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Improving the Nation

The critics and cynics have not yet been sated, but Michael Wilmshurst is still in the job, and still improving the turnover and profit results of Nationwide Crash Repair Centres.

The chief executive of the UK’s largest bodyshop network was widely tipped by many to last no longer than a couple of years, before moving on to his next challenge. That he’s still there almost four years on is testament to the fact he believes he still has a job to do at Nationwide. And it’s a job that he is thoroughly enjoying.

Last year the group raised turnover by £20m to £140m but, more importantly, it raised profits to £4m, up 33% on a year earlier – despite purchasing 10 bodyshops and investing £2.5m developing its existing sites. Return on sales is now nudging 3%. Put into context, that’s rather more than the average margin return enjoyed by BMW’s franchised retail network last year.

The acquisition and subsequent integration of Gemini went smoothly; Wilmshurst says he learnt from the Gowrings purchase in 2004. Those learnings resulted in a better roll out of the group IT system and the mixing of Gemini and Nationwide staff.

A different approach

Now with 70 bodyshops, the “vast majority” of which are making a positive contribution to the bottom line, Wilmshurst says the start to 2006 is encouraging. He has budgeted to increase turnover and profits through the existing network, but adds: “We have resources to acquire if any opportunities arise.”

As the market leader, Wilmshurst is wary of being seen as a spokesman for the industry. He remains outside the RMIF and has not joined ABP Club, although he is sympathetic to their aspirations. Nationwide is unique among its peers and its views are not the same as many of the independents.

“We face the same challenges and opportunities, but our approach is often very different,” he says.

#AM_ART_SPLIT# New career progression policy

One subject where there is a common view is the single standard. Wilmshurst believes it is necessary for a professional industry. He is keen to put forward a member of his team to help formulate the blueprint. However, there’s a caveat.

“We will only support the scheme if it is mandatory – either by all insurance companies or the Government,” he says. “If it’s a voluntary code then how can we justify the investment to our shareholders?

Nationwide’s chief focus this year is to raise margins by controlling costs through centralized purchasing and improving efficiency. Three initiatives have been launched: quality of repair and service; consistency; customer value for money – a fair price for a good quality job.

Every estimator will undergo training to improve accuracy, while a new three-step programme will raise skills levels, taking estimators from trainee level to skilled to advanced. “We don’t always charge for all the work that we carry out within our agreements with our partners. When you are in a marginal business, things like this make a big difference,” Wilmshurst says.

Nationwide has also set up an academy to provide training for staff and a two-week ‘fast-track’ induction for new employees. It is embarking on a national apprenticeship programme through Thatcham, replacing its regional scheme through local colleges, and has a number of school leavers lined up to enrol. The target is 50 this year.

In order to tackle the perennial business issue of promoting staff before they are ready, Wilmshurst has introduced a new career progression policy. Now, rather than promoting staff from workshop supervisor to general manager to regional manager, the scale is: workshop manager – bodyshop manager – general manager – territory manager – regional manager.

The introduction of the bodyshop manager and territory manager roles has resulted in a more effective business without adding much cost.

Embracing new strategies

Wilmshurst is keen to be in the vanguard of new strategies, which was one reason why he was quick to embrace the Royal & SunAlliance direct repair centres (DRC) concept. One year on, and his eight DRCs are achieving customer service levels that he claims are industry leading by both RSA’s and Nationwide’s measurements.

“The DRCs make a financial contribution that has increased this year,” Wilmshurst says. “We have enjoyed a significant growth in RSA sales.”

Although he would not comment on volume levels, Wilmshurst says he has an “open mind” about expanding the number of DRC sites – and about other work provider offers.

“The industry is trying out different models; there isn’t one solution,” he says. “We fully assess every deal before we agree it and we continue to monitor it. Gross margin on every account is our key measurement, not labour rates.

“We want to be in a position to offer a selection of solutions and work with insurance companies to deliver those solutions. That means being the network of choice for our work providers and for manufacturers where they do not have a network that offers the coverage they need.

“But we also want to be the company of choice for our staff by offering career opportunities, skills, training and facilities,” Wilmshurst adds.

#AM_ART_SPLIT# Three steps to expansion

Michael Wilmshurst considers three ways to expand Nationwide:

Option 1 Purchasing a group – a value-based acquisition. Benefit: buying a business with a similar culture and processes.

Option 2 Buying individual sites – a labour intensive process. Benefit: selecting companies that fit the business plan.

Option 3 Greenfield developments – costly, but results in a business configured to Nationwide’s requirements.

There is a fourth way – buying from the receivers, but that is not a preferred option for Nationwide.

“If there is a business case for buying a company then we will look at it. The question is: is this a bodyshop of the future, or of the past? If we can’t find something suitable in the area, then we will create our own facility,” says Wilmshurst. “We discuss our plans with insurance companies to assess whether they have a need in that area, but they also come to us when they have an open point to fill – we actively encourage this.”

The business

Turnover (2005): £140m
Profit (2005): £4m
No of sites: 70
No of annual jobs: 171,600
No of employees: 2,215

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