The Role of Ethics in Treasury with Gary Slawther

Foreign.

To this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week I talk to treasurers about how they've built their careers, where they are now and where they see both themselves and the treasury profession. Going to next this week's show. Delighted to be joined by Gary Slaughter, currently the interim treasurer. Eddie Stobart, Logistics. Now I'll get Gary to describe the business, but just giving a couple of headlines. I mean, huge logistics group, I mean some of the numbers kept us going through the COVID crisis. I mean, I'm just looking down here two, well, nearly 3,000 vehicles, 43 centers, 6,600 employees. But also, you know, Gary can describe the business it is now and logistics and a lot of things that happened. He's got a rich and deep history. We've known each other for many years and I'm going to take him right back to the dim distant past, if you can remember way back when, to the days when he started Grant Thornton before he even discovered the joy that his TR.

Treasury.

Gary, it's over to you. It's your show, sir. Over to you, sir.

Thank you very much, Mike. That's a lovely introduction as ever. I think it's as I was saying to one of my colleagues the other day, when I started off at Grant Thornton, we had pencil and paper, there were no computers in fact when I started, and some people will be shocked at this sort of thing, when I started, the first thing you got was a desk, a telephone and an ashtray. That was a very different office from the one we might see nowadays. But I guess, you know, why did I end up there or why, why didn't end up in chartered accountancy in the first instance? Which was quite easy to answer because I'd been to the university career center and it was 10 minutes till opening time and the chart accountancy form was eight pages long and the Greater Manchester Police application form was 32 pages long. So I knew which, I knew which one I was going to go for. So yeah, I joined, I mean really joining a mid tier firm. I know people go, why did you, why did you join this? Because, and I guess this is a real treasurers type thing to think because I wanted to be in the of the action. When you join a firm that's not quite so big, you're getting more responsibility early on. You're not spending the first three years of your career auditing the stock section of bp, you're getting right into there. And like I say, that's a Real treasurer's attitude. And in fact after a couple of years I realized that I didn't want to be a chartered accountant really. It was a treasurer. It was something else I wanted to be. I hadn't quite got there. I knew I wanted to do something involving finance and finance proper and I want to be at the heart of looking forward in the business rather than looking back. So I ended up doing a little bit of a stint in corporate finance. But like many corporate finance people in 1990 when there was a little bit of a recession on end up in the insolvency department because it was just the flip side, the same coin. And to be honest I think everybody should spend a couple of years working in insolvency department because you can see just how quickly things can go very, very badly wrong. Companies not collecting their money in companies just saying they're investing in something when they're actually just spending it. Giving big strategy with poor execution. There's a whole load of things just basic risk management. So we begin to see a little bit of a theme emerging here as we, as we go on so spent that while in insolvency but then decided look I need some, I need some time in industry. I need to learn how a business works. I need to get in the nuts and bolts and eventually end up at a company called TNN Turn Renewal. @ the time were a big automotive components business but were also the world's largest manufacturer of asbestos related products. I always end up in the best places. In fact I'd end up down in asbestos mine at one time in Zimbabwe. Mata that's another another string to my bow. Like I said where angel spear to tread. That's where I'll turn up now by this time this isn't. We're now at 1995 and I was eight years in the profession and I thought I knew everything about everything. I thought I know it all. And I started off, they got me to do an audit of NatWest Bank Line which is still going as RBS Bank Line I think it is now but NatWest Bank Line. So back in 1995 they sent me upstairs to the Treasury Department and I went and ordered the system and said these are the things I think, you know, slight weaknesses, control issues, etc. Etc. All went very fine and said that was very good. Gary, can you, can you just go and audit the Treasury Department? So I said yes, sure. I can't. Like I say, I knew everything about everything. So I went upstairs and sat there and Paul Arnold, the Treasury manager with all the usual happiness with Manchester City supporter about him, sat and kindly answered my questions. Lovely fella. And we sat there and I said, so what does it actually do here in Treasury? And he said, well, we manage financial risk. I said, that's very, very good. I said, so how do you do that? I mean, when you talk about financial risk, what sort of thing are you talking about? And he said, well, mainly it's foreign exc. And we use mainly forward contracts. And I went, oh, right, yeah, Ford contract. That's the market's view of where currency is going to be in a few months time. And he just put his hands over his eyes as if to say, too long, I didn't know the difference between the Ford contract and the future. And I sat there and I suddenly realized that I knew absolutely nothing about absolutely nothing. And I thought, you know what? I should really learn about what I'm talking about before I open a big fat stupid gob. And so a couple of months later, the Head of Audit got this brochure thing through the post, saying the auditor and treasury, and it was a conference down in London and he said, looks fancy going on this. I said, yeah, sounds great, I'll go down. So I came down to London and walked in and it was very enjoyable, but of course, the ACT had the stand there and I went and I looked at the syllabus and this might sound very, very sad, but I opened it up and I looked at and I thought, c' est moi. This is what I actually wanted to do all along. It wasn't all the debits and credits, it wasn't all the SSA ps. It was proper, real finance. Real finance with proper money and making businesses happen and planning for the future and seeing where the cash flows are going to go and how you're going to fund and invest in this. Because this is it. This is what I want to do. This is what the set I couldn't do and I can. I want to do it. So I got very enthusiastic about the whole thing.

Yeah, rightly so.

