Five questions for… Andy Scott, chairman and founder of REL Capital
REL Capital is a UK investment company that specialises in turnaround and high-growth businesses.
What does your business do?
REL Capital is a UK investment company that specialises in turnaround and high-growth businesses. We purchase businesses that are either in decline or distressed from insolvency situations. We roll our sleeves up, work hard and turn them around and back to profit. We operate in several different sectors including recruitment, leisure, haulage and entertainment, and currently have 12 companies that operate under four different management teams.
What's been your company's greatest achievement so far?
One of our biggest successes is Contraband, an international entertainment and events agency. We purchased it in September 2016 when it was facing a plummeting turnover and annual losses of over £100,000. We invested heavily in its online presence, purchased a second event-crew business out of administration, moved offices and increased the team. We have since doubled the turnover to more than £4m in the second year of ownership and this is set to double again next year.
What has been your biggest challenge?
When I first started out, I underestimated the time it takes to turn businesses around. My other business focus is property development, which is quite uniform in terms of timescale you buy, you build and you sell usually within 12 months. But REL Capital's turnaround businesses often only break even at best at the end of year one, and make money in year two, with the first six months of the business being in intensive care. Learning to successfully manage this process was a big challenge.
What are your targets for this year?
We're aiming to buy eight companies a year to either bolt on to our existing portfolio or run independently. We have already bought two pub sites in the last three months, which has helped us get off to a great start. We plan to follow that with three or four more acquisitions in the last quarter of the year in the transport and recruitment sectors.
What's the one piece of advice you'd give fellow entrepreneurs?
If you have an appetite for hard work and don't mind getting your hands dirty, you should consider turnaround opportunities; the upside can be huge. Businesses don't go bankrupt, business people do.