One man and a float at ICL
Profile: Keith Todd; Heard the one about the computer company joining the stock market? The boss doesn't think it's a joke, writes David Bowen
Sunday 15 December 1996
It could not. In 1981 ICL had to be rescued by the government. Far from being a national champion, it is now 90 per cent owned by Fujitsu of Japan. All that is left of the Sixties optimism is its headquarters, a grey skyscraper on the Thames at Putney.
Fortunately Keith Todd, ICL's amiable chief executive, is not the sort of person to mope over past miseries. He took over a year ago, when Sir Peter Bonfield went off to run BT, and he has his eye on the Millennium, or rather on 1999. That is when he hopes ICL will finally make it on to the London stock exchange: Fujitsu will keep a majority stake, but the City will at least have a major British computer company into which it can get its analytical teeth.
Todd, only 43 despite his grey hair, was finance and business strategy director before his elevation, and has been talking to the City for many years. "That's because the flotation has always been two years away," one analyst comments. But potential investors now believe it really will happen before the end of the century. For one thing Todd has replaced Bonfield "who you always felt was meeting the City because it was a necessary evil", one analyst says. For another, ICL is being "re-engineered" in a way that is likely to make it more attractive to potential shareholders. This month it will announce it has finally disposed of its D2D manufacturing operation. Earlier this year it gave up its Personal Computer operation. And it is pushing hard to become that trendiest of corporate beasts, a computer services company: it will no longer sell its own kit, but will help other organisations get their systems right.
One project could prove crucial. ICL is leading the Pathway consortium that is bringing high technology into the country's post offices and replacing pension forms with smart cards. These large software projects are extraordinarily tricky to complete without glitches - if ICL succeeds, its chances of finally making it as one of the big boys in high technology will be much improved.
With 22 years to go before he earns his free bus pass, Todd has plenty of opportunity to mould ICL. Though City analysts do not know him as well as the heads of quoted companies, they like what they see. "He is clearly focused and has shown his ability to take tough decisions," one comments.
His youth apart, Todd comes across as a regular kind of chief executive. He is married, lives in Buckinghamshire, has four children and is an enthusiastic follower of mini rugby. He was born in Glasgow of Scottish parents, though his father's job as a civil servant in naval supplies meant the family kept moving.
He took science A-levels at a comprehensive in Plymouth, and was all set to study chemical engineering at Exeter when he decided to take up a sponsored training course as a cost-of-management accountant in the civil service. His progress thenceforward was smooth. He worked first at the state-owned Royal Ordnance factory at Leeds, before moving into the private sector at GEC subsidiary Marconi Space & Defence in 1975. Here he came under the wing of the company's boss Arthur Walsh. He rose rapidly and in 1981 was sent to the States to be chief financial officer at the Marconi subsidiary, Cincinnati Electronics, before returning to the top finance job at Marconi itself.
As a finance man in the GEC empire, Todd frequently found himself under the beady eye of Lord Weinstock. "I many times enjoyed the pleasure of budget reviews with him," he says, with only a little irony. "There's no doubt that having been through the GEC stable of management control has been a great asset."
By now Arthur Walsh had moved across to run STC, and asked Todd if he would become finance director of its subsidiary ICL. The computer company was recovering from the traumas of the early Eighties though it was no longer cushioned by guaranteed government contracts.
Soon Todd was put in charge of business strategy as well as finance. That meant he had a pivotal role as ICL plunged, with the rest of the IT industry, into the bad times of the early Nineties. ICL did better than most companies. While the industry as a whole lost $20bn (pounds 13bn) between 1990 and 1995, it managed to break even and for several years was the only European computer company making money.
The link-up with Fujitsu in 1990 was another example of ICL being ahead of the pack, he believes. An immediate effect was that Peter Bonfield was asked to leave the European Round Table of computer makers. "Today I'm totally welcome," Todd says. "All the others have foreign shareholders too." He says his way of thinking puts him on the same wavelength as the Japanese. "At heart I'm a fundamentalist - I try to understand why things work, rather than just accepting that they do. That's consistent with the way the Japanese think."
Last year ICL lost its good boy's badge when its personal computer operation pushed it into loss. To outsiders, the glitzy launch of the Fujitsu ICL range in March 1995, followed by itsconversion to plain Fujitsu a year later, looks like a U-turn. Todd is adamant it was not a change of mind. "It was an acceleration of a natural process," he says.
The disposal of the factories and the PC business is central to Todd's strategy, sending confusing signals about what the company was trying to do. His plan "to make ICL the best European-based systems and services business" may sound unbearably fuzzy to those outside IT - but it hits all the right pleasure zones within the industry.
He has a clearly laid-out path from here to flotation in three years' time. The group will probably break even this year, he says, "but our short-term financial results are not going to be spectacular". That will change when revenues from the Pathway project start coming through, and he believes ICL should be earning 5 per cent on turnover by the time it is gearing up for flotation.
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