And it was one of those things where I've never enjoyed a set of exams in my life, apart from those ones which meant that I got through as easily as I could. Because with the ACT exams, I was studying stuff on a Sunday. I could go into work and implement on a Monday.

Yeah, I'm passionate about it. Yeah.

Yeah. If you understand it, know it. If you understand why you're doing this, that and the other, why you're transferring money here, why you're entering into that contract, what a swap really is, how the swap mechanics work, what the maths behind it are. They teach you how to. To read the page to the Financial Times. How clever does that feel? So all of these things, suddenly it became real life. This is what I really did. And that was it. There was never going to be any looking back from there because now I could start to be involved with the real nuts and bolts running of the business. So I took my treasury exams, you might notice, a couple of years in common. I took my chartered Accountancy exams in 1990 and I took my treasury exams in 1996, both of them big football finals, both of them, where England did quite well. So for 1990, in Italia, I'll put it this way, one of the people on my course, she didn't pass her exams and she was on a recent course with another friend of mine who didn't pass his exams, whereas I had. And she said, you know what? Life isn't fair. That Gary Slaughter just sat there drinking beer and watching football. And he went and passed. So I thought, if it worked in 1990, it'll work in 1996. And it did. So it was. But I guess the only reason was because a, I enjoyed it. And the other thing was with the act, now, this might sound really, really cheesy, but they're big enough to be a professional organization, but small enough to care, small enough that you feel a part of that body. In bigger professional bodies, you can sometimes feel a little bit like a number. But in treasury, you actually feel like this is your profession. And very often, as I found through my career, you might be the only member of the ACT someone ever meets. So the entire view of that organization is formed by you and your performance, your behavior, how you get on, what you bring to the party. You're an ambassador, you're a real representative. So that went very, very well. I joined the Treasury Department under the tutelage of a fantastic treasurer called Matthew Topham. Really, really, really clever, Bob. It taught me an awful lot of how to think about treasury in the context of business. You have to think of things. What's the real risk in the business? Not how can I use this really fancy instrument that some bankers turned up with to manage risks? Because you'll go wrong. He taught me. One of the lessons he taught me was a very, very simple lesson. If you don't understand something, say you don't understand something, because you will never look more stupid than if you don't understand it, you implement it and it all goes Wrong. And you can't explain why. I can remember there was one conference, must have been about four or five or 10 years ago, and there was myself and the great Riyadh Hammad, who was Darab Tech, and Declan Soy. And the three of us sat there and someone was going up Bitcoin. And this was sort of in the early days of it, and I said, the Riyadh said, do you understand it? He went, haven't a clue, Declan. No, haven't the clue. Between the three of us, we had about, about 90 years of treasury experience. But we were quite happy to admit, look, I don't understand this. And so. And sometimes if you don't understand things, there's a reason why not. It's because they don't stack up. And again, one of the things I love about our profession is that we question. We don't just take on face value, because we can't. Because if we get it wrong, there can be really disastrous consequences. It's not like if you sort of get your debits and credits in the wrong place and someone has to make a journal adjustment. If you get something wrong, that can mean real pounds, shillings and pence. If that means real money, that can mean real people's jobs. That can mean the future of the business. So a little bit of, you know, it concentrates the mind a little bit, but it's a brilliant place to be. So I was at CNN for, oh, in total about three years, and they got acquired by a US outfit called Federal Mogul and they asked for volunteers for redundancy. I seen a position advertised and I went for it and I got it. So I not only got the new position, I got my voluntary redundancy as well, which worked rather nicely. A little bit. A little bit of luck sometimes. But TNN had been sort of a business that was ripe for being acquired. Once they'd nailed down the asbestos liabilities, then it was definitely in play and it was going to happen. The US company acquired it and they didn't need two treasury departments, didn't need one in the US and one in the uk. So it was clear that it was, you know, that the writing was on the wall. Tascapa Group. And it was actually a very, very similar business in many ways, in that it started out in the. In the. In the mill towns of Lancashire, and the operating units were very autonomous. People were being given their own head to do what they want. They're invested in and told, look, you deliver return. The investment. Very, very different from the more centralized model. At cnn, however, and we were putting in place a number of sort of areas to coordinate around the business. I put in a designed system myself for how to do the foreign exchange cover. And you know, it was, it was something that I could really get my teeth into for after about 12, 13 months I realized, hang on, this is going, this has gone the same way as tnn. This is going to be an acquisition target. And you know, I saw an opportunity somewhere else and I'll be honest, I thought, I don't think there's going to be a role for me here for much longer. And the person who replaced me was gone within I think about four or five months because it sold off 60% of the business and the business shrunk and it didn't need a, didn't need a Treasury operations manager anymore. So I thought, right, I went off to my new role, which was in many ways sort of the start of the focus of my career, which is being, which ends up being special situations. Matalan, big retailer just recently IPO'd on London market. They've been told by Wahlberg's, look, you need a Treasury function. And so I came in to set that up and it was a business that was growing incredibly quickly. Now high growth situations can become very high risk situations because you can end up running out of working capital. And there were a number of areas that I was able to address in the business. Just simple things like they bought forward a whole load of US dollars because they were buying mainly from the Middle East. Most things were priced in US dollars. What the business wasn't aware of at the time was currency swaps. So they've run out of sterling and holding dollars that they might not have needed for another 12, 18 months. And said, I said, well, why not just swap back from dollars and sterling? That takes an FX risk. No it doesn't. You're working off the same swap. It's just the interest rate differential. Ah, didn't know that. And you're thinking, wow, I can bring some value, I've done something that's useful. So we had, you know, eventually, so we freed up the cash and carried the business on. But it was real, real high growth. I mean, that operate. I mean there was at one point it was opening a new unit every two weeks, you know, these big sheds out of town it was. And just the whole supply chain, if you like, the whole logistics chain of the business was stretched. Things like, we struggled to get enough card readers, doors, just simple little things. But this is where, you know, this is where you really start to start to realize, A, you're at the heart of things, but B, these are very practical things that you're dealing with. These are things in life that happen. So as well as doing all the, all the sort of, you know, in our exams you might do all the fancy darn structured bonds, but in real life you've got to do the things like make sure there's enough card readers, make sure you've got enough cash in the tills. How does the money get collected out the tills? Checking how long it takes for the card acquirer to give you their money. We did a bank tender and we got the card acquiring cash down from a three day cycle to a one day cycle. We sent off the files at night, we got the cash the next morning. That's a big win for a business and that's something that really, really matters. And again, that's why I love being at treasury because everything in the company will always end up as being cash. So if you're sat at the middle of that web, if you're sat at the heart of the cash, you will always be at the heart of the business.

