A new perception of business

PERCEPTION can be everything in business; it can make you or destroy you. Steve McAlinden, the new joint owner of Daniels Printing Craftsmen, has been in the print business for more than 30 years and was recently the victim of just such a false perception. He has seen a lot of people and companies come and go in the print game, but even he wasn’t prepared for what happened the day after he bought Daniels, a company synonymous with printing in WA dating back to 1902. Mr McAlinden’s career began in the mid 1970s when he took a sales job at Gibneys Graphics, owned by a friend’s father. He joined Vanguard Press in 1978 and was there until late last year, rising to sales manager then general manager in 1985. Vanguard was for many years owned jointly by the Catholic Church and businessman Ted van Heemst, also chairman of the WA Turf Club. Mr van Heemst bought full control in 2002. Mr McAlinden had previously tried to buy equity in Vanguard, but agreement couldn’t be reached, “so about three years ago I started to look around very cautiously,” he told WA Business News. “I reckon I had another 10 years left in me and had gone about as far as I was ever going to go at Vanguard.” In the process, he discussed the matter with old school friend and now managing director of the big property investment, development and management Mirvac Group, Greg Paramor. The two agreed to investigate a number of business investments. The best option came in the form of Daniels, which had been acquired by print and production house Touchstone via parent company Ecton Pty Ltd four years ago and the two operations amalgamated under the Daniels name. Frank Daniels Printing was established in Perth more than a century ago by a Melbourne family. “It had a great name that was synonymous with good printing in WA,” Mr McAlinden said. “I had heard the business was in trouble, so our accountants made contact and we had a close look at the numbers. It needed its overheads cut, particularly staff numbers, but it looked good. “I had the opportunity, the partner and the funds.” The pair made an offer of approximately $1.5 million for the company name and its assets. There were two other offers on the table and the deal was concluded in December last year. Then, the very next day, came a bombshell, with the seller telling Mr McAlinden that parent company, Ecton, had been put into adminis-tration. It later went into receivership. “It came out of a clear blue sky. I was stunned,” Mr McAlinden said. Word went through the industry and suppliers like wildfire. “The perception was that Daniels was stuffed. The problem was that they [the industry and suppliers] just didn’t know what was going on,” he said. The truth was that Messrs McAlinden and Paramor had bought just the name and the assets, not the parent’s debts or other problems. It was guilt by association. Mr McAlinden went straight into damage control. “I went to all our suppliers and clients personally, some in the eastern states, with a brief on our financial position from our accountants and assured them of the true situation,” he said. “Most agreed to supply on normal market terms, but some didn’t. Fortunately a lot of the suppliers knew me and the backing I had. But that contact was critical.” A side effect of this was that it took Mr McAlinden away from his prime sales role, “but our supplies were assured”. He conceded there were a few times in those turbulent early days when he seriously questioned what he had done. The required cost cutting reduced staff from 46 to 22, some going with the old management, many from an overcrowded middle management section. Mr McAlinden’s hands-on style also revealed that a lot of the inherited business was not profitable. “It’s easy in this business to have turnover, but you need the margins for profitability. You don’t need massive turnover to make money, it’s all in the margins.” The client make-up is now about 50/50 old and new, enough to warrant the recent addition of a small colour press to supplement the two large presses and a computer-to-plate system being installed next month, all costing about $350,000. The company is also looking for an extra sales person to join recent signings Alan O’Neil as sales manager and John Coolbear as production manager, both from Vanguard. “Its going well, slowly, but well. The company has been profitable since the second month of trading and has no debt. We are breathing fresh air,” Mr McAlinden said.

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