Drumz plc (LON:DRUM) Chief Executive Officer Angus Forrest caught up with DirectorsTalk for an exclusive interview to discuss their latest portfolio update, the 20% holding in Acuity Risk Management and strong growth.
Q1: Angus, you’ve just published a portfolio update announcing a 20% to hold it in Acuity. Why did you choose to invest in Acuity?
A1: We chose Acuity, we’ve been following it for about two years and the directors of the business had set it up, having sold a consultancy business, which they’d run for 10 years and sold it very successfully. They really know about the subject and Acuity had won a number of awards and has got some stellar customers & we think that the risk management is a very interesting and growing market.
Very importantly, the directors are people that we would like to work with, they’ve got integrity, they’re hardworking and ambitious and we felt that we would work well with them & that our skills would make a difference to enabling Acuity to exploit its market opportunity.
So, all of those things about Acuity & it’s a SaaS-type product, and SaaS type products have two critical things when it comes to valuation, one is scale and the other is growth rate. We felt that we could impact the growth rate which would also impact the scale and if you do that, you just transform the value and it’s to the benefit of both Drumz and the other shareholders in Acuity.
Q2: What changes have been made at Acuity now?
A2: Well, the first things that happened, and these all relate to sales and marketing and commercialisation of the business, that was a review of how the business was run, we reorganised the business model, we introduced a new prices, longer contracts and a number of other similar types of ways to enhance how Acuity traded with its customers.
The second thing we did was we strengthened and focused the sales efforts, particularly focusing on existing customers and in the short term, existing customers will prove to be most companies quick wins for growth. The other thing we’ve been working on is partners so, we’ve been selecting partners for longer term growth, partners have the ability to offer a multiplier effect in markets or sectors that the company cannot exploit properly itself.
The third thing is marketing, we’ve introduced some digital marketing and the effects of the digital marketing were dramatic. There was a target for the first quarter, they achieved that target new leads in the first month so we were over the moon about that and it will stand us in good stead for the longer term.
Q3: You talked about the changes, what’s the correlation between the changes that Drumz has made and the strong growth?
A3: Working the existing customer base has certainly has an impact in the short term and it will continue as we work the existing customer base because existing customers usually want more, relatively speaking, an easier sale than brand new customers, we want a lot of people into Acuity and its product string.
The second thing is the terms, they are a better balance for Acuity than it had previously and the third thing, and this is for the longer term is KPIs. We’re managing to generate statistics and information and using that information, basically real data, to take management decisions which will drive the business forward for the future.