One of the things, Sorry, I'm going to jump in here, Gary. And people would tell this, you've got this passion about treasury, everything else. Now if they, they're looking through your LinkedIn profile, we've got guys listening to this from across the world and you, you know, if they look, they'll see that you've been referred to as a troubleshooter in the past. You'd love to jump into these situations, sort the stuff out, get in, sort it out, move on in in a positive way. You were making, you know, some, quite a number of moves, relatively early stages of your career. Now there'll be people listening today. You know, I spoke to a lady yesterday, she's been sort of four years with an XGE company and you know, spun off and you know, she's thinking about the next move. There'll be another three years and maybe be five years. You were making these moves every couple of years. Boom in year and a half. Sort out. Great next, Talk us through, you know, if you can carry on this theme. But I want people to understand why you've got the guts to do it because it's, it's great, you know, it's fantastic. It's not like, oh, I'm a job popper, can't do, it's quite the opposite. You go in, make a change. Right, I'm done guys. Here you go. Is it Fixed.

It's, I mean, in many ways it wasn't necessarily intentional thing. It wasn't what I'd set out to do. It was, you know, was looking to establish a career. But as I always say to my daughters, your career path is up to you. HR departments aren't there to look after you. They are there to get the best out of you for the business. That's what they do in many ways. They're the maintenance department that looks after machines. The machines just happen to be humans. So if you think that, like I say, it wasn't deliberate, but it was how I at the time saw my path to where I wanted to get to at the time. I want to be a cfo. That's where I wanted to be when I grew up. And I thought, I'll try and get as much experience as I can under my belt. Now I could have got that at going into one business and staying there for years. A business that had, you know, a growth path at something, that something I would be able to do. I didn't necessarily have that debris place. Plus you reach a stage where you kind of stop adding value. Now being an employee is a two way thing and companies will. The only reason why a company ever employs an employee is because the value that employee, employee brings is greater than the cost of employing them. Simple as that. And the lower that cost is for the greater value add, the happier the employer is. That's how life goes. So sometimes I thought, am I still adding value here? And as we go through, you'll see that I've had people who come in behind me who've been absolutely fantastic at doing the job and you bring in the right people. I mean, it's a little bit like private equity. Private equity will very often look for its exit route even before they started. And as someone who's interested in their own career, I'm interested in other people's careers and I want to make sure there is always a replacement for me. There's always someone who can step into my shoes in some ways to make life easier for myself. Because if that person's coming through and I can pass on the work to them, I can focus and concentrate on other things. So it's very much a, it's a dynamic situation. So I came into Matalan, I set the treasury function up, wrote the treasury policy. I believe that the ACT still use it as an example of a good SME policy, put that in place, got the structures in place, got the people in place and in some ways it became where it should have been. I mean, Matalan is not a complex business. Buys clothes and sells clothes. That's what's at the heart of it, and that's its business. Its business is not treasury, its business is retail. And one thing I did learn about retail is that retail is all about buying, not about selling. So you're looking at your supply chains and how you fund those supply chains. What we found was that in the Far east crisis in 1999, we were able to maintain our supply chains going because we gave our suppliers lets of credit. Now other buyers were just paying cash. And the problem was the suppliers couldn't get the raw, couldn't get the materials to actually make the clothes with. It was a little bit more expensive. But we gave them letters of credit which they could then dash down the local bank with have, say, an HSBC or a Barclays letter of credit and immediately get their funding. So you're not just thinking in terms of cost, you're thinking in terms of commerciality. How does this business operate? What makes money? Well, it made money through buying and selling clothes and someone had to manufacture those clothes. And so they supported their supplier base and they did very, very well with it. So as ever, in every single role that you go to, you're learning all the way through, you want to pick up and pick up as much you possibly can. I was then asked to replicate what I'd done for treasury by setting the shared service center. And we made a on that. But to be honest, I didn't quite see the rest of my life running, running AP and payroll. And what I had done was fortunately, and brought a very good assistant behind me, Jill, who was absolutely brilliant. And she stayed there for, gosh, that's what, 20 years after me. And so it was a little year or two ago, I'm still in touch with it, you know, that was again putting in place because you always want to leave a place better than it was when he came in. So I put in place a Treasury function that I felt was so easy to run, it didn't really need me, I was too expensive for that treasury function. And I guess that one thing I've always felt is that if you build the right experience and if you build the right achievements, you need never be afraid of being unemployed. You will always be able to, you always will. It gives you confidence. And so Matalan put everything in place and I felt in many ways, look, my work here is done. And so I moved on to. I then got a call to go to Princes in Liverpool and Again, there was a particular issue, that's why I went in for that issue, which was that implemented SAP and there seemed to be issues of foreign exchange. So I sat and scratched my head and my colleague Catherine, Catherine Medley, who is the assistant treasurer