Taking Super Group from a market cap of R400 million to a market cap of R12 billion in 5 years, Colin Brown has helped set the ship on a new course– from a turnaround to a growth path. After he created a nifty Treasury system with his IT skills, Brown went on to streamline processes and bring reporting times back drastically.
“You need to understand what world class means and then raise the bar for your own company.” There is no doubt that Colin Brown knows what he is talking about. In his position as Group CFO, he assisted the Group Chief Executive Officer, Peter Mountford, and the current leadership in rescuing the flailing Super Group from the abyss five years ago, turning it into a profitable transport logistics and mobility group once again.
Brown’s contribution was in part due to his experience as a CFO of the Middle East and African operations of two multi-national groups. His achievements saw him win two CFO Awards in 2014, one for Finance Transformation and the other for Strategy Execution. This year he added the Finance & Technology Award to his cupboard.
Talking calmly and confidently, Brown seems like an extremely ‘nice guy’, somebody you don’t expect to get angry. But that can’t be right for such a successful CFO? “I do get upset and I have had to let people go where a person did not competently execute his or her work,” says Brown. His advice for ambitious CAs is to work hard at your job and show dedication by going the extra mile. ‘Soft skills’ are another crucial asset. “I think an accountant’s ceiling is often limited by people management skills. Presentation skills and relationship skills are essential, especially for a CFO in the public domain, so those are things you need to learn if they don’t come naturally.”
Brown has quite a story of his own to share. “When I joined Super Group the financial reporting was slow and chaotic. Many of the financial processes were not world class. I had 10 years of experience working for American and Japanese multi-national companies.” Despite the doom and gloom at the time, Brown managed to keep a good number of talented finance people on board. “Most team members embraced the challenge to implement world class processes and reporting, which provided the executive with the necessary visibility during the turnaround phase.”
Although the high calibre judges for the 2014 CFO Awards conducted thorough interviews with all the nominated Chief Financial Officers, Brown’s record speaks for itself. It is something that makes him proud: “From the time that the new executive team took over in July 2009 to now, the market capitalisation went up from R350 million to R10 billion.” Indeed an impressive performance, especially if one takes into account market sentiment towards Super Group in those dark days in 2009.
Brown was delighted with the awards he received. “I think CFO South Africa and the awards are a great initiative, and the event was very well attended. There is a need for this kind of forum in the country. From a networking point of view, gatherings like these are great for CFOs and also for young accountants.”
“I also believe that a CFO that doesn’t understand IT is at risk,” says Brown, whose recipe for success includes his deep understanding of IT, something he believes will aid any CFO tremendously. “For example, I can program in Microsoft SQL. This has really helped me in analysing large amounts of data across numerous entities and systems in a meaningful way. I learnt SQL in a previous company, and did basic programming when I was a kid.”
Brown recalls how he put those skills to good use when he joined Super Group in June 2009 as Head of Treasury, and later when he was appointed as Group CFO in February 2010. “The banks had basically taken control of the purse strings. They demanded daily cash reports and payment requests and it was a very cumbersome process to provide the numbers required by the banks. That is when I personally built a database that collated daily bank balances for hundreds of bank accounts. I used SQL and Excel to create treasury reports that were submitted every day to the banks. In addition, the analysis of trends at different levels enabled us to accurately predict cash requirements, allowing us to early settle expensive borrowings and terminate onerous banking arrangements ahead of plan.”
This approach continues to pay handsome dividends. “Our treasury division is still using that same database today, and we have been able to drive significant interest benefits through cash management within the group. We produce a full cash report first thing each morning. We can then analyse the cash trends at our different businesses and can quickly identify businesses where there are abnormal cash movements. This enables a quick reaction by the executive to possible problem areas. If you only rely on the month-end financial reports, it could take a couple of months before you notice any cash flow challenges.”
In the end it all boils down to creating a world class organisation that allows the executives to pursue ambitious goals, reaffirms Brown. “As the Finance Division, our objective is to provide accurate and timely financial information to management. Through technology, good processes and disciplines, we have refined our month-end processes to be quick and accurate. Every month-end should be like a year-end. If you do not have a clear idea what is going on in the company on a regular basis, you can come across some unforeseen surprises during the year-end process.”
Although Brown sees both awards as achievements, he says he is “probably most happy” with the Strategy Execution Award. “Of course it was crucial for Super Group to get a good financial function working. A lot of transformation was needed to get people to recognise value, get teams to meet deadlines, and to make sure there is one version of the truth across the whole group. But it is quite an honour to win the strategy award, because strategic issues are critical to the success of a company.” Brown’s contribution to the Group’s strategy included restructuring of Super Group’s capital structure, renegotiating onerous agreements with multiple banks, initiating a R2 billion corporate bond program and participating in integrating new acquisitions and the disposal of non-core operations.
Another strategic initiative that Brown implemented was the B-BBEE ownership scheme for the South African operations. “We restructured the Group by separating the South African operations from the international operations in order to implement the black employee ownership scheme at a South African level. We then gave an effective 10 percent of the ownership in the South African operations to black staff in a 10 year ownership scheme. This was a strategic way whereby we could empower our black employees instead of making another black billionaire richer. It is broad-based and participants lose their benefits when they resign. The financial benefit that a participant enjoys is linked to years of service, and not to seniority, salary or qualification. In many cases the scheme has changed the way people see their employer. We are starting to see an impact on employee retention. We have had instances where a competitor has tried to poach individuals, and participants have said ‘No, I am a shareholder at Super Group, I am staying’.”
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Source: © CFO South Africa