Parkiet: Obsessed with profitability

Thursday, 18 March 2010 21:58

In this interview we talk to ... Wojciech Bieńkowski, President of the Board and shareholder of the company Arteria. “Our obsession is profitability”.

 

What targets are comprised in Arteria’s new strategy?

Our goal is to considerably improve profitability and markedly increase our net profit over a 3-year period. The Company is to grow in three directions.  First, we need to deliver the so-called Powerbox – this refers to combining services and products into packages and selling them through our own distribution network. Secondly, we will be targeting large customers. We’ve already selected companies which we will approach with our offer. In each of the three coming years we want to enter into a few big contracts.

What do you mean by a big contract?

A contract that will generate for us, over 12 months, a minimum net margin of one million PLN.

Now, what about this third segment?

The third segment comprises subscription services; also in this segment we plan to  launch services and products under our own brand.

Now, can we go on to discuss Arteria’s performance? Companies engaged in sales outsourcing don’t usually report the first quarter as very successful. How is Arteria going to perform this year?

This quarter’s results are on target. They aren’t overwhelming, though because it is in this quarter that we’ll be posting, among other things, bond issue costs. But they aren’t bad, either. All our businesses are faring well. And some of the group companies are doing even better than we expected, I mean Trimtab and Gallup.

Arteria has so far issued bonds with total value of PLN 5 million. What will the proceeds be used for?

One of the things we want to do is to buy the balance of shares in Polymus. Besides, we’ve devised some interesting plans for this company.

Could you be more specific?

I’m not ruling out establishing a capital group which would comprise Polymus and where Arteria would be a minority shareholder. We’ve already held a series of meetings to discuss this project. If Polymus operated in this segment, it would have very considerable potential for further growth.

Would Arteria dispose of some of the shares in Polymus?

No, I don’t think so. Arteria would probably contribute shares and take up some of the capital of this company – in proportion to the shares contributed. This company would be a joint-stock company. It might be that later on this joint stock company would be listed on the stock exchange. Arteria still has considerable spare issuance capacity in respect of bond issues because the Supervisory Board has authorised the issue of bonds to the value of PLN 50 million.

Are you going to sell another bond issue?

Yes, if we reach agreement regarding further acquisitions. What matters most to us now is two acquisition prospects. One company operates in the financial services sector, and earns annual net profit of ca. PLN 1 million, generating an annual turnover of more than a dozen million zlotys. The other company is a telecommunications company. We’ve made a non-binding offer to purchase the business. It’s not a large company. It is very interesting for us, though.

When will we know if the acquisitions are going to materialise?

In one or two months’ time.

Some time ago you said that Arteria was about to launch an incentive scheme. Is it still on the table?

Yes, we’re going to put in place a three-year option scheme for managers. In April the Company’ General Shareholders’ Meeting will take a decision regarding the scheme. In March, we’re going to provide assumptions for the scheme, relating to the Group’s performance as forecast for the years 2010-2012. We expect to increase our turnover by several dozen per cent on a year-to-year basis. Still, it is profitability that is our obsession. We are determined to double it. We don’t want to expand the group no matter what the cost, we want to make money.

What about dividend? Up till now the Company hasn’t paid out any dividend.

And probably we won’t be paying any dividend over the next two years because of the investment projects we’ve planned to undertake. We might make a pay-out in 2012. For the time being, we want to focus on further strengthening our leadership position.

One of the sectors in which you operate is the financial services sector. In this respect, Arteria probably has more opportunities to show its potential than it did a few months ago, as the exclusivity clause relating to Citi Handlowy products was abolished?

Yes. Soon we’re going to start selling Generali insurance policies, among other things. We’re also in talks with other banks about selling their services. Our goal is strengthen our position in the financial market. That is why we’re holding talks about acquisitions. It is possible that in the end we will enter into a merger agreement with a company that operates a chain of branches. On our part we would contribute our mobile sales representatives.

Source: GG Parkiet