there, who's fantastic and is still the group treasurer there, we sat and scratched our heads and couldn't quite work out because as being a foreign exchange problem. Then we looked at some of the processes and again we're getting back to just the basics here. We looked at how the bank reconciliations were done and the sterling side was done in Liverpool and the foreign exchange side was done over in Bradford and it didn't quite tie it together but we still couldn't work out what the problem was. And there was one day, Catherine brought me the bank reconciliation for the eurocount sign off and I said, hang on, the balance on this account is 7950 pounds or whatever it was in sterling, but it's zero. In euros, zero can't equal 7950. Even with my maths, I can work that one out. So why was that? So the FX difference. Well, it shouldn't be because everything we do in our business has a known foreign exchange rate. It has to because the nature of the business is very, very thin margins. So again, we're getting back to the commercial here. You're working on extremely thin margins, maybe as low as 1%. So you cannot afford for there to be a foreign exchange difference. The second that the deal was done, the foreign exchange cover was put in place. So we had lots and lots of very small deals and we looked at reconciliations and there were some transactions where there wasn't a rate where there should have been. And I said, it's just a simple cash book issue. I said all we need to do is have effectively a four column cash book or six columns really. You've got your euro value, you've got your exchange rate that we know and is on a foreign exchange contract and you therefore you've got your sterling value. That's how it should work. And it was simple, it was an accounting problem. I can remember I started off doing, I started off doing a sort of spreadsheet in the system to show Catherine, you know, how I thought she worked. She went, no, no, Gary, Gary, you've done your bit, you've done the thinking, now leave the work to the grownups, will you? So that's what I did. I sort of thought that felt again an achievement. I felt quite happy and it got the business back into stability, got the treasury function back at stability, I identified another few things about the business on the transactions that were a little bit of an issue and we solved those. And after about. After a couple of years, I said to Catherine, I said, you can run this easily, you can run this in your sleep. And she said, probably could, Gary. And so that's when I got a phone call elsewhere and someone said, look, Michelin in Stoke on Trent, looking for someone. So I went there and that was really interesting. So I think this was the first time when I'd really operated as core part of a multinational group, Princes, as part of a multinational group, Mitsubishi Corporation, but again, quite autonomous, whereas Michelin was very much your real multinational. And I had a lot of dealings with Switzerland, where the finance center was, and I got in there and that was taking over and someone was retiring. So it was already an established system in there. But the real issue that the business was facing at the time was on its pension scheme, it's defined benefit pension scheme. And with the previous treasurer having been a trustee, I then became a trustee. This was really interesting because it was not, if you like standard treasury stuff, but it was all the stuff we'd learned about in our exams about investment theory, how capital markets work. Because in essence, a defined benefit scheme is just a big bond portfolio because you've got your cash flows and your liabilities and you've got a reasonable idea of when those cash flows are going to happen. And the actuaries will advise you on essentially when those cash flows stop when someone dies, or then it becomes spouse's pension and then how long the spouse expended to live for. So it's all very mathematical and very bond like. And this was something I hadn't dealt with before, but I knew the theory. I might not know the words, but I know the tune. So I got myself really involved in this because I thought, right, this is, this is a massive risk and it was at group level, a very, very high risk because there were two big pension schemes that were really could have harmed the group if they really had a bad time in the US and the uk. So. So I got myself really stuck into there and again, I felt I added value. It was an interesting situation to be in because as a pension trustee, you have a legal responsibility to the pensioners, not to the company. So even though you're an employee, if the company feels that a particular strategy would be the best thing to do in the company's interest, but you believe that a particular strategy is in the best interest of the pensioners, you've got to act in the best interest of the pensioners. And again, one of the key things that start to come through is I learned that sort of independence of mind is very, very important. Like I say, if you don't understand it, don't do it, no matter how much people are saying you should or you shouldn't do it. And treasurers have to be very, very independent because they have to really judge things and say, right, is this the right thing or the wrong thing to be doing? And most of all, you really start to understand what ethics mean. And that crops up later in my career, ethics are incredibly important. Without them, we have absolutely nothing. You can have all the technical skills in the world, you can have all the abilities in the world, but if you don't have the ethics, we don't want you. And that's one of my big messages all the time. So I've got the pension fund restructured. I was also involved in the centralization of a number of functions. We were going to centralize the treasury function into Manchester for the whole of Europe. We started off on that exercise and it was decided actually it would end up in Switzerland. And that wasn't quite, at the time, two young children. That wasn't where I really want to be. My wife wasn't too happy. And so she said, look, I think that probably again, time for a move. You've done your time, which, you know, but I carried on. So I got a phone call from someone saying, Gary Jarvis. I said, yes. I said, look, it's a big restructuring. And I thought, I like the sound of this.

