ALMOST two years ago Manny Papadoulis was a pin-up boy for family businesses.
Running the well-known Feature Tours, which he had taken over from his father, Michael, Mr Papadoulis was an industry leader who fought hard to make tourism heard when no-one seemed to be listening.
When the judges were asked to choose between him and St George’s Terrace investment banker Mark Barnaba for the inaugural 40under40 1st Amongst Equals prize, they decided to award joint-winner status.
Just like the 40under40 competition’s logo, Mr Papadoulis is a tall poppy, and he now admits to knowing just how tough that really can be.
On October 8, Feature Tours entered voluntary administration, appointing Cliff Rocke and Simon Read of insolvency specialist PPB Ashton Read.
Mr Papadoulis said it had been the most frustrating time of his life. Having managed the business through the worst year imaginable he was forced to call in the administrators just as the industry was starting to pick up.
“The hardest decision I have ever made was to do that,” he said.
“It has totally traumatised my father.”
But, tough as it is, the only regret Mr Papadoulis has now is that he didn’t bring the experts in sooner.
“I did a lot of cost cutting last year and early this year, but rather than cost cutting, the PPB boys have shown a different way of doing it,” Mr Papadoulis said.
“You don’t cut costs and upset the process, you find another way of doing the process.”
Traditionally, Feature Tours has always owned its own coaches. Now it is looking at subcontracting in its buses, which may be owned by the drivers or another third party – just as the trucking industry has done.
“A couple of years ago we toyed with the idea of bringing in a team of accountants to check everything out,” Mr Papadoulis said.
“The quote was $30,000. That is a lot of money and you don’t get an asset out of that. In the end we decided not to do it.
“Now I wish we did.”
Mr Papadoulis said he felt buoyed by the changes and is confident that creditors can be convinced to agree to a Deed of Company Arrangement in November that will allow Feature Tours to attempt to trade out of difficulty.
If successful it will be the beginning of another year of hard slog for Feature Tours, which has struggled in the face of September 11, the collapse of Ansett, the Bali bombing, the war in Iraq and the SARS epidemic.
Earlier this year, Feature Tours sold off its airport shuttle business, intending to use the cash to keep the business afloat over the slow winter season.
But that money was gone before winter arrived, forcing the Papadoulis family to plough a further $300,000 into the operation when activity was around 25 per cent of the usual slow time.
By September, when the wildflower season started, the business was pared back to basics and struggled to cope with the demand, which suddenly came back on stream – creating a new cash crisis as the wage bill tripled.
Mr Papdoulis claims that the earnings from then, and the Rugby World Cup, will start to flow through the business as its 60-day debtors pay up and about $400,000 in forward bookings over the next two months injects new cash into the business.
All this is history, though, and Mr Papdoulis admits that blaming tourism’s version of a drought won’t wash as an excuse.
“I can blame external circumstances, but at the end of the day I am the CEO, I have made the commitments, I am responsible,” he said.
Detractors, and there are a few, agree.
Some are creditors whose businesses are equally fragile and cannot afford to wait for Feature Tours to pay. Others are industry heavyweights who believe Mr Papadoulis should not have been operating if he couldn’t pay his bills.
Mr Papadoulis denies that Feature Tours ever traded insolvent, something the administrators are investigating as a matter of course.
“They have to report to creditors,” he told WA Business News.
“If it is an issue we will be defending it.”
Generally, though, the Feature Tours chief said he had received strong support from the industry, including the Tourism Council Western Australia, which confirmed his role as president after of a vote of confidence, and creditors, particularly those who have a long-standing relationship with the tour company.
Even his fellow 40under40 winners from 2002 have pitched in with calls of support and encouragement – far outweighing the negative reaction.
“There is an element of the tall
poppy thing,” Mr Papadoulis said. “People love the fact that you are squirming.
“You, Mr Tourism Council, Mr Feature Tours, Mr 40under40 – suck on this.”
Knowing this, he seems quite relaxed about current affairs, especially when he reveals our 8am meeting comes after less than four hours’ sleep.
Mr Papadoulis admits he has learned to handle stress since experiencing heart problems last year.
“The day it happened was the day of the Bali bombing,” he said. “At 6am I got a call from the ABC about it, I thought it was a dream.”
By 11am he was in hospital with chest pains.
Ironically, he had felt pain in his chest the previous evening and taken a dose of aspirin because that was all he could find. The doctors have told him that act probably saved him from a bigger seizure the following day.
“I have now done a rehabilitation program, I have learned to handle stress,” Mr Papadoulis said.
“I have to face personal abuse over this and cop the ribbings. I would have been a quivering mess last year but now I know how to put it in perspective.”
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