And, after turning a 30-staff, £20m-turnover UK company into 500-staff, £114m-turnover global business with offices in 31 countries in just over 10 years, he’s got every right to be proud. Not that there haven’t been some hiccups along the way, nor would he claim that the current HH is the “finished article”.

However, the fact that there is still more work to be done at HH is a positive for MacMillan, and despite some people thinking that the traditional print management model has had its day, he says there are still plenty of opportunities. And don’t try to tell him otherwise.

In fact, don’t ever try to tell him that something’s not possible full stop – because the chances are he won’t rest until he’s proven you wrong.

Darryl Danielli How did the company come about?

Robert MacMillan It began in 1993 as a print management company headed up by Howard Hunt.

Howard Hunt the person, as opposed to the company?

Yes. In the very, very early days, Howard had a small interest in Howard Hunt City, I think it was around 25%. I used to work at Howard Hunt City and I managed a lot of Howard’s work there. The problem was that Howard Hunt City, back in those days, wasn’t a very good printer, so I was outsourcing a lot of our work to our competitors. So I did a pitch to the other two owners of the company suggesting we should get rid of our printing presses and become a print manager.

How old where you at the time?

I suppose I was around 19.

So you, a teenager, were telling them how to run their business.

Basically, yes. You can imagine how well that was received. But it got worse. I also told them that if they weren’t willing to do it then I would go and work for Howard, because he was already doing it. So the chairman at the time, Nod Pigott, who I’ve still got a lot of time and respect for, said ‘I’ll tell you what, I’ll call Howard now and give you a reference’. So he picked up the phone, called Howard and said ‘Howard, you can have Robert he’s useless,’ and slammed the phone down.

So you didn’t leave Howard Hunt City on the best of terms then?

Actually I did, because just as I was leaving I won them a very large contract. 

When you started at HH was it just you and Hunt?

It was him and his wife, and when I joined they were turning over around £1m a year. But it was one of the first modern print brokers. Howard had great contacts, but it was a small business and I think if he was honest then he didn’t particularly want to grow it; it was more a lifestyle business.

And did you want to grow it?

I had very ambitious plans and when I acquired the business [in 2003, after around 11 years] we were turning over £20m a year and had 30 people, but we were about to lose our biggest contract at the time, which was around 45% of our turnover.

Did you find that out before you agreed the deal to buy the business?

I knew it was going, but I had agreed a deal and I was quite naive and quite bullish about what I could do with the business.

How old were you?

I was 31.

So the business had pretty much been your life then?

I hadn’t done much else; before that I wanted to be a footballer and I played for Southampton and Fulham’s youth teams, but I got a bad injury and had to give up. I actually made my [amateur] comeback just before joining Howard and I broke my leg in two places. I was off work for the first six months.

Sounds like you did your best to prove Pigott right in his ‘reference’ for you?

I was certainly useless for the first six months. Howard was great, though, and really looked after me.

Back to the MBO; how did you cope after losing virtually half of your sales as soon as you took it on?

Well, despite losing our single biggest customer; we actually grew in the first year of the MBO, from £20m to £22m. I know it doesn’t sound like a lot, but after losing British Gas, the team put in an amazing performance and not only plugged the hole but also actually showed 10% growth. It taught me a fairly basic lesson: you can’t have one dominant client.

Did you learn anything else?

Never lose faith in yourself or your goal. The other reason that I acquired the business was that I had won a pan-European contract, and to deliver it we needed to invest. So I sat down with Howard and explained that I wanted the business to be European and, ultimately, evolve into a global brand that had customers all over the world. The problem was that he didn’t want to expand, so I asked if I could buy the company. I had no money and no idea of how to go about it – but I knew it was what I wanted.

Was securing the finance tough?

Not really. All three [banks] that I approached offered to lend me the money. I had to put my house up as security, though. If I was in that position in today’s climate, I don’t think it would have happened.

How big is the business now?

Since then [the MBO] we’ve grown and are now in 31 countries around the world. We have around $300m of spend under management and some very large contracts, one in particular in North America is around $100m.

Is that a recent win?