Yeah.

Rise up your screen background. This is a challenge and I'm always up for a challenge. Said, this one is not going to be easy. It wasn't. But it was really the springboard to the next stage of my career. Jarvis was a tough going. It was a business that had been through some very, very difficult times. We're continuing to go through difficult times. It was going through debt for equ. Swap. It had a strategy which hadn't succeeded as a CEO once. Work with said businesses don't fail due to lack of strategy, they fail due to lack of execution. And that is what this, that's what happened there. I was working for the first time with an interim team. The cfo, Alistair Marnick was fantastic and Alan Lovell, the CEO. I mean, these were people I really, really learned something from, really learned how to understand. Then Shell Carlson, who was there as well, these were experienced people who I was just, just drinking it in and understanding how's this whole thing going to work. So we did the debt for equity swap. It was very clear that we still needed more working capital but at the time that business was toxic and we couldn't get any from anywhere. And so this is where, you know, never throw away a business card. So a friend of a friend said, speak to these people, they used to be at Commerce bank, they're now called Border Financial and they might be able to help. And I can remember the meeting now, it was 10th of February 2006. I went in to see them start describing the business, talked through. Fortunately by then I had an understanding of how commercially the business worked. And I remember Nigel Hogg saying after an hour he said, yeah, I think we've got something here. To the extent that Alan Lovell phoned me up halfway during the meeting and I ignored his call. Then I explained to him afterwards why and he said, you probably made the right choice, judgment calls. I one of those things that you have to make. So I managed to get an asset backed facility in place. It took about four months during which time the trading results worsened, not improved. So each month that went by it was getting more and more difficult get this deal over the line. But eventually I did and we got it over just in time because there was a working capital facility in place that was very expensive. It was Libor plus 18% at the time, plus a big exit fee for the bank if we didn't refinance at a cheaper rate to protect the shareholders at all. I also spent during that period a lot of time with lawyers and learned my way around LNA documentation. That was an invaluable lesson. I also had a very good friend, J.H. mistry, who he is Mr. Documentation. I mean if anybody can review a set of documentation it's him whilst watching cricket. And it's a fantastic skill that he has. So we got through that particular bit of financing. Within a few weeks it became quite apparent that the financing wasn't enough and Deloitte were brought in to do a review and it was a tough, tough, tough time. We decided to go for an equity raise that would be an investment equity raise and we had to prove that to the investigating accountants. That proved to be more difficult because someone who shall remain nameless made a whacking great error on a spreadsheet. I remember the phone call I got data clock at 8:30 at night from a gentleman at Deloitte saying Gary, the spreadsheet that you did. That's right, that was me there seems to be a slight error in it. That slight error effectively doubled the headroom that we had on the asset backed facility, made us look extremely liquid and solvent and was wrong. Took me six weeks to get everyone back on board. We eventually completed the equity raise in March 2007. However, once we've done the equity raise, the business now liquid stable and heading in the right direction. Not only that, I'd been fortunate enough to I inherited a young gentleman called Russell hall who really wasn't enjoying his work and I think the business, you know, there were redundancies happening. I think he was next on the list and said, look, would he be able to help you out? And just like me, he found his niche, he found where he wanted to be and, and it was brilliant working with him. We need an extra pair of hands and that's where the brilliant Kate Telford Usher is now. Kate Smedley turned up. And between the three of us, with our other colleagues who were there, I think we managed to do a really, really good job. We set a Treasury function up that was robust, that worked for the business. The cash flow forecasting that Russ put in place was just, it was masterful. And so when John O' Kane, the FD, said to me in December 2007, Gary, we told the city, we're going to cut costs by 50%. Can you have a look at your department and see who's nice to have and who's really, really needed? Well, Mary, who did the cash was really, really needed, Me, who pounced about a bit and sort of, you know, attended a few meetings, wasn't really all that necessary. So it was a, see, you don't want to be you. And we partnered company very, very happily, to which I then went off to Speedy Hire and Newton Louillo's. To be honest, that was probably not quite the right move.

Not big enough time.

It was. The thing is that it wasn't quite me that it needed, it was actually three people that were needed. And I realized this after just space of a couple of months. And I also sort of ended up crossing between two CFOs because the old CFO who'd recruited me was actually on his notice, period anyway, and a new CFO started and I said, the new CFO said, look, do you know what? Having spent a few months looking at this business, this is what you need and this is not me. And for the price of me, you can employ these three people. So I said, I think this is what you need and you've got some good people here already. Who can pick up this, this and this. That's when I sort of moved off. But just before I moved off, one of the roles they brought in was someone who was doing interim. Wonderful. Bob Tonkiss. And we sat for a couple of days and I said, by the way, how much do you get paid for this? And he said. He told me his day rate. And I said, how much? I said, said, I've been doing. You're doing a third of my job for more than twice my salary.

Yeah.

