke has ambitious plans for Macfarlane Transport Holdings and one of them is growing and developing its automotive business. In September the company bought the assets of another Leeds-based company, KG Sewell, because Cooke was impressed with its reputation: "It was a good thing to do. It had a good reputation in the automotive industry. OK, it already has a lot of people doing what we do, but I think there are still opportunities for quality hauliers to develop and expand. That's one of the objectives of the business. We like the automotive business, we think it fits with how we do things and the way we conduct ourselves."
But with the company still less than a year old, the immediate plan is survival, which Cooke says he is convinced the business will do. And after that comes sustainability: "You are looking at a reasonable, acceptable return on your efforts and investment and then the next move is to enhance it, either by organic growth, or by acquisition." He insists Macfarlane is profitable, in spite of a large chunk of exceptional charges relating to the formation of the new company. He adds: "They are one-off costs, we are aware of what they were, there are no surprises, we knew precisely what we were facing and they will have an effect in the first year."
"We didn't buy this to make a quick buck, it's something we want to build and grow and cherish. We are here for the long haul." So what other purchases are on the cards? Cooke laughs: "Nothing I'm going to mention here! We have our eye on a couple of things and if the right opportunity comes up at the right time and the right price and if it's there to be done for the right reasons, we will give it a bash. We didn't buy the firm to maintain the status quo we have some ambitious plans and hopefully there will be some other moves."
Pallets, Jigsaw and Fastmag
Stephen Cooke is keeping an open mind over whether Macfarlane Transport Holdings joins a pallet network in the future. "Interestingly it's something we may want to give consideration to in the future," he admits. "The secret is doing things right, finding the most cost effective way of loading cargo, and if we could do that at times better through a pallet network it makes sense."
The company is part of the Jigsaw Solutions consortium, though it no longer has a financial stake after its previous directors sold shares to raise cash. Cooke says he's "very pleased" to be a part of it and claims it has a tremendous potential for growth. It forms around 10% of Macfarlane's business.
The company is also involved in Fastmag, a wholly-owned subsidiary of Gloucestershire's CM Downton, and its role is to provide distribution for the printing and publishing industry anywhere north of Birmingham. Cooke describes it as a "true partnership between ourselves and Downtons" and says he also has ambitious plans for this business. "We have real plans to grow the magazine operation in the next couple of years it's a fabulous business. It's difficult, the demands are at times unbelievable, but we are pretty good at it."
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