“Well O.K.” Peter conceded, “I had not thought it through. How much will we have tied up?”
“Working Capital, net about ten million.”
“Big money,” Peter agreed.
“By my calculations, if we sell over sixty-five percent we will be above the break even line,” John explained.
“Excellent,” Michael sounded satisfied with his Board.
“Home Trade Peter?” Michael asked, switching the subject.
Peter startled, seeing that he was in the limelight. “Mr. O’Driscoll, I mean James, has taken me through the scenarios in Ireland and Britain,” Peter began.
“And I have put O’Malley and Riseley in to help Peter, “ James interjected.
“Two very good men,” Michael agreed, pleased James had given his son the best backup available.
Dermot O’Rourke relaxed. Either of O’Malley or Riseley could carry the home trade area. They would carry Peter if he had the sense to listen to them.
“I have put the team through their paces,” Peter went on, “they seem sound enough.”
“Good, good, Peter,” Michael interjected.
Peter took a big breath. His appointment to the Board had been announced to the public on Friday, alongside that of John O’Malley. It had been just an announcement in the Irish Times, but some reporter had done a small item on O’Byrne’s and given a run down on the new Board.
To Peter’s surprise he’d had a follow up call on the weekend from a representative of one of the Company’s major customers. Peter had been flattered. Papers arrived and he’d briefed James O’Driscoll. Together they’d had several phone calls in preparation for the Board Meeting.
As he began to speak he knew he was going to surprise them.
“I have had contact from a major U.K. group of customers through their parent company Associated Finance,” Peter said and paused, looked around and let the silence grow for a minute. He savoured their attention.
“Associated Finance,” he continued, “are a very decentralized organization, a holding company with a good growth record. They usually leave their subsidiaries alone once they hit profit targets.”
“Do you think there is trouble Peter? I would not have expected a contact from the HQ,” Dorothy interjected, feeling that Peter was becoming too self-important at his first Board Meeting.
“I was in on this, Peter contacted me immediately the contact was made. We know Associated Finance better under the names of their supermarket chains. However recently they appear to have consolidated some aspects of their procurement. They are intending to do significant buying through a central procurement division.”
“Dorothy I think you will find that they have a new procurement policy,” Peter said by way of rebuttal.
“Associated Finance has acted in a passive way as Holding Company, that is, as far as we have been concerned,” Dorothy persisted.
“I know of the company,” John threw in “They really are a major multinational player and they are a highly diversified business. They have a London Stock Market quotation and they have grown very large over the last ten years. Their top man is called Leo Crawford. He has a huge reputation in the city and is reputed to be ruthless in takeover situations.”
“So what are you telling us Peter?” Dermot liked to keep it simple and wondered where the discussion was going.
Peter drew a breath; this was his surprise for them, his coup.
“Well it’s like this,” he explained. “They explained to us that they were going for ISO registration.”
“ISO what?” Michael asked.
“ISO,” John interjected, “is an international quality standard. To register for it a company has to undergo a rigorous quality audit of its procedures.”
“That’s right,” Peter acknowledged John’s supportive comment. “Associated Finance have informed me that they have decided to put their retail businesses, that is all their Supermarket chains up for registration for the quality standard. They asked me to meet with their ISO expert, someone called Janet Simmons.”
“And how does this affect us?” Michael asked.
“Two ways,” Peter explained, beginning to enjoy holding the attention of them all. “There is good news and bad news.”
“Good news first,” Michael, Dorothy and Dermot said almost simultaneously, and they all laughed.
“Good news is, they have picked us out of their computer analysis as a major supplier across their Supermarkets, particularly dominant in areas of quality produce such as organic foods.”
“Don’t like the sound of this,” Dermot said.
“No, no,” Peter corrected. “It is sound. They are really into this quality standard thing. The bottom line is that if we measure up they will make us a preferred supplier. The way they were talking I would be of the view that this could give us a hundred and fifty million in sales to them in a year. It is a major foot in the door, if I say so myself.”
“Now you are talking,” Michael said warmly, “God I knew I raised an O’Byrne in you Peter. This is great news. Will we be able to supply Dermot?”
“Of course Michael, but not immediately. We would need time to build up and so maintain quality. However there is a way, initially we could do joint ventures with a number of other suppliers, under our branding of course. If you get the business Peter, we can supply.”
“Price?” James said dryly, to bring Peter back to earth.
“Price?” Peter replied, puzzled.
“Yes price. Did they mention prices, margins and credit terms?”
“No,” Peter said sounding deliberate. “I assumed we were discussing on the basis of existing terms.”
“Sounds too good to be true, do you want me to come back on this Michael?” James asked.
“No. No, we have to keep you out in New Business Development James. It’s crucial for the long term. I would like my boy to handle this. He has brought in the deal, so we should let him run with it.”