He went, yeah. And I said, all your expertise, Gary, that's what you meant to do. He said, you build up the experience, go and cash it in. So that's what I did. I moved on to interim. And I got a phone call at the beginning of 2009 from one of the people who'd worked with Burdell and the Jarvis deal, and he very kindly said, look, one of our clients, they've got a lend at the moment. There's a bit of a struggle going on. Things aren't quite as they should be. Can you go in and have a look? So I went in for what was meant to be three months. Anyway, two and a bit years later, I left. And that was working with the. With Douglas Bay Capital, who are now DB Advisors. And that was on the turnaround of tdg. Another tough gig. One thing that did, again, you never, ever stop learning. I didn't really understand how private equity worked and how private equity thought before I went in there. And it was once I was in there and speaking with the DBT and how they perceived things, how they saw value add and how things worked, that's when I really understood things. And they talked about the asset light model. And again, it was very, very commercial. I got involved in the property deals because all the properties were secured. So we had to have a good story for the lenders and that. It really started to pull things together. And for me, it was a real compliment as well, because I stayed there for all that time they were paying my day rate and it was. I wasn't there for free. I wasn't there free grass for nothing, to the extent that actually ended up working on a couple of other things with them, one of them over in Tampa in Florida, which was, okay. So anyway, I left there and I was due to start another gig, which didn't quite come off. And I just got a phone call out the blue, saying, gary, have you ever thought of Oman? And funnily enough, I said no. He said, well, there's a company in Oman, turns Out. This fellow who called me up had seen me speak at the conference a few years before. I couldn't remember him, but John and he was lovely bloke and he said, look, are you interested? So I met with the CEO when he was on a stop off in London. Two hours of whistle stop interview. That was about 18th of May, beginning of June. I went over to Oman for an interview with the main private equity investor and the banks. And by the 30th of June 2011 I was living in Oman. Lovely country, fantastic place. So I ended up there in a company that was meant to be doing an ipo. So that was my next special situation. Next special situation was from a turnaround troubleshooting. Yeah, great. This is superb. Anyway, it didn't quite end up like that. It ended up that after about 12 months I realized that the business was running out of cash because the industry was changing massively. It was in pet industry, polyethylene terephalate, which is the plastic that you make water bottles out of and the industry, the margins back in 2009 have been at times $400 a ton. China had realized there was a lot of money being made and built some massive plants manufacturing pet. And at one point the margin was down to $15 a ton. @ that sort of swing you can't make money. And the business was running out of money fast. And so I worked with the investment bankers at Bank Muscat and the legal advisors that we had at amj. The one thing that really took me quite back, you'd think, all right, I'm out in the far side, the Middle east here. Probably the advisors aren't as sophisticated or whatever. I was getting advisors there that were as good as anything as you could get in the City or Wall street were really, really good, especially the team at Bank Muscat. Absolutely fantastic. And on the day that we were due to default on the debt, we completed the refinancing. And again that had taken a lot of persuasion of people, a lot of selling of the business. One thing I did learn on that one was really use your advisers well. Whilst you might think you can do everything, you can't. And if you've got a good team of advisors, use the them, make the absolute. Most of them don't try and think that you're the brightest person in the world. I can remember one, one meeting went to in Qatar for a facility and my very good friend Vishal was sat there and I start to talk and I could tell that he was just want to take A bit of a lead on this whole thing. And he did and I just sat back and left the floor to him. And we'd gone in having just been refused by credit and walked out with a 50 million dollar facility. That's when you think, do you know what? That's how you use your advisors. He was in his element. The shale was just absolutely fantastic. We got this thing sorted, we started to get the business back onto its feet. But again it was a very, very volatile time in the industry. And then 2014 the oil price collapsed. Now I won't go into the boring nature of variable volatility on the price of oil and the price of raw materials for the pet. But the price of PET plummeted. The problem was we bough lot of inventory when the price was substantially higher and we were sat on the whole thing. And again, working with good people was the way that you get through these things and working as a team was how you get through. My very, very good friend Dan Norfolkaard and I spent many a long night just making things, just getting to know what was really going on and understanding the absolute heart of the business. Because it needed letters of credit. It wasn't the cash really that we needed letters of credit to buy the raw materials. We struggled our way through and we got there. The business pulled around. Now just going back to what I mentioned about ethics when I was at Jarvis, there were days when we didn't think we'd be able to pay the bills, when we thought the business is insolvent, we can't do it, it's just gone. We can't pay the wages on Friday. But we thought, well, if we get some more availability from the asset backed facility, we'll be able to survive. But we can't do that without maybe twisting the truth a little bit or without doing this, without doing that. And we used to, me, Kate and Russell used to sit there and we have hour or two hour long conversations about the ethics of whether you know of what, of how we should present information of what point was that line. At