Yes. We’re trying to agree an announcement without actually naming them, but we’re implementing it now to go live in January.

But aren’t you getting back into the territory you were in before the MBO, in having one major client responsible for a lot of your business?

It is a big deal, but we’re a completely different business today, and it shows the size of the opportunity in North America. When I acquired the business we were probably one of 30 print management businesses in the UK and we were never going to be the biggest. The only way to differentiate ourselves was to grow into Europe, which we did off the back of a client. We also focused on the marketing services side of the business, because everyone else was focused on financial services. It worked for us, but it was tough because the spend volumes weren’t as big as those in financial services and it tends to be spread across numerous markets.

And I guess projects were also more heavily reliant on budgets that could be here one day and gone the next, whereas financial services tends to be things that have to be done.

That’s true. We’ve signed a lot of contracts in the past where the expected volumes just didn’t materialise, but it was a contracted commitment – we had to put resources onsite and in numerous markets – and the spend wasn’t at the level we expected. So that was a big challenge in the early days when we were resource heavy. But we stuck at it; we worked through and won more clients.

So basically the model is that you enter a geographical market off the back of one client and, initially, it’s a sort of loss leader for the rest of their global business, even though it will probably lose money until other clients come on board in that market?

Exactly that. There’s nothing more scientific than us talking to clients and them saying that they’re really interested in Europe and North America, but their challenge is a different market. Anyone can manage a contract for a client in an established market, but it’s often the other markets that can be critical in winning a deal. But I believe we’re now in every market we need to be in and we’re very bullish about the future and I’m confident that we’re going to see a big, big growth spurt.

In new or established markets?

Both. In fact we’ve recently looked at our focus in Europe and we’re going to be recruiting some very senior people here, Justin Barton who was Williams Lea group CFO and then CEO for North America has just joined us and we’re expecting to announce some other very senior appointments soon.

Will Steve Nunn [Tag chief operating officer, print & procurement who left Williams Lea in June] be one of them?

[Laughs.]

I have to ask because the rumour mill has been going into overdrive about him joining you.

With the business growing, North America is now our single biggest market and Asia is growing, and I’ve spent the past year looking for someone to head up EMEA. We’ve now found a new chief executive for that role that we headhunted from the competition. That’s really all I can say until mid-December.

Fair enough – we’ll leave it up to people’s imaginations. Will this new appointment free you up to focus on more global expansion?

I think so. 

Will you focus on certain countries?

Having a stronger management team in place means I can focus on wherever I’m needed. For example, it has given me the chance to look a bit closer at our UK business and we will be announcing a very large UK contract very soon. We’re starting to see a real upsurge in our European business generally. We’re not VC-owned or a PLC, we’re an owner-managed business that can make its own decisions and we plan to make the most of that.

So what is the ownership structure?

I own 60% of the business and the remainder is owned by the staff. That way we have very good loyal people that have a vested interest in the success of the business and our clients.

In terms of growth though, now that you’re over £100m, have you reached some sort of critical mass?

Yes. We’ve been growing the business for 11 years to get to this point and we’ve had to keep investing to build this infrastructure. Now we can start to win bigger contracts. In truth, 50% of our geographical markets lose money, 50% make money, but the difference between those loss-making markets turning a profit can be just one contract. For example, we’re rolling out HSBC and HP across Asia Pacific, one of our loss-making markets, and that will now be profitable because it has the scale we need.

But didn’t you have a problem a few years ago keeping on top of the global growth and have to restate your accounts? What happened?

Basically, the business had outgrown the CFO we had at the time. As a result we’ve brought in a new CFO and chairman. It gets me back to the point about having the people that are right for the business at the time; as you continue to grow you have to continually review the skills you need in the business. Sometimes you don’t have the right people for the business, or the business simply grows so quickly it outgrows them and you need to make a change. We’re not perfect and we’ve had some challenges along the way, and that was one of them.

What have been the biggest challenges?

People have probably been one of the biggest challenges for me. When you recruit someone you have this expectation that they will grow with the business, but if that doesn’t happen it’s frustrating for everyone. In the past we have had some people do a really good job and they were promoted as the business grew, but not everyone was able to keep up with the pace. There are some that have, but a lot, through no fault of their own, just couldn’t and left.

