Fleet News

Face to face: Terry Donovan, Minorplanet

TURNING around a company which had a high turnover but was making massive losses was the challenge facing Terry Donovan when he took on the role of chief executive at vehicle tracking system manufacturer Minorplanet.

But the fruits of his labour since joining the company in October 2004 are already paying dividends.

Earlier this month, the Minorplanet board issued a statement saying the turnaround was ‘progressing well and ahead of plan’.

It revealed that the group had reached break-even in October – a major achievement considering that in the same month the previous year, Minorplanet made losses of more than £550,000.

The statement said: ‘This represents a further significant milestone in the turnaround of the group.’

Explaining what measures he had put in place to reach this target, Donovan said: ‘Two of the most important things in a turnaround situation is to stabilise sales and then you try and cut costs to get to that point without destroying stable sales volume. You have to be thoughtful and selective as to how you do that.

‘Hopefully, we are in the process of achieving it. We reduced our staff level by a number of senior people, which reduced our high payroll costs.

‘Others offered to reduce their own salaries because they like the business and want to see it succeed.’

In fact, when Donovan arrived he was surprised at some of the high six-figure salaries paid to directors. Total head-count since Donovan’s arrival has been reduced by more than 80 people.

Before his latest appointment, Donovan spent 25 years in the computer communications industry, some of that time running his own successful companies.

Explaining what he found on his first day at Minorplanet, Donovan said: ‘It was a loss-making company, it had been through a lot of change and a lot of difficulty and there was fairly low morale.’

The company was growing fast but without making profit – at its worst, it reached an £88 million turnover with a £50 million loss.

He said: ‘We had to try and get people to accept that we had to have profitable growth because that meant it was sustainable.’

Historically, Minorplanet’s customer base has been fleets with 11 vehicles with a typical customer being, for example, a builders’ merchant wanting to monitor employee/driver behaviour.

Much emphasis is also being put on ensuring that its vehicle tracking device, called VMI (Vehicle Management Information), is right for the fleet industry.

It uses GPRS technology to report a vehicle’s movements and produces reports and graphs to show the effectiveness of a vehicle and the system has been revamped as part of the company’s new growth plans.

Donovan said: ‘We inherited a difficult product that hadn’t been made to work very effectively. We worked extremely hard trying to sort out any problems and thereby stabilising the customer base.’

The company is also investigating what other uses its system can have for fleets and is talking to companies about the type of cost savings benefits they require. A range of new products are promised soon.

Donovan said: ‘Our system will do lots of other jobs as well, perhaps gathering information on vehicle security, loads and weight.

‘Potentially, we can make it a communication product that tells fleets all sorts of things about their vehicles. That development is ongoing now.Everything for fleet customers has to be cost-justified and as it costs a lot to run a vehicle, we want to reduce the cost of running that vehicle.’

But it’s not just the product that Minorplanet executives are to improve and expand –they are also changing the way staff deal with customers.

Donovan explained: ‘We now want to grow sales in a different way than we’ve done in the past. We’ve changed about a third of our sales force and we’ve brought in professionals who we have trained both in selling techniques and the products.

‘We are introducing an academy where they must graduate before they go into the sales force. We would like to be aggressive with our sales growth but we need to be thoughtful about how we do that.

‘We’ll get growth and that will accelerate other growth but getting the cycle going can take a lot of energy.

‘We are in the process of starting that now.’

Fact file

  • Minorplanet employs more than 160 people in the UK and a further 40 people in Holland and Germany. It also has an operating subsidiary in Ireland, with 20 staff and another 75 in Australia and New Zealand

  • The company plans to grow its presence in Europe and is working with a firm to distribute its products in France and Italy

  • There are plans to move into Spain and commercial opportunities in Eastern Europe will also be investigated.
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