what point was it doing the, doing what was needed to keep the business going and what point was it line? And that is the absolute crux of our profession. I can remember one day being on the phone with banker and we had an incredibly stilted conversation because we were talking about it, right, there's disallowables and I had to send a report of disallowables. If I hadn't sent the report in, our facility would have gone down such that we wouldn't have been able to pay the wages and that would have been it. But I knew that we had some certificates coming on Monday that would allow us to refloat the facility and we had three days grace if there was a technical issue. Now, now in truth the report actually wasn't properly complete anyway. So I said, the banker said, look, we haven't quite completed the report yet and I'm not sure when we'll have the information. He knew the situation but neither of us were going to say it. But we had this conversation. He went, well, do you think on Monday you will have the information? Yes, I do think on Monday I will have the information. And he was taking a risk that if we'd gone bump over the weekend he would have had to answer some really, really serious questions and he was taking it on trust that we would still be there on Monday and we were take that trust away, take that, take those ethics away of doing the right thing and we have nothing. We have absolutely nothing. So that was, you know, that was something that came all the way through. Now one of the things when I was at Dr. I felt there were certain. I had views on Mint CEO used to have long discussions and I had certain views on things and he had certain views on things. I wasn't convinced that the business was really, really, really going concern. He was and that's, you know, CEOs are going to. Treasurers can sometimes be a little bit less on the optimistic side, more what we feel is the realistic side. I said look, if I in my heart, heart don't believe that it's going concern and I've got no doubt that you genuinely do believe it. So we've just got a difference of there. If I don't feel ethically comfortable, I can't stay here. I can't stand in front of banks and in front of investors and ask them to put money into something where I don't think they will get their money back or they'll get a return. And he said look, that's your decision to make, that's perfectly up to you. And so I said look, all the very best of luck. But ethically I can't continue with this. Let's say we parted on very good terms. I went to Dubai to try and start up as an interim because there was no real interim market in Dubai and I, I thought, thought I'm going to start one anyway. After a few weeks it was quite clear that that probably wasn't going to happen. But coincidentally I got a phone call From a contact of mine who said, gary, who is an investment fund, he said, gary, we've got an investment. It's been through a really, really, really, really rough time and basically there's no one stupid enough to go in there. Would you do it? I said, why not? Why not? So I went into Arab tech and I think you mentioned before, culture and businesses have their own culture, but working in uae, one things you notice is you've got people from all over the world. Whilst we all seem to be the same on the surface, there are different cultures and different ways of communicating. What you then find is that you might all be speaking English, but you all mean something completely different. And the nuances of how different nationalities and different cultures will say things you really have to pick up on, you can't. I don't think you can survive for any length of time in the middle. If anyone's thinking of working in the Middle East, I'd say, yep, go for it. Great. Bahrain, Qatar, all these places really super to work in. But you have to make yourself culturally aware. From pretty much day one, you've got to understand the nuances of what people mean. And the Arabic nuances will be very different from the Indian nuances, which will be very difficult from American nuances or European nuances or even the difference between, you know, the British and the French. You know, we all sort of have those slight, slight differences of how we do things and how we communicate and how, you know, I mean, I can remember one of my colleagues who, she'd explained these things to me of how for certain cultures I was being too nice and said, they're not going to listen to you, Gary, because unless you sort of A, speak in words of one syllable and B, make it very, very clear to people and C, lay the law down, no one's going to really take you seriously. And that speaking in words of one syllable was an important one because many expats in the region have an English vocabulary of maybe, say 1500 words. So if I start talking about lugubrious nature of the antipodean way of working, they will go, yes, they will not quite understand it, but they will just say, yes, and I'll think they understood. You say they understood, but they won't understand the thing. And so it's like I can just about get by in French if I speak to a non French speaker, but I can't get anywhere in French speaking to a French person because they speak too quickly. The vocabulary that they're using is much, much broader than mine. They Will use grammatical shortcuts. I'm just stuck. I can't understand. And you've got to understand that although everyone seems to speak English, they don't speak English like you speak English. The idioms, the, you know, sort of. Especially when you're a Geordie. I mean, you know, some of the. No one's going to start a Geordie with them. So. So it was. So you learn very, very quickly to pick up on just how people are feeling. The body. The body language. It was a tough culture to work in. Arab tech, I would probably say, for the first time in my career, I. I could almost put that I failed. I didn't do what I set out to achieve, achieve. And that was in many ways kind of tough to take. But again, you can't win everyone, you can't win every single time there. And whilst we did get the business refinanced, it wasn't as I felt it should be. And it didn't really put the foot in the business on the foot. And they wanted to put the business on the foot, on the footing it was meant to be.