What do you think you’ve learned over the years?

So much, it’s difficult to pinpoint specific things. I think when I acquired the business, being quite naive was a good thing because I had this unbreakable belief in what I could achieve. What I’ve learned, though, is that you need people around you that are better than you. I’ve got that now. I’m good at some things, useless at others. In the early days I wanted to do everything my way, and I don’t think it was always necessarily the right way, but we got there in the end. It just took longer than I thought.

Would you do anything differently?

Probably not – it’s been fun. Yes, there have been some tough times, but I’m probably enjoying it more now than I ever have. I’ve got people around me that I trust and that allows me focus on the areas I enjoy.

You’ve mentioned tough times in the past; have there been times when you could have lost the business?

Up until recently I owned 100% of the business, so my absolute Armageddon option was that if we ever got into trouble I would go and get some VC money or an investor. But we were never in danger of losing the business.

Have you been approached by VCs then?

All the time. I would say almost once a week from VCs, and from the competition I probably get approached once every two or three months. The good thing is that they continue to approach us, so we must be doing something right.

Have you never been tempted?

In truth, a couple of times, briefly, yes. I’ve never got into due diligence, but I’ve had some very large numbers thrown at me. Because if you keep saying no...

People think it’s a negotiating tactic?

Exactly. But I’m not playing the reluctant seller. I’m really not interested. This business is still a work in progress, it’s got so much potential that it hasn’t fulfilled yet. It’s a mature business, but there’s a lot more work to do and we’re building something really special. We’ve been through the most painful stages now, and we have solid foundations.

But will you sell it one day?

Never say never, but I hate the thought of selling this business. Maybe in five or 10 years we might look at some kind of listing on the stock market. I would want to stay on though, but it would be nice to have a lot of money in the business to start acquiring other businesses. A lot of our competition has, but we’ve had to build everything organically. 

So you’re not looking at M&As now?

Not really. Often companies have to acquire to build geography or add new clients, but we’ve got the geographical footprint and we’ve got a really strong client pipeline and when we put our best team to it, I’m confident that we will win the business. What we’re concentrating on now is much larger scale, but fewer opportunities. The days when we go after any type of business just to grow are over; we’ve been there, seen it, done it. In the future, we’ll let the competition fight over the crumbs off our table.

Does that mean that you will be walking away from some of your clients that don’t fit the model any more?

We’ve only actually got around 40 clients. Our competition often have hundreds of clients, we don’t want hundreds. We’re very engaged with all of our clients and how we can develop our relationship with them, so no, I don’t see us walking away from any of them. In fact, I want to grow our relationships with them.

You mentioned the challenges; just looking at your numbers, you’re a circa-£110m business, but the margins are, well, slim probably doesn’t even cover it... Is it sustainable?

The margins are tight. In terms of the business, if I had gone to business school then they would have said that you can’t create a business like this without money from the stock exchange or VCs. And we didn’t have any of that. It’s been really tough and our balance sheet reflects the losses we’ve incurred to build the business, but we’ve never had any client that hasn’t worked with us because of our financial standing. You have a choice in business: you can do it yourself the hard way or use other people’s money. It has been bloody tough, going into 31 countries, with different regulations, having to sell a relatively new concept in many of those countries and recruit new people. It’s been much harder than I thought it would be, but I’m really proud of the business and what we’ve achieved as a team. People said we could never build a global business, but that’s exactly what we have done.

Is that why you wanted to do it, because people said you couldn’t?

I think that was one of the reasons. Every time someone says you can’t do something it often inspires you to ask ‘why not?’ It’s in most people’s nature to tell you what you can’t do rather than what you can do. I’m a firm believer that you shouldn’t listen to the negative people; if you believe in what you’re doing and you believe it’s sound, then go for it.

But in terms of the profits, there are print businesses with turnovers of under £10m that make more money than HH.

