fdu CFO Series: Interview with Matthew Bonfield, Huntswood CFO

In a series of interviews with CFOs in high growth companies, fdu’s Richard Morris talks to Matthew Bonfield, Chief Financial Officer of Huntswood. Matthew has been overseeing all financial, risk and legal aspects of the Huntswood business since joining the board in 2010. Huntswood is the UK’s leading specialist resourcing and consultancy firm in the areas of governance, compliance and complaints. Its ambition is to enhance the reputation of their clients with their customers, people and regulators.

Huntswood placed in the Sunday Times 100 Best Small Companies to Work 2015 and in the Virgin Fast Track 100, after growing from £40m in 2010 to £300m in 2015. This high growth is mainly attributed to new markets, geographies, products and PPI. Huntswood have also been included in 2016’s Top Track 250.

What caused Huntswood’s phenomenal rate of growth?

Due to the flexible nature of our service offering, Huntswood were able to quickly respond to the increase in the PPI market, which undoubtedly had a major impact on the company. Banks needed to scale up quickly in terms of operations to meet recently imposed deadlines and manage the processes required for PPI compensation: we leveraged our ability to act quickly ahead of our competitors as a result were able to assist our clients in the required fashion. This inevitably led to significant growth.

Were there any acquisitions during this time?

During this period there were no acquisitions – all growth was organic. We did however set up two subsidiary companies to help manage and de-risk further contracting out of our flexible workforce. These two companies have since been sold as part of our strategy to focus on our core service offerings.

How did the sector and market perform during this period?

PPI claims have been around since 2007 so they are not new, however the major retail banks lost their judicial review in April 2011 and the precedent was set. At that time an amount was set aside which over the last number of years has grown to £25bn.
Significant complaints and enquiries had been stockpiled awaiting the courts’ decisions. Following the court outcome, many of the back office structures had to be set up in record time. Huntswood supplied the banks with a flexible and easily scalable operation to work on their behalf handling incoming claims and enquiries the banks’ outbound cold calling claims advice).

What department and/or discipline was affected the most by this rate of growth?

Initially our Finance Department was most affected. This was primarily around systems and processes, necessitating significant change, such as revamping the timesheets and moving from manual to computerised input.
Furthermore it was essential that we maintained quality control in such a high growth period; to this effect Huntswood effectively created a new department – Business Internal Control (BIC). This was essentially an internal project control management department to increase uniformity, a structured approach and a feasibility study on projects.

What was the greatest sense of achievement?

During this period there are a number of areas that the company should be proud of:
A great sense of achievement comes from the fashion in which the growth was achieved; in addition to the phenomenal top line growth (£30m – £300m) the EBITDA percentage approximately doubled from 10% to 20%.
A further facet was transitioning the company from an owner-managed SME to a mid-sized corporate while still maintaining the company DNA. The corporate DNA is very important to Huntswood and we did not want this culture to be diluted as the company grew.
Lastly, when I became CFO, I ensured that the company was built on solid foundations and that all accounting functions were in a position that would underpin a company that would inevitably grow at a tremendous pace. This proved invaluable during the following number of years.

How did your team develop – either hiring in talent or developing from within?

As mentioned above, the Huntswood company DNA is very important to us – then and now, we were aware of the pressures a high growth company can instil, however did not want our culture to change as a result of this growth.
The team changed little in size, however everyone had to take a step up and create new teams below them with new responsibilities; it sounds straightforward, but in reality it required some attention. This ‘step up’ provided favourable circumstances for people to advance their careers rapidly and take advantage of new opportunities. Employees made a great success of their transition to a higher position; in one particular instance, an administrator took advantage of the situation to become a Team Manager, continued to prove herself in a very short space of time and is now a pivotal member of the senior finance team.

What came as the most unexpected issue you had to face and how was this dealt with?

I wouldn’t say that there was anything that was really unexpected – the senior management team had a good understanding of what would be required and the ‘pressure points’ we would face in a high growth business. I would however like to stress the importance of maintaining a full understanding of the cash flow in a business of such high growth. Our cash flow had to take into account the funding of a theoretically larger business as Huntswood would inevitably become during the period of cash collection: we had to plan to fund a business that was larger than the business we were at that point in time.

Looking back would you have done anything differently?

In growth mode I was constantly facing the question of developing the existing system or implementing a new system. Due to time pressures the decision was constantly made to develop the system that we already had rather than bite the bullet and go with a new system. In hindsight, I wish we had gone with a new system earlier but as we all know, hindsight is a wonderful thing!

For more information, see: www.huntswood.com