It’s hard to believe that the youngest chief executive of a UK-listed company nearly turned his hand to ski instructing but that’s exactly what almost happened to 28-year-old Tekmar Group PLC (LON:TGP) boss, James Ritchie.
The proud Yorkshireman joined the company, which listed on AIM earlier this week, as its first employee back in 2009 when he was just 19.
READ: Tekmar debuts on AIM
But before opting to enter the relatively unglamorous world of subsea cable protection, he toyed with the idea of moving to France and teaching kids how to ski, only to decide against it after realising that the wages were unlikely to cover much more than his bills.
“I thought ‘do you know what? Do I really want to spend a year in a one-bed apartment with no money teaching kids to ski and being a day creche for parents?’”
University wasn’t an option either. Ritchie’s entrepreneurial spirit and passion for business meant three more years of education would have just been wasted time for him.
“I’d had many small ventures from a young age, from market stalls to smoothie stalls through to washing cars, so it had always been a passion of mine to be involved in business.”
In the end he took up the offer from Tekmar, where his job was to sell this new concept of subsea cable protection that his father’s company had been developing for the then nascent offshore wind industry.
Think of the extra bit of rubber on the end of an iPhone cable which is a bit stiffer than the rest of the wire: “We basically make very large versions of that…which protect [subsea cables] from any dynamic movement,” explains Ritchie.
None of his peers had shown an interest in taking this technology forward, but Ritchie saw some potential in the industry, even if no one else could.
Management-led buyout
The first contract he landed was worth £6mln and within two years revenues rose to £11.5mln. More importantly, Tekmar had posted a second consecutive annual pre-tax profit of more than £1.5mln.
At that point Ritchie joined forces with private equity group Elysian Capital to buy out his father, Gary, who originally set up the business.
With Elysian’s financial backing, Ritchie, who was now the chief executive, and his team quickly grew revenues to £20mln. A couple of difficult years followed but Elysian never lost faith, opening the chequebook to support the group.
Things began to turn around shortly after as Tekmar’s market share continued to grow, and the firm posted record sales of £21.6mln in the year just gone, booking a tidy £4mln profit in the process.
About a year ago now, Ritchie approached Elysian and suggested it was time to start thinking about the next chapter.
“They helped us in the beginning, but we had this debt (around £40mln) which was starting to choke the business in terms of how we could diversify and go further,” said Ritchie.
“So we floated the idea of an IPO and a year later we’ve done it.”
M&A on the cards
The move to list on London’s junior market has cleared the debt from Tekmar’s balance sheet and actually left it with £9mln in cash.
“That’s a remarkable difference from where we were [this time last year]; a completely inverted position,” notes Ritchie.
Ritchie, who lives not too far away from Tekmar’s base in Newton Aycliffe with his fiancée Nicola, has already earmarked that cash for a “rapid and aggressive expansion plan”.
All of the company’s products are manufactured here in the UK at the moment, but the idea is to open more plants further afield, in places like China and the Middle East where demand for its services is booming.
He also wants to broaden Tekmar’s offering and grow its market share, with plans in place to acquire some new technologies and bolt-on businesses, particularly in the oil and gas space.
“That’s not to say we’re going to deter from offshore wind, that will always be the backbone, but we want to try to attack and grow our market share [in oil and gas].”
Strong support team
Considering he’s the youngest chief executive of any listed company in the UK – Footasylum’s 30-year-old boss Clare Nesbitt previously held the record – Ritchie is surprisingly modest.
“The key to my success was, from a young age, having the confidence to work with people who are much more skilled than I am. I am absolutely at the mercy of my management team – these guys are incredible.”
Perhaps some of that humility is down to his family. Even after guiding a small firm with no customers to a business valued at more than £65mln and listed on AIM, his dad still holds a small stake (“we’re talking tens of thousands [of pounds], not hundreds”) just to keep an eye on how his son is getting on.