Absolutely. But ultimately what we’ve built up here is something that is unique and that will be here for a long time. You could argue that if you run a £10m print business and you lose one of your customers or your markets decline then what was a great business one day could be gone the next. I think what you’ll see in HH in the future is that, as the volumes grow, there will be a massive difference to the bottom line. We now have the scale that we need to be a very profitable business in the future.

What about marketing services, how big a chunk of HH is that?

Marketing services is around 10% of the business, but it’s growing quickly. We do some award-winning and sexy stuff, and it’s also higher margin business. 

But if you look at the likes of Communisis and St Ives, they’re both rapidly growing their marketing services though M&As, are you not tempted to do the same? 

It would probably be easier and quicker, but also higher risk. But if you look at Communisis and St Ives they’re both listed and they have to ensure that every quarter they hit targets, so they’re almost duty bound to acquire. We’ve grown this business organically from day one and I think that we can do the same in marketing services. I would like it to be around 20% – I would be delighted for 80% of sales to always be print management. We’re really proud of being a print manager.

Do you think that the time for the traditional print management model is passing though?

No I don’t. It’s interesting, because we’ve had this debate in our business and for a while everyone was knocking print management as not being a sustainable business model. But I think that, done the right way with an extending portfolio of services, it has absolutely got a future. That said, if you’re just a standalone print manager and don’t have some sort of niche in one market, then perhaps the model is broken. But I’m expecting us to see some tremendous growth, including here in the UK, and a lot of that growth will be ‘version 1.0 print management’.

Something I have to ask is about payments. You mentioned in your last results that you would invest more cash in your creditors.

Every single supplier in our business is paid up to date.

But your terms are 90 days, aren’t they? You’re not looking to shorten them?

No. If anything our clients are looking to extend those.

So what are your payment terms with clients then?

One of the challenges of working with large global companies is that they are spending so much money with us that they can be quite aggressive with their terms. We recently walked away from a deal that one of our competitors took on 120 days. I think the worst we’ve been asked for is 180 days – we declined, but all of our major competitors signed up.

So is it 90 days both ways then?

It varies; I would say that we get paid on average before 90 days, but not a lot before.

But what you’re saying is that you pay on 90 days, no exceptions?

No exceptions. Yes, that is what I’m saying.

Do you think that your suppliers like working with you?

Our suppliers have a choice – they don’t have to work with us – but they probably find that if they’re doing work for global brands they’ll probably get paid on the same terms as us. But you would have to ask them whether they like working with us. I would say that today, the vast majority of suppliers do like working with us and we’re an important part of their work mix. But if I was a printer I would like a decent mix of direct clients that I make most my profit from, and then the print management clients, to fill my excess capacity. 

But right now there’s still overcapacity in the market, so there are plenty of suppliers that want to work with print managers; what happens if the situation changes?

I’ve heard that argument so many times. There will always be overcapacity in the UK print market; if it ever gets to the point when there isn’t then we have the rest of Europe to place business. There are two ways of looking at it, as a print management company we have helped keep a lot of print companies going, we’ve also had print companies that have been fantastic supporters for us in the tough times. And if the print manager is doing its job it should only be sending a printer work that suits its equipment. 

Do you think print managers generally need to work better with their suppliers?

I think that’s fair, because were only as good as our suppliers. We’re undertaking a programme at the moment where we are making a real concerted effort with the supplier base to work much closer, helping them in terms of any decisions they’re making on things like equipment spend. I do think that on the print management side generally that a lot more work needs to be done. But we are different in that we don’t have any manufacturing, so that means that when we get prices from our suppliers we’re not going to be a client one day and a competitor, that knows their prices, the next. 

Is there anything that printers can do to improve their own businesses?

I come from a manufacturing background and so do most of the people in our central buying team; one of the things we try to tell printers is to focus on the things they do really well, where they can be innovative. To look at the things that work in their factory and that they can make money on, rather than try to be all things to all people.

Final question: did you ever think you would one day be running a £100m business?

I think I did. When I started my ambition was to build a £100m business. I didn’t know how, but £100m was the magic target I had in my mind when I set out.

What’s the magic target now?

Now it’s £500m. I’m nothing if not ambitious.