FD Interview: Tim Croston, Group FD, Nichols plc

23 Jan, 2012 | Posted by Grant Thornton
Categories: FD Intelligence email, FDI issue 2, FD Interview | Tags: tim croston, nichols, vimto, group fd, group finance director, interview, q&a, uk, food and beverage, drinks, grocery, career, auditors

Building a successful career after a false start, tackling low consumer confidence and escaping the pressure of work – Tim Croston talks FD Intelligence through his work as Group Finance Director for Vimto Soft Drinks Division, Nichols plc.

How did your career begin and how did it lead to your role as FD?
It’s fair to say I took an unconventional route. Back in 1980 I started as an operating theatre technician in the NHS, but left at the age of 23 to go back to full-time education. I subsequently trained and qualified with a practice in Manchester, then spent six years with British Aerospace before holding a couple of financial controller roles with Polyone Inc and then BSN, which was part of Smith & Nephew plc.

I joined soft drinks company Nichols plc in 2005 as Group Financial Controller. I became Finance and Operations Director for the Vimto Soft Drinks Division in 2007, and was appointed Group Finance Director in January 2010. 

Are there any recent business trends that you don’t like?
As an observer, and from a personal point of view, I’m not keen on the recent trend for pre-pack receiverships. On some occasions, I question the morality of a group of directors who leave banks and suppliers with debts, then cherry-pick the assets out of businesses before starting to trade again. Luckily, I’ve never been on the receiving end. 

What is the biggest barrier to success in your role?
The barrier to success that potentially exists – though not in my role today – is a lack of information. You need the right data in terms of performance reporting, but more importantly you need to have relationships between key players inside and outside the business so that you truly understand the issues affecting your business.

What companies do you think have a strong finance model that others should follow?
There’s no ‘one size fits all’. It depends on where a company is in its evolution and which industry it operates in. I look no further than our current business. At Nichols, we operate an outsourcing model for our production, warehousing and distribution. We have key co-packers who produce Vimto and other brands on our behalf, which allows the management team to focus on marketing and selling the brands rather than managing the factory.

The benefit is cost efficiency: our co-packers are bigger than we would be on our own in terms of better buying power, which reduces cost. The model is also more flexible in terms of production capability; we have a number of co-packers offering a wide variety of packaging formats and capacity. Lastly, the model is beneficial to the balance sheet as we do not have to invest in plant and machinery our levels of capital investment are very low.

What is your take on the alleged double-dip recession?
For the UK grocery market we expect 2012 to be as tough as 2011. Inflation might ease slightly but the big problem is low consumer confidence. Consumers simply aren’t spending money like they were. The current economic downturn started in 2007 but consumer spending has been hit more so in 2011 than at any other time in this period. Only when consumers have the confidence to start spending again, not just on groceries but on higher value items like TVs, cars, even houses, will we start to climb out of recession.

What are the biggest challenges facing your sector specifically?
The biggest challenges facing the UK soft drinks sector in 2011 have been low growth and input cost inflation; I expect both issues to continue into 2012.

The UK soft drinks market volume is currently growing at 1%; it was 4% a little over a year ago which shows that the consumer is suffering more than at any other time through the recent economic downturn. Low growth means that the major brands are promoting deeper and more frequently which squeezes prices and potentially drives value out of the sector. At the same time all the key input costs are on the rise, most notably sugar, juices and packaging.

What is the best piece of advice you’ve been given about your role?
‘Be yourself’ is something that rings true now that I am two years into my role as Group FD. Being a finance director of a plc means that you are exposed to many levels of communication on behalf of the company and the natural tendency may be to portray a persona that is expected – but you should have the confidence to be yourself as that is what has got you to the position in the first place.

Who has had the most profound affect on your career?
When I worked as an Operating Theatre Technician, I had many fantastic colleagues but there was an underlying tone of dissatisfaction. People would moan about salary, conditions and prospects but they had done nothing about it and continued to work in an environment that didn’t challenge them and one in which they were clearly unhappy. As I look back, these people inadvertently had a profound affect on my career, as I didn’t want to end up like them. They gave me the drive and lit the fire in my belly to get up and do something with my life.   
 
Can you name five key assets that are a pre-requisite to becoming a successful FD?
Firstly, enthusiasm. You need that drive to continually improve, not only for yourself but to inspire those around you as well.

Next, you really have to have passion for the business and for the products that you work with, rather than focusing too much on the technical side of the role.

After that, you have to have a great finance team. You need to work with folk who challenge you, have the right attitude and want the same things as you.

Connected to this idea, you need to be part of that team. Yes, you need to be a strong, respected leader but people need to be comfortable with you and comfortable that they can come to you if they’ve made a mistake.

Finally – be yourself. I think that’s really important.

Do you have a business hero?
I admire anyone who’s worked their way up from the bottom, the likes of Lord Sugar. I was attending a CBI lunch a few weeks ago and the guest speaker was Andrew Tinkler, CEO of the Eddie Stobart organisation. He told a wonderful story about starting out washing trucks for Stobarts, he went on to build a construction empire and eventually returned to buy out the business.

As well as individuals, I also admire large successful corporate brands. Coca-Cola and Disney spring to mind – they have products that truly deliver and keep delivering year after year.

What are you most proud of in your career to date?
Two things: going back to full-time education at the age of 23 was a big decision and indeed a potential risk. So gaining my professional qualifications after a ‘false start’ to my career was a real turning point in my life that I’m still proud of.

Secondly, being offered the Group FD post at Nichols plc. Two amazing moments from the past and present.

If you weren’t an FD, what would you like to have done instead?
Operating Theatre Technician!

How do you switch off from the pressures of work?
I go to the gym and cycle. Football fan – I have invested 36 years as a Man City fan and at long last look to be getting some payback. And spending lots of time with my family – my wife, Sue, and children, Lucy and Sam – especially at our caravan near Abersoch in Wales.

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