Sagentia Inc. (SGA-LSE)
October 31, 2008 Issue
The Most Powerful Name In Corporate News and Information.
Sagentia – The Company To Speak To If You Are Looking To Develop Breakthrough Products And Services Ahead Of The Competition And Find New Profitable Areas To Grow Your Business
Dr Alistair Brown
Chief Executive Officer, Sagentia
Alistair was appointed as Chief Executive in 2008. Alistair joined Sagentia in 2000 and previously had responsibility for global Sales and Marketing, before this being Geschäftsführer of Sagentia GmbH with direct responsibility for Sagentia’s business in the German speaking countries. He has particular experience in the exploitation of technology assets and technology transfer. Much of his commercial and technical experience has been gained working with mainland European organizations at director level. He has a first class degree in Physics and Chemistry and a PhD, which involved research in high speed, high resolution image acquisition systems.
Dr. Brown: “I have been with Sagentia since 2000 and I’m really privileged to have the opportunity to lead the company. My focus is all around growing a profitable, earnings focused business and offering technology consulting and exploitation services to industry. A key part of that is in attracting and retaining top talent and putting that in a framework of operational excellence, driving the profits of business.”
CEOCFO: Please tell us about the services you provide and the industry focus.
Dr. Brown: “The work that we do involves creating and developing or delivering new business opportunities, for example a breakthrough product or a completely new kind of service. We describe ourselves as being a content-rich consultancy. By having people who combine business and technology at the level of the individual we can offer a set of innovation services to clients across a broad range of industries.”
CEOCFO: Would you give us a couple of concrete examples of what you provide?
Dr. Brown: “Our client Prosurgics has just recently won an Innovation of the Year award from the Society of Laparoendoscopic Surgeons in the USA for a surgical “robotic arm” we have developed called “FreeHand”. Currently, with minimally invasive laparoscopic (keyhole) procedures, an assistant surgeon holds the endoscope while the surgeon performs the procedure. Holding the endoscope for extended periods of time is far from ideal. It is tiring and leads to camera shake, poor visualization and longer procedures. We have developed a robot that can be simply bolted to the side of an operating table and controlled by movements of the surgeon’s head. This gives the surgeon total control over the movement of the endoscope and unparallel clarity of vision, which improves the procedure and the outcomes for patients and surgeons alike. Another example is the work we have undertaken with Vodafone which has involved the creation of the world’s first micro finance payment system. Here we recognized that mobile phones had the potential to be used to deliver money in a very secure and low-cost way. This would be a particular benefit to emerging economies. Over a program of work that has been going on for over three years now, we have created, developed and deployed their entire master payment system. As a measure of our success we have over 2 million users in Kenya, and we’ve launched in Tanzania and Afghanistan. Over the coming year we will also see the payment system launch in the huge Indian market.”
CEOCFO: Does the client come to you and tell you want they need?
Dr. Brown: “Mostly. Historically, as an organization, we have always spoken to the technology function within a client company using an approach based around ‘Tell us about your challenge, and we will help you find the solution’. We still use that approach but increasingly what we have discovered is that we can effectively double our client base by also talking about a client’s unmet marketing opportunities using innovative concepts that we can see from our understanding of the technology. We have some very advanced tools and processes in the innovation stage, but the absolute fundamental is the caliber and innovative potential of the people that we employ and the environment in which we put them.”
CEOCFO: When you look at potential people for the company, over and above what is on paper, what do you look for?
Dr. Brown: “They have a sparkle in their eye. One of the things that we learned about people is they will have superb academic credentials, but I look for the people that didn’t have to work very hard to get superb grades. We found that a lot of our people have creative hobbies. They may well have a four point grade average in physics but they might also play first violin with the state orchestra. This is what who we look for – someone with first class scientific credentials combined with creativity, a questioning and alert mind and an ability to deal with abstract concepts.”
CEOCFO: How do you reach your potential clients?
Dr. Brown: “We go to conferences and talk about the work we do. We have a very substantial marketing department that is actively engaged promoting our innovation track record to our key audiences. We also engage with companies directly and we talk about the kind of work that we do and how this may help with their business challenges.”
CEOCFO: What is the competitive landscape?
Dr. Brown: “We cover the whole innovation space from the voice of the customer; what product might we bring to market? Where is there an unmet need that can generate profitable future business? Through to creating technology prototypes, product development and transfer to manufacture. Very few competitors cover that full-service environment, so we find they tend to be boutique consultants who cover small niches. We find that clients prefer full-service providers because we know the stage before and we know the stage after which allows us to easily integrate into our clients’ processes.”
