Are we going to see more ‘regional powerhouses’ as the print sector continues reshaping? We asked Jim Kerr, CEO of the newly founded Astra Group, about his decision to unite two of the UK’s leading digital and traditional signage businesses - and if it’s a move he thinks others will follow.
“It would be easy to associate the consolidation of the sector with the impact of the pandemic, but we started to see the shift in some of our markets prior to Covid-19.
“The supply chain is getting smaller and businesses have been working around this and acquiring one another while others are unfortunately no longer with us. I anticipate we’ll see more regional powerhouses - servicing large national roll-outs in order to maintain scale. For those able to move with the times it will be one of opportunity,” enthuses Jim Kerr, CEO of the newly founded Astra Group, brought about by the merger of ADXBA and Astra Signs this spring.
Kerr continues: “Where the strongest wins will be is difficult to predict, as we work across such a broad spectrum of areas and the market is continually evolving. Diversification of revenue will however be key to futureproofing businesses and achieving sustained growth. It was the driving force behind the merger of ADXBA and Astra Signs and, in turn, the formation of Astra Group under which both businesses now sit. Both were, prior to merging, incredibly strong independent businesses and proud leaders in their respective fields - both, however, stood to enjoy far greater growth and protection from market changes as one.
“It’s a lesson I learnt early on in my career - the importance of having a diverse revenue stream. ADXBA was born in 2008, just at the start of the economic crisis, and let’s just say it was an interesting time. I very quickly identified the need to develop individual specialist services within the business to protect our revenue stream and achieve increased stability. It was an effective strategy and has seen ADXBA go on to enjoy significant success.
“I have, however, always been mindful that the nature of our work and our client base, which lies largely in the airport and transportation sector, limits the opportunity for ongoing significant growth, which in-turn exposes us to risk. You only have to look at Covid-19 to see how the difficulties faced by one sector can significantly impact that of another. Broadening our range of services and further diversifying our revenue stream has always been a part of our long-term strategic plan and entering into an acquisition or merger the obvious route forward.
“We started conversations with vendors long before the pandemic. We were looking for businesses that presented key differentials, including location, mentality, in-house services, client base, revenue and profitability. Astra Signs stood out.
“We’d had the opportunity to work together on the new Manchester Airport terminal - for which ADXBA was responsible for the digital provision and Astra Signs the signage - and got a good understanding of each other’s specialisms. I also got on very well with David [Derbyshire], the founder and managing director of Astra Signs, and had utmost respect for what he’d built. It’s a relationship that grew throughout the pandemic as we shared strategies for navigating the crisis and leading to the merger of ADXBA and Astra Signs in April of this year.
“It’s early days - both businesses are now being led by myself but are still in what I would describe as the collaboration phase. We are however further ahead than I could have hoped and are already seeing the rewards.
“We’re fortunate in that what we’ve created is quite unique at the moment. There are obviously people that do the digital aspect of what we do just as there are those that do the signage aspect - and there are also some that do both. Where we stand out however, is in our technological capability. We have an entirely dedicated technology division that’s developing the software and the systems that monitor and manage all of these assets.
“We also have a division that’s nationally and internationally available to maintain all products and be reactive to faults, ensuring an overall quality output. I’m pleased to say that the existing client base on both sides of the business is ready for what we’re offering as a true, fully-fledged end-to-end provider. We’ve also recently won some significant work, which is without question, the result of our combined strength, capabilities and expertise.
“In Astra Signs ADXBA was lucky to find the right partner - the two businesses complement one another equally. Over the coming months we’ll be looking to further incorporate the businesses, including a review of our management structure, physical locations, continued integration of systems and more. It’s important to get these things right and so we’re taking our time and feeling our way. I’d encourage any provider looking to enter into an acquisition or merger to do the same - to take their time and do their homework.
“Whilst we couldn’t be more pleased with how things have developed it’s been a long and difficult process and I’ve learnt a lot along the way. We’ve been fortunate to have the right people around us.
“You’ve also got to be prepared to invest. Whilst we’re obviously anticipating the bottom line to improve over a period of time there are investments to be made to make that work.
“We’ve achieved what we set out to. We’ve opened the door to increased opportunities and provided the collective group business with increased stability. Our revenue make-up is now quite unique in that we have several big recurring makeup pieces for which are contracted long-term - largely for five to eight years, some of them ten - alongside short- and mid-term contracts, and fixed big projects. That span of revenue is really what this has been about for us and the launch of Astra Group.”