Peter sat back. “Thanks for the vote of confidence Michael. I believe I can handle this one. I’ll use Riseley where I can.”
“The bad news Peter?” Dorothy asked quietly, “You said good news and bad news.”
Dorothy was unhappy with the turn of events. Peter was making a splash and him hardly a wet week on the board.
“It is the ISO Registration,” Peter explained. “Apparently to register for ISO a company has to be able to demonstrate that it has inspected suppliers, to confirm supplier quality standards and so on. So they want to inspect us.”
“I don’t like the sound of this,” Dermot commented.
“They will want to inspect out various storage units and process plants. Especially they will want to confirm that the produce we supply as Organic is truly organic. They are using a consultant to work on the proposal. I have to see their representative and set up a visit with our people.”
“No problem,” Dermot reassured. “We just have to be careful. We deal with a number of cooperatives. We don’t want the Associated Finance buyers to find a way to cut us out of the scene.”
“Don’t worry,” Peter said, “We can work that one out. We sell branded don’t we?”
“Fine,” Michael said, satisfied. “The ball is in your court Peter. Keep us informed. Let us now move on to the next agenda item. Dorothy you have the final item on the agenda. And anyone who wants a coffee or tea just take it on the run.”
Dorothy waited a minute until everyone was settled again.
“Now our pension fund backers have come up with a good idea” she began. There was a respectful silence as they waited.
“They have located a public quoted company. It is called ‘Howlett Holdings.’ It is quoted on the London Stock Exchange.”
“I know that name,” Michael said. “They trade as O’Donoghue’s, the transport company.”
There was a murmur as the others recognized the name.
“Did they have the float behind us in the St. Patrick’s day Parade?” Michae
l asked, beginning to make connections.
“I do believe you are right,” Dermot said.
Dorothy and Michael’s eyes met. Dorothy could sense his disapproval; he remembered that Ann-Marie had made a date with one of the bikers. She hoped it would not spoil his humour for her proposals.
“We certainly do a lot of business with them,” Dermot confirmed, “a good efficient outfit.”
“They have held their Stock Market quotation because Howlett Holdings were quoted in the UK long before Irish independence.” Dorothy continued. They are considered safe, conservatively financed, well managed, but cautious and unexciting.”
“What is the attraction?” Peter asked.
“Transport Synergies are a bonus, but the real issue is the fact that Howlett Holdings have a very valuable commodity, that is a London Stock Market Quotation.”
“Pretty good when you think the major Irish companies quoted on the Irish Exchange like the Banks and Smurfit’s cannot get a UK quotation,” John said in support.
“So if Howlett Holdings took us over we would be on the stock market now,” Peter threw in, tongue in cheek.
“Jesus, hold on Dorothy,” Michael reacted, alarmed. “We don’t want to be taken over. For Christ’s sake, we want to go public and still keep control.”
“I know dad,” Dorothy said quietly. At board meetings she usually called him dad when she thought he was being an idiot, otherwise she called him Michael.
“Tell me daughter?” he said giving in. He could read the signs.
“Through a reverse takeover,” John interjected.
“How much would we have to offer?” Michael asked, a little more respectfully.
“Its a waste of time,” Dermot said. “O’Donoghue won’t sell. We do a lot of business with O’Donoghue. As far as I know the old man is hanging in there. You can be sure Granddad will want to pass the business to his heirs.”
“We have done our research and you are well informed Dermot,” Dorothy smiled tightly.
“Are there other companies like this one?” Dermot asked.
“I am afraid not. This is a real jewel. There are clear links to our business on the transport end and we are of the view that the stock exchange would not block us. We can’t find anyone else especially as we need to link in a synergistic way.”
“There are major tax implications,” John suggested. “Both for the companies and for the current shareholders. Transfers of shares for shares are not subject to Capital Gains Tax. However share sales are.”
“Not to mention other inheritance taxes. My accountants have given me a long-term tax efficiency plan. They call it wealth management. Hence my plans to go abroad for a few years,” Michael said grimly.”
“What is the recommended next step Dorothy?” Michael added, not wanting to go further down the road of discussing his personal plans at the Board meeting.
“Next is to do nothing sudden,” Dorothy joked and they smiled. “We should continue on with our current policy to seek a Stock Exchange quotation down the normal route. However we should consider ways of taking Howlett Holdings over and so accelerate our plans, using that company as a vehicle.”
“Good, good,” Michael said, happy they had a way forward. “End of agenda. Any other business?”
There were no further comments and the board began to gather up their papers.
I have a document for the next meeting, may I circulate?” Dorothy asked.
“Are we going into this now, it’s not an agenda item?” Michael asked looking doubtfully at the unread document Dorothy was passing around with John’s help.
“No, I wanted to hand out the paper personally. These are private papers concerning Howlette Holdings. Don’t leave them lying about.”