CEOCFO: How is business today?
Dr. Brown: “Business is strong and holding up. Last year we had a very successful year, one of the most successful years in the company’s history, and this year I expect that we will exceed that. We hear a lot of news about credit crunch and the likely impact that will have on our business. I think there is a realization out there that a recession with high commodity prices is a pretty unusual thing and that industry has to continue to innovate even in times of economic uncertainty. By innovating, you can keep ahead of all your competitors. A recessionary or turbulent environment, such as one we are experiencing at the moment, is actually an opportunity to steal a march on the competition. That is the message that I am taking to our potential clients.”
CEOCFO: Please tell us more about your strategy, and the acquisitions part of it?
Dr. Brown: “Acquisitions for us are quite opportunistic. Growth is essentially about finding those individuals who combine business and technology. They recognize that in our company there is an environment in which they can grow and do something quite amazing. Generally, I have always looked for exceptional people. With regard to an acquisition, it would have to be geographically close to a center of action for us, or perhaps part of our overall strategy. However, the culture of our organization, the culture of innovation, permeates everything we do, and it is absolutely fundamental to business success.”
CEOCFO: Sagentia recently opened a new headquarters in Maryland. Why is now the time for US expansion?
Dr. Brown: “It’s the right time to make a full-fledged effort in the US. The company is set for strong organic growth and America is a major market for us where we do a lot of work in the medical, healthcare and wellness space. This is the baby-boomer generation in America; it is a large market and has real spending power. Previously we had offices in Baltimore and Boston, with the Baltimore office focused on technology and product development and the Boston office concentrating our business consulting innovation practice. The decision to open a new office in the Maryland area, the hub of the East Coast healthcare corridor with a pool of talented labor we need, was a key part of the growth plan for the business. For a company like ours access to talented people is fundamental to the business and determines its future growth and prosperity”
CEOCFO: What about outside of the US, are there other areas you would like to be doing more work in?
Dr. Brown: “Absolutely. Our headquarters are in Cambridge, UK, and we have a business consultancy in Frankfurt, which is growing strongly. We also have a joint venture in Hong Kong where we teamed up with a Chinese manufacturing company. There is significant future potential in the Chinese market. We are finding we are getting more involved in healthcare; our people understand the demands and needs of that market. There is an emerging Chinese middle-class that is expected to reach around 560 million people by 2020. This is going to be one of the world’s major markets and people have to have the right products and right services developed in that cultural environment and we want to play a leading part in doing that. I would expect to see us going into China in the future and I would expect to see us going into the west coast of North America, which is a particular opportunity for us. It is about measured programs, planning and thinking. To get operational excellence takes time, with the right kind of people you can grow a very healthy and successful business.”
CEOCFO: What is the financial picture for Sagentia?
Dr. Brown: “I am pleased to say that we have grown cash reserves in the company since March and we have been looked at by various analysts who are recommending us as a very strong buy. Why is that? It is because we have a business that is backed by assets. Sales and revenues are growing.”
CEOCFO: Why should potential investors pick you out of the crowd, and what might they misunderstand that needs to be focused on?
Dr. Brown: “If you look at our asset base and our earnings it would be reasonable to expect a share evaluation of somewhere in the region of 75 pence per share and we are trading at a fraction of that. Moving forward we are an earnings focused business, concentrating on profitable technology consulting and IP creation. We have a series of legacy investments, which causes us to take a paper loss from time to time, but they don’t affect the underlying health of the business. They don’t affect our ability to grow in the future. However, they do give rise to some absurdities. Investors should look past that and look at the heart of the consulting business which was growing substantially last year and continues that growth this year.”
CEOCFO: Final thoughts, what should readers remember most about Sagentia?
Brown: “If you
need to find new profitable areas to grow your business, if you need to
develop breakthrough products and services ahead of the competition, it is
always going to be worthwhile speaking to us.”
“We cover the whole innovation space from the voice of the customer; what product might we bring to market? Where is there an unmet need that can generate profitable future business? Through to creating technology prototypes, product development and transfer to manufacture. Very few competitors cover that full-service environment, so we find they tend to be boutique consultants who cover small niches. We find that clients prefer full-service providers because we know the stage before and we know the stage after which allows us to easily integrate into our clients’ processes.” - Dr. Alistair Brown
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