Profile: David Hornsby

David Hornsby has given his company Ideagen a glamorous image. City editor Ros Snowdon got an insight into his world.

David Hornsby is a happy man. He’s over the moon that Yorkshire managed to win more Olympic medals than Australia.

He is also delighted to have lived in the same suburb of Leeds, Bramhope, as the triumphant triathlon gold and bronze medal winners the Brownlee brothers.

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Hornsby spent the first 17 years of his life in Leeds before moving to Ilkley with his father where he stayed until his early 30s, but he was lured down south ahead of the launch of his software company Ideagen.

In the – let’s face it – pretty boring world of software, Ideagen is the James Bond of the market.

Its software is used by large complex businesses that make dangerous products, ranging from anything from missiles to drugs.

Ideagen helps these companies to manage their data and make sure that it adheres to very specific rules.

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Some of its 007-style projects include helping the Royal Air Force to manage their Typhoon fighter jets, which were put on standby during the Olympics to shoot down any would-be suicide bombers.

Ideagen’s clients range across a broad spectrum from defence company BAE Systems to beer group Molson Coors, pharma giant Smith & Nephew and luxury make-up brand Estee Lauder.

Estee Lauder uses Ideagen’s software to underpin a lot of its manufacturing in the UK, but now the cosmetics giant wants Hornsby to do a similar thing in the US.

It’s an exciting project and one that Hornsby is keen to get his teeth into over the coming weekend.

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Researching clients and what they do while also searching for potential acquisitions is more of a hobby to him than work and he obviously loves his job.

Some 40 per cent of Ideagen’s business is export and it’s set to grow, mainly to North America.

“It’s unusual for a small UK software company to export to the US. A lot of the rules governing the market started off in the UK. Our software understands these rules,” says Hornsby.

“We can deliver more quickly. We’re nimble, agile and hungry.”

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There is growing demand for companies that work in Ideagen’s sector.

The global financial crisis led to increasing Government regulation to make sure companies behave responsibly.

Ideagen provides the software that allows companies to show they are acting within the new rules.

The company must be doing something right as it has managed to poach a new chief operating officer Graeme Harrop from Microsoft.

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“I pay him a third of what he earned at Microsoft, but he wants to build something. We incentivise him,” says Hornsby.

Hornsby is always keen to hire Yorkshire people and has taken on five since starting the business.

“Yorkshire folk deliver what they say they will. What you see is what you get,” he says.

With this in mind Hornsby is keen to use Yorkshire advisers rather than London-based ones.

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“In Leeds you can get better value than in London. You can get the job done better, faster and cheaper than in London.

“I’m talking to a couple of Leeds-based lawyers about any potential mergers and acquisitions. They’re a lot more affordable and they’re more responsible.”

He also uses Ilkley-based analysts Brokerlink for the same reason.

Talking of mergers and acquisitions, Hornsby says he would be keen to look at acquisitions in Yorkshire to expand into a region that he still has very strong ties to.

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“My father came from Beeston in south Leeds. It’s a tough area, a fine working class area. He left school at 14 and worked in a mill before working his way up to the board of Tootal (a large FTSE 100 textiles company). He was a good influence.”

Hornsby attended Leeds Grammar School and then Sedbergh Boarding School in Cumbria. After that he won a place at London University Kings College where he read history.

But he didn’t complete his degree and subsequently returned to Leeds where he worked for various IT companies.

He forged a path through several computer software companies rising though the sales ranks before finding himself at a loose end three years ago after the company where he was head of sales found itself in financial difficulties.

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He was introduced by his broker FinnCap to software company Datum International, a precursor of the current Ideagen.

“Datum was in real difficulties. Revenues had gone horribly wrong.

“They wanted someone to help. I invested £250,000 in it and we got it going,” he says.

Several acquisitions later, which included the better known Ideagen brand, and the new company was formed.

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Big companies are discovering that Ideagen can do things more quickly and cheaply than their big US rivals.

“Fuji Diosynth (a US contract pharmaceuticals company) had an issue and they had to become compliant quickly.

“We did it in three months for $250,000. US companies were quoting $2m and it would have taken a year,” says Hornsby.

Analysts rate Ideagen highly because of its rapid growth. Last month it announced a 120 per cent increase in pre-tax profits of £1.08m for the year to the end of April. Revenues rose 78 per cent to £4.0m.

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“Analysts like us as we’re growing rapidly, new customer numbers are rising and we’re profitable. Most tech companies don’t think about the business, just the technology,” says Hornsby.

“We’ve over-achieved on numbers thanks to better management of existing clients and we’re also winning new clients. We’ve got good recurring revenues.”

Hornsby started off with revenues of £350,000 a year and the company was losing £500,000. Next year analysts are forecasting revenues of £6m and nearly £2m in profits.

Hornsby says the company is able to achieve these levels of profit because it has small teams that work quickly rather than the “armies” employed by bigger US rivals.

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FinnCap analyst Andrew Darley says: “Ideagen’s impressive client list highlights product excellence and the potential for growth from customer and contract wins. We do not expect management will stand still, presenting the opportunity for organic and acquired growth ahead of expectations.”

Three years ago the group’s share price was 2p and it’s now 16p.

“We’ve generated an 800 per cent return. I don’t think another software company has done that in the last two years,” says Hornsby.

Now Hornsby believes that the Olympic Games will spur people on.

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“Yorkshire has more medals than Australia. That makes me feel hugely proud. I hope it has a positive effect.”

David Hornsby Factfile

Date of birth: 1.7.67

Place of birth: Peebles, Scotland. “I moved down to Leeds when I was one,” says Hornsby.

Education: Leeds Grammar School; Sedbergh Boarding School; University: London University Kings College

Car driven: Aston Martin DB9

Favourite holiday destination: South of France

Favourite band: Oasis and Brit Pop generally

Last book read: Ian McGeechan’s Lion Man: The Autobiography

Most proud of: My children