Callcredit benefits from new approach by clients

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THE Callcredit Information Group saw turnover and profits soar last year as banks, insurers and retailers invested in new ways to find out about their customers.

The Yorkshire-based company reported a 25 per cent rise in turnover to £114m and a 40 per cent rise in operating profits to £17.3m.

John McAndrew, Chief Exective of Callcredit.

John McAndrew, Chief Exective of Callcredit.

Callcredit has more than doubled in size since it was sold by Skipton Building Society to private equity firm Vitruvian Partners for a reputed £120m in 2009.

The group employs nearly 600 people at its head office at Leeds. Last year it opened a new IT support and development centre in Lithuania to add to offices in Dubai and Tokyo. It plans to hire another 100 staff before the end of the year.

Callcredit sells credit reference and marketing services to businesses and last year launched a free consumer service called Noddle.

John McAndrew, chief executive, told the Yorkshire Post: “Last year was another very good year in tough times. We grew market share right the way across the business.”

He said the credit business, which works with lenders, insurers and internet companies, grew by 40 per cent. This was driven in part by the growth of the internet and its influence on the way people do business.

He added: “A lot of our customers are going through a high amount of transition in terms of how they lend, how they verify and how they assess customers.

“Legislators are saying to them they really do need to know their customers, ensure they lend responsibly and treat their customers responsibly and that’s where we can help them.”

The division checks identities, identifies potential fraudsters, tells businesses which consumers can and cannot afford their services and gives businesses a comprehensive view of consumer track records in meeting credit commitments in the past.

Mr McAndrew said Callcredit has grown during the downturn as lenders look for innovative new ways of finding out about customers and identifying how profitable they might be. The credit division contributed 60 per cent of revenues.

The group’s marketing division runs databases, populates these with prospects and helps run campaigns on behalf of financial institutions, media companies and hotel groups. It makes up around 30 per cent of revenues.

The division analyses existing profitable customers, identifies their key characteristics and finds millions more with matching attributes and tells businesses the best channel to communicate with them.

The group sees this as a growth area – its last three acquisitions have been digital businesses.

The new consumer division, which offers free credit reports in return for targeted offers, has gone from zero to 250,000 customers in a year, said Mr McAndrew. The division contributed 10 per cent to group revenues.

Mr McAndrew is optimistic about the group’s potential to grow. He said: “Twelve years ago there were three of us. Now there’s 900 of us. At the end of the year there will probably be 1,000 of us.

“We still only have 11-12 per cent of the UK market share. We have probably overtaken Equifax.

“This year we have opened offices in Dubai. We already have got a strong base in Tokyo. We have agreed to set up a small business in China, in Shanghai, working on the retail distribution planning side.

“Over the next five years international must be something that we concentrate our efforts on.”

The group refreshed its IT infrastructure and moved from Cable & Wireless to TelecityGroup.

Most of its data is held at two sites in Leeds and London.

The group invests heavily in data security to protect it against the “hundreds and thousands” of hackers.

The group refinanced in October with GE Capital and Ares Capital Europe. Mr McAndrew said: “This whole issue about banks not lending, they are lending if you have a strong business case and a strong business. We had a lot of very attractive offers in front of us.”

He said “sooner or later” the group will find another private equity backer, but at the moment Vitruvian is “very happy” with the business.