“All right,” Michael said, “Now gentlemen,” he intoned solemnly, “you and your reports have budgets for Revenues, costs, and capital spend, working capital. We must stay on budget. Any major deviations to be reported to John or Dorothy. Understood?”
“Understood,” they said in unison.
“Any problems talk in advance to John, any unexpected Financial needs, talk in advance to John. Before taking anything to this Board, I want John to have a position on any major financial before we discuss it in future. Understood?”
“Understood,” they all intoned, looking at John with respect, realizing that John would have to be consulted when they wanted any major spend. Clearly John had full backing from Michael.
“Thank you,” Michael added. “Meeting is ended. Back to the wars people.”
They packed up.
Peter sighed. He hated the discipline of the board meeting, having to be on his toes for such a long time.
He stuffed Dorothy’s final paper into his inside pocket. When he got a chance he would read it at home. He hated accounts.
Back in his office Peter’s secretary stuck her head around the door with a smile.
“Peter. We have a consultant waiting to see you. She says that she has been commissioned by Associated Finance. Mentioned ISO Registration. A Ms. Janet Simmons. Will you see her?
Chapter eight
Peter sipped his coffee and waited. He was expecting some serious middle-aged factory inspector type. He was pleasantly surprised when Janet Simmons was ushered in.
Janet was dressed in a brown suit with a short skirt. The sight of her took Peter’s breath away. Janet was inwardly amused at his obvious reaction to her appearance.
“Coffee?” he offered.
“Please.”
Peter lifted an eyebrow to his secretary who went to get the coffee.
He indicated to a chair at his conference table and Janet sat down. Peter had a quick look at the papers on his desk while his secretary brought the coffee for Janet.
Janet was highly nervous, something which was not given away by her outer appearance. This was her first contact with O’Byrne’s. She had done her homework on her ISO Registration cover story and she was confident that her story would hold up. Despite having seen his photograph in the local newspapers announcing his appointment, she was surprised at Peter’s youthful appearance. Young for a Director, but she decided, as the boss’s son not unexpected.
Crawford’s parting words were clear in her head. “You are in the big league now girl,” he had said, “Pull off this deal and you are in for a six figure sum as discussed.”
She had not liked the way he had spoken, “Use all your talents,” he had instructed, “the stakes are high. Get set up in Dublin. Then contact me. I will come to Dublin once or twice to get first hand progress reports. We want to pull this off in three months at the outside.”
Six figures in three months if she could pull it off. Janet had thought of nothing else since. She had to pull this one off, it was her big break, however it was lonely setting up in a strange city, if exciting.
“Now what can I do for you madam?” Peter was asking.
“Not madam, Miss, I mean Ms Simmons, or Janet if you prefer,” she corrected as he came and shook her hand.
Peter brought his coffee and went to the head of the conference table. He appraised his visitor over his cup as he sipped his coffee, which was beginning to get cold.
She uncrossed her legs and simultaneously leaned forward to pick her cup of coffee from the table. Peter had a momentary glimpse of soft thigh and then a split second glimpse of cleavage as she leaned towards the cup. All in a split second and he was mesmerized. Was it possible that she had nothing on under that suit?
Janet smiled pleasantly. She sensed that she had his attention and could do no wrong. Funny, it was the same with Mr. Crawford, except he was old and ugly. This one seemed a bit immature but was very attractive in an unsophisticated provincial sort of way and pleasant to look at.
“ISO Registration, you understand that Associated Finance is seeking registration in the retail area?” she said.
“Yes, I was briefed when I spoke to Central Procurement at AF.”
Janet smiled warmly. “The
refore you realize it is necessary for us to inspect suppliers.”
“Of course.”
“First Mr. O’Byrne...”
“Call me Peter.”
“Peter,” she smiled some more. “First your product range, may I ask you some questions?”
“Of course, but Janet please tell me, what is your role?”
“I run a small consulting business. We are a specialist firm and are retained by Associated Finance in connection with registration for the International Quality Standard, better known in Ireland as ISO.”
“O.K.” Peter said agreeably “ask away.”
“This questionnaire will take about an hour and a half. It is fairly comprehensive. Also I will need to visit one or two of your processing plants and storage units.”
“An hour and a half?” Peter was shocked as he realized his lunch might be delayed.
“Sorry, is that a problem? You were warned I would need some of your valuable time. If necessary we can split the interviews. There are sections to my questionnaire. It is one our consulting group has devised and we are very proud of it.”
“What happens if this quality assessment goes our way?” Peter asked, attempting a mature shrewd expression.
“Then rest assured; there will be a recommendation from me to the Associated Finance Procurement Director. This could result in you becoming a supplier for long term partnering and as you would expect this would lead to a substantial increase in business over the long term. AF strongly believes in partnership with suppliers.”
Twisted Love and Money Page 5