Alex Turner meets ALLAN GAULD, founder and managing director of Intrinsic Technology

EARLIER this year, Allan Gauld arrived at work dressed as Disney’s most famous character.

That was for Red Nose Day, and the company he founded, Intrinsic Technology, is far from being a Mickey Mouse operation.

The Newton-le-Willows technology firm is forecasting turnover of up to £26m for its 10th year and is on the cusp of massive change – and growth.

It is all a long way from the position Gauld was in a decade ago when, as a senior manager in charge of a team of 30, he was sacked for “failing to deliver management obligations”.

Cable & Wireless took over the company he was working at, Data Range Communications, bringing with it a new management style – and a new contract for employees.

Gauld said: “The contract discussions were ongoing for six months. They wanted me to get my staff to sign the new contracts, but the changes were all in favour of the company.

“One of my staff asked if I was going to sign mine, I said ‘No’, and my staff refused to sign their contracts as well.

“I got dismissed. I could see it coming.”

He decided to set up his own company which, in its 10th-anniversary year, now provides communication and IT networks for organisations in a number of sectors, from its offices in Merseyside, London and Scotland.

It has particular expertise in the finance, local government, utilities, education and health markets and it installs the hardware and provides 24-hour IT cover with a network of field engineers around the country.

But getting the company off the ground wasn’t easy with the lack of funding available.

He said: “It took six months to put funding in place and get the business plan together. I got refused funding from the banks so my only avenue was a third party. It was July 16, 1999, and we have gradually grown the business since then.”

A key factor in the growth of the company was Gauld’s desire for Intrinsic Technology to remain debt free.

“I started off the business with £100,000 and had to put another £100,000 in a year after,” he said. “On the second tranche, I had to put my house up as collateral, which took a lot of persuasion, but I knew it had to go in.

“The way I had built the business up was to have the business as debt-free as possible. I had budgeted for a second tranche of money.

“We started the business providing hardware components into the public sector and then we grew into Barclays, United Utilities and others. The business was North West-based, but our aim was always to get full UK coverage.

“After four years, we had 18 employees – because we were trying to remain as debt-free as possible. We have got 78 employees.

“I brought a lot of staff with me when finances allowed. We now have eight employees that were from the previous company.”

Gauld’s ability to attract and retain people who have worked with him previously is indicative of his character, which varies between paternal touches of praise – a bottle of Champagne for work well done – and a tenacity dealing with outsiders.

His “never take no for an answer” philosophy has been valuable in securing important deals for the firm.

He said: “When we were growing the business, we were involved with a company in London who were going to award us a contract but we were probably guilty of talking to the wrong person in that company.

“We got wind that it was going to one of our competitors, so we went down and spoke to the chief executive.

“We walked out from the meeting with a one-year deal. We now have had that for eight years.”

It is that tenacity that has seen the company grow quickly in recent years.

Intrinsic Technology turned over £17.6m in the year to November, 2008, up from £9m just two years earlier, while operating profit increased by a fifth to 6.2%.

Gauld forecasts this financial year turnover will have leapt again to £24m-£26m, generating an operating profit of “about 10%”. But the business is about to undergo a step change, as Gauld hands over control to outside investors, who will invest a “massive amount”.

He said: “The back-end of this year, there will be a big investment in the business. They will be putting a massive amount of money in and we will be diluting our stockholding.

“Our turnover in the next 36 months will grow to more than £100m.”

This swift projected growth is the result of a decision to move the business to “the next level”.

“We see businesses this size amble up to £25m,” he said. “We have already made the decision to get to the £100m mark to compete with BT and the others. So the decision was made 12 months ago to go to the next size.

“If I’d gambled a few years ago we could have got bigger, quicker. But with the climate changing I look back and think we did the right thing. We have working capital of £5m which allows us to be debt free.”

While the investor will bring “expertise and value, especially for acquisitions” Gauld is confident that Intrinsic’s management team can continue to deliver fast growth.

“We will have to beef up our operations but I do think that the calibre of people in the management team in particular are very scalable,” he said. “Every member of the seven-strong management team will remain as they are, pivotal to the business.

“Four of the seven were with me at the previous company, which is some going.”

One significant change in that team is a change of roles for Gauld, who will move from managing director to a chief executive-level position.

“I had the opportunity to leave in six months’ time, but I wanted to stay on and see it through to the £100m,” he said.

“I know the person who will come in at the MD level. He will have a different management style but I think I can adapt to it.”

alex.turner