‘We’re becoming a more efficient business’: M Group technology MD

Georgia Grimes talks Telent integration, revenue bounce-back ambitions and new CNI opportunities

Telent is targeting growth across transport, utilities, defence and aviation despite a revenue dip, with parent company M Group expected to open the door to new customers and markets.

New M Group Technology MD Georgia Grimes tells CRN the opportunity is being driven by greater investment in critical infrastructure and the increasing amount of technology being layered onto physical assets.

Grimes joined M Group in April following 12 years at BT Group, predominantly at Openreach, where her roles spanned transformation, data analytics and engineering operations.

Grimes says the growth opportunity across the markets served by M Group and Telent was one of the attractions of making the move.

“The fibre market was growing and we're now coming down the other side of that growth cycle in telecoms,” she says.

“Whereas M Group and Telent are involved in markets that are now going through their own growth cycle, including water, energy, transport and critical national infrastructure (CNIs). That's where the growth is happening.

“The markets are expanding and becoming increasingly smart and tech-led, and that was somewhere I really wanted to play a part.”

Telent targets growth despite revenue dip

Grimes’ appointment follows a mixed set of financial results for Telent.

For the year ended 31 March, revenue slipped from £477.1m to £471.4m, which was attributed primarily to lower volumes in network services.

On the other hand, EBITDA increased from £41.2m to £42.8m, while operating profit leapt from £28.3m to £42.4m.

Grimes links Telent’s improved profitability to greater efficiency and increasing demand.

“We’re becoming a more efficient business in an area where demand for our services is growing, and that’s creating the growth story.”

The technology MD says the network services slowdown reflects work being delayed rather than disappearing altogether.

“It’s not that the work isn’t there, but some of it has shifted slightly to the right,” she explains.

“There have been some delays more broadly in government around some of the bigger budget decisions. We very much expect that work to come through.”

For the year ended 31 March, M Group’s turnover soared 23 per cent to £3.1bn.

Moving forward, Grimes sees “huge growth potential”, driven not only by Telent taking market share but by expansion of its underlying markets.

She points to significant investment in CNI and the growing technology requirements surrounding physical infrastructure.

“All networks, whether it’s water, electricity, comms, it’s not just the physical asset. It’s now about the technology on top of it.

“So as infrastructure is becoming smarter and more complex, that’s the sweet spot for Telent and for M Group.

Grimes identifies three main avenues for growth: doing more with existing customers in areas such as transport, using M Group’s relationships to expand into water and energy and targeting adjacent markets including defence and airports.

That approach is already reflected in Telent’s contract activity.

In transport, the company renewed its multi-year maintenance arrangement with South Western Railway in April.

It followed this with traffic signal maintenance wins involving Wiltshire and Kent in May, before securing a £25m West Sussex highways signal contract in June.

Defence-wise, the company landed an agreement in January to operate and enhance the Royal Air Force’s Site Co-ordination, Installation and Design Authority service across 244 locations.

Regarding airports, the firm secured a three-year deal with Heathrow Airport in March.

Two months later, Liverpool John Lennon Airport deployed the provider’s CCTV assurance platform.

Telent ranks number ten on CRN’s Top VARs list.

Telent and M Group integration

Grimes joined M Group Technology after its buyout of Telent in April last year but says the businesses have already begun extracting synergies from the deal.

Central support functions have been brought together, while knowledge sharing across the businesses has helped Telent adapt its offerings in emerging markets.

Her focus over the coming months will be making joint working between the organisations more seamless.

“There’s huge benefit to M Group from Telent coming in because we’ve got that expertise in OT, communications and digital infrastructure.

“There’s huge benefit to Telent because we get to be part of this £3bn business, with all the scale and expertise.”

The longer-term fate of the Telent brand has not yet been settled.

Asked if Telent will eventually be folded into M Group, Grimes says the issue is still being considered.

“It’s one we’re still pondering,” she tells CRN.

“I definitely think the organisations will become increasingly interlinked over time and, at the right point, we may look at how we take that even further.”

That could eventually include changes around brand strategy and joint messaging, but Grimes says it is not currently the priority.

Instead, the immediate focus is demonstrating the combined organisation’s end-to-end capabilities to customers.

“When we’ve done that better, when we’ve helped raise that awareness of what M Group is, what it can bring, I think that’s the point at which we consider how you’d further blend the organisations.”

M Group to maintain a ‘disciplined’ M&A strategy

Further takeovers could also play a role in building out M Group’s capabilities.

Grimes says the group’s M&A strategy is focused on adding strategic capabilities rather than simply increasing its scale.

“Acquisitions bring a lot of strategic capability, but I really think the value lies in how M Group integrates those into its offering, knitting them together so we can fuel organic growth,” she argues.

In addition to Telent last year, M Group also acquired the firm’s cybersecurity services company, Cyro Cyber as well as engineering business Aran to broaden its offering.

Looking ahead, Grimes would “definitely expect M&A to remain part of the strategy.”

“I think we are constantly engaged in the market, but I think it will be disciplined. It’ll be where an acquisition brings a customer access or a market proposition that strengthens the overall piece.”

The immediate task remains extracting value from deals already completed, but Grimes leaves the door open to further transactions.

“Where there are players out there that bring more to the party, we’ll absolutely look to pursue that.”

International expansion ‘not the priority today’

Telent currently employs around 3,000 people across the UKI, while M Group as a whole has approximately 14,000 employees across 300 locations.

Grimes estimates around a quarter of Telent’s workforce consists of technical engineers across areas such as software development and systems integration.

Another quarter comprises its technical field force, working across environments ranging from data centres and roadsides to railways and underground infrastructure, with the remainder broadly split between project management and sales and support functions.

For now, the company remains focused on the UKI, but Grimes does not rule out taking its capabilities overseas.

“We see a lot of parallels with the value we bring here, with what clients need overseas in Europe, in America, further afield,” she says.

“It’s not the priority today but watch the space.”