Which? planning £20m commercial expansion
The consumer association Which? is planning a £20m push to expand its commercial activities, which could make up a third of its profits in the next five years.
The charity is investing the cash being thrown off from its publishing arm into divisions that sell mortgages and write wills for customers.
Peter Vicary-Smith, Which? chief executive, said he was on the lookout to enter markets “which are broken fundamentally; where the model of competition isn’t working”.
The strategy marks a departure for the charity whose reputation is founded on supplying impartial advice.
Its expansion has raised concerns that Which? may become conflicted. Recent campaigns include calls to make energy more affordable, preventing the sale of dodgy financial products and the consistent unit pricing of food by the major supermarkets. But Mr Vicary-Smith insisted the company could strike a balance, adding: “We are absolutely upfront with people about what we are doing and why we are doing it.”
Which? now boasts it produces Britain’s biggest-selling monthly magazine, having overtaken golden oldies’ title Saga. It has a record 1.4 million print and digital subscribers, compared to 812,000 a decade ago. Group turnover is expected to be close to £100m in the latest financial year, up from £85m last year. Operating profit is expected to have risen again too, from £18.2m last year. A decade ago it was £6.7m. Which? has more than £100m on its balance sheet and unlike most other charities it is self-funding and does not take donations or government aid.
“We are spending behind the curve of the money coming in,” said Vicary-Smith. “The publishing business is doing really well, bucking the trend, but we can’t assume that is going to carry on forever.”
Which? launched into offering mortgage advice two-and-a- half years ago and now employs 100 at its broking operation in Bristol In the South-east, Which? also launched Trusted Traders at the end of last year, a database of 6,000 plumbers, builders and handy men that is being expanded to the Midlands and eventually nationwide.
Its legal services business advises on will-writing and consumer rights in the areas such as travel and motoring and is developing a conveyancing service but has no plans to follow the likes of PwC and insurer Direct Line in applying for an Alternative Business Structures (ABS) licence that would let it offer everything a law firm does.
Which? chairman Mike Clasper traces the change in the charity’s fortunes back to when the Consumers’ Association rebranded all its activities under the Which? umbrella.
“We used to campaign against faulty kettles or car repairs then Which? would produce a magazine of consumer advice and nobody would associate the two together.
“The core business was declining steadily and unspectacularly. Now it has grown dramatically,” said Clasper, who was the chief executive of airports group BAA and now also chairs zips and threads maker Coats.
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