Gary Stokes, chief executive officer of ‘product management services’ concern Regenersis, is striving to steer the once-ailing company towards long-term growth opportunities after a drastic restructuring and rebranding drive.

Results for the year to June showed an impressive turnaround of a £10.7 million loss to pre-tax profits of £3.9 million.

Stokes, who joined the company last year, says it now has the ability to invest in new facilities that may not reap instant returns but should pay off in growth and profits over the longer term.

Based in Thurrock, Essex, Regenersis, which handles product management for consumer and commercial technology concerns, increased turnover nine per cent to £105 million in the last financial year.

More important was the internal overhaul, which has seen net debt of £16.5 million 18 months ago turn into £700,000 net cash and enabled Stokes to renegotiate a £16 million banking facility.

He says this transformation provides Regenersis with adequate ‘headroom’ to make the investments it needs for future growth. He also strongly hints that the restoration of the company’s finances will allow it to consider restoring its payout to shareholders and returning to the dividend list at the end of the current financial year.

Regenersis began life as Fonebak and, among other activities, repairs, remarkets and recycles mobile phones and other technical equipment.

It took over Stokes’s previous company, mobile phone repairer CRC, last year.

On coming aboard, Stokes found a raft of inherited problems. Among them were an ill-fated foray into low-margin mobile phone broking, the loss of a major contract, high borrowings and loss-making acquisitions, including one in Romania.
He soon set about closing surplus sites, ‘downsizing’ Romania and aligning it with CRC’s operations.

Regenersis established a sales presence in Hong Kong, rationalised the Fonebak business and moved to sort out its debts.

This process has focused Regenersis on two core service areas: repairs and environmental activities.

The latter include lengthening the life and serviceability of products and disposing of them in an environmentally friendly way, with environmental audits supporting the company’s claims and no use of landfill.     

Stokes describes the new Regenersis thus: “If a product fails, we will fix it. If the product
is no longer in use, we will find a new market for it. If it is beyond use, we will recycle it safely and responsibly.’

As its revamp has succeeded, the company has won business from the likes of Apple, Sony Ericsson, Virgin Media (set-top box repairing) and Dutch group UPC. Regenersis has also renewed an environmental services contract with mobile phone group O2.

In the year to June, Regenersis doubled its gross operating margins. Looking ahead, Stokes concedes that the group is spending on developing new operations and clients at a time when consumer markets are ‘tightening’.

Chairman Jeff Hewitt agrees that the consumer market has ‘worsened considerably’ in recent months. ‘We service high-value technology products,’ he says, ‘and in the majority of cases the end user will be a consumer.’

However, Hewitt argues that the ‘financial stability’ now achieved by Regenersis gives it scope to capitalise on new opportunities within the growing technical and environmental market. He cites ‘a shortage of good-quality capacity’ across Europe, with Central and Eastern Europe ‘particularly buoyant’.

Clearly, the short-term outlook may not be particularly sparkling. But in the longer term, Regenersis seems to have put itself in the right position to build a strong business, with the prospect of a dividend next year adding some spice.

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