You say that you didn't. You wasn't five minutes.

You were there two and a half years.

It's not like, oh, came in. Oh, yeah, no, it's not working. You know, a couple of months, two and a half years, you did the job you could.

And then I gave him the very, very best shot. We did a refinancing on bilaterals and kept the business afloat. It worked. It didn't work the way I wanted it to, but it worked. I knew there were people there who could manage the business. I mean, I mentioned my good friend Riyadh. He was. He's a super character and he knows his treasury stuff. So I knew that, look, he'll be able to carry this on. He's Palestinian, so he understands the region and the nuances of the region. He used to sometimes advise me, look, Gary, you're not quite, quite getting to understand this bit, are you? Which was always fantastically helpful. And the two of us could work together brilliantly. It was a tough gig and really, I sort of felt that it was probably time for me to come back. And bizarrely, I was sort of sat. So I handed my notes in the October and got given three months gardening leave, which is very kind. And so I sat there looking at other things because there was another restructuring I was potentially going to. And if you remember, it was Douglas B. Who I worked with on the TDG restructuring. They phoned me Up. Hello, Gary. We've got another one here. It looks like there's a bit of a Treasury issue. Would you happen to be available at the moment? So within two weeks of on flight back to the uk, I had a week to sort of get myself a car, a flat and get settled back in Manchester and on the 9th of December started here on the day the deal completed for Douglas Bay to acquire them took over the new facility. Well, there are two volumes of it, but there was the shortened version of the facility, slightly complex, but came in really as part of a team to bring stability. And there's a number of us here of interims. William Stolbert came back in as executive chairman, brought a vast amount of expertise with him. Again, it's one of those things I mentioned about execution and knowing how things go on the ground. William knows a strategy. William's a great thinker, but he's probably also one of the very, very few executive chairman of a logistics company in the UK who also happens to have his Class 1 HGV license. He's driven trucks himself. He' spent a number of years in the early 70s as a driver. He knows what happens on the ground. So he knows how the business operates, knows what the rights and wrongs are, you know, how you do things properly, how you don't do things properly and that's that ability to understand how to make the strategy happen on a day by day basis is absolutely critical. I'm working with a fantastic cfo, Brian Corway, and this overall is a business where again, I'm trying to achieve something, trying to put something in place. I think we will do it's. I mean, everybody knows Eddie Storbart, everybody knows that the trucks that have got girls names and everybody wants this business to succeed. And to be honest, you know, you'd think, oh, crikey, you're in a restructuring position in December. Covid goes and hits at the end of February. Crikey, what was that like? It was this business's finest hour, the business. There was a determination in March of this year and April, as the supermarket shelves are being emptied, there was a determination by this business not to let anyone down. I had to make sure that we had the supply lines to keep the trucks fueled, that we had liquidity to pay the drivers. I like to think I played my part. But when I look at my commercial colleagues and what they did and how they kept those supply lines running, because we're one of the biggest, maybe if not the biggest carrier for the supermarkets in this country, the likes of Tesco and Sainsbury's. And everyone got the stock into the stores to fill those shelves as quickly as they did from panic buy in from when they really shouldn't have had empty shelves because people overreacted. But, you know, it, it had to be, you know, to maintain the confidence, people have to see stuff coming back on those shelves. And the drivers, the warehouse staff, everyone played a fantastic part. So, you know, when my grandchildren say to me, granddad, what did you do during the COVID crisis? I sat and counted the money. But at least it kept the trucks running.

Yeah, exactly. And again, one of the. Sometimes I interrupt people as Gary's got this great way of just walking us through your career and things. And as we look back and wrap up today's episode, people will connect you to on LinkedIn and you know, I think you've got some great stories to tell. And as I said before the show, will we get involved in other stuff? Because you've got this depth of experience and interest level, which I found great. But it's like just going back and looking back over these, you know, you got stuff from stuff in the Middle east, you've got stuff with troubled companies, troubleshooting stuff. If you bring it together and look at, you know, your top two or three tips, people are listening today going, I'd like to do that sort of thing. Or you know, maybe even relatively early. As I said, you know, you've been this quite early in your career when into the troubleshooting phase, what would you say to them? You know, what the bits of advice, you know, I love the bit earlier where you sort of said, HR doesn't lead your career. You do, you know, and you take charge. But, you know, what are the three things you might say, say first of.

All, and probably foremost is learn the business. I mean, as a treasurer, it doesn't matter whether you're a troubleshooter, doesn't matter whether you're, you're a career treasurer at the top of a large organization. You have got to know and understand the business. Otherwise you won't know and understand the financial risks that business has that you're meant to be managing. And to do that, you need to have a good communications network around the business. You need to know how to find out what is really going on, what the risks are, are what might be happening. Where there's an acquisition coming up with a disposal, you need to find both by formal methods. So your cash flow forecasting, how you structure your cash flow forecasting, how you make sure that it's efficient and timely, but also through the more, if you like, neural routes through getting to know people, getting to speak to people. And a bit of humility really, really, really goes a long way. I mean, as I learned earlier in my career at tn, a bit of arrogance will kill you. If you think you know it all, you certainly do not. So understand the business. Secondly, only try not to engage on things you don't know very much about because you can end up just looking a bit daft. So use your experience, use your. Use your qualifications. Use what you've learned, but try and use it to make a positive and constructive difference. Don't try and do other people's jobs for them. Them. Listen, think of how can I add value to this organization? Because the organization only wants you there. If you can add value, you can have 100 degrees, you can have a PhD. But if you can't bring value to the organization, it's all worthless. I'm guessing that the final one is get a good team around you. I've been to organizations where I've had good people around me and we've achieved things I never, ever thought we would. We've just done things that have been brilliant. There have been others. When I haven't had the right people around me and it becomes almost impossible, people are absolutely key, and that will be people both within the organization and also your external advisors. You'll get to know people, you know, external advisors, and if you find a good one, you hang on to them. Don't let them go.

Amazing. That was Mr. Slaughter out for the night. Thanks very much.

That's it.

Basically. Three amazing pieces of advice there just to finish off. So we'll come back to team building, but know your people, know where your cash is around the business, which will then give you. And then feeds into the value piece. And the value piece is then get a great team around you. You've had some, as you say, you mentioned there throughout the interview, a number of different people, which is fantastic. The key thing, I think, is anyone listening to today's podcast. I mean, we've gone over our time. Why? Because you've got so much value to add. And, you know, I think people need to, you know, have a bit of a longer commute because, you know, there's no, there's none of those bits that you can, like, leave on the customary floor. People are going to listen and know that actually that's where they need to take their careers. So, guys, as always, we'll put Gary's LinkedIn profile in the show notes so you can connect to him if it's worthwhile. Gary, thank you for today. You've been an absolute superstar as always, sir.

Thank you very much. Mike, it's been an absolute pleasure.

Thank you.