FGH Security directors wow business moguls on Dragons’ Den

Security Industry Authority (SIA) Approved Contractor FGH Security’s managing director Peter Harrison and business development director Wesley Downham made a truly stunning pitch for investment in their company on tonight’s edition of the BBC’s Dragons’ Den.

So stunning, in fact, that the Lancaster-based guarding company became one of only a handful of organisations to have been offered the full sum they desired by all five Dragons – Peter Jones, Theo Paphitis, Duncan Bannatyne, James Caan and Deborah Meaden (the team since Series 5) – across the eight series for which the massively popular show has now been running.

Speaking exclusively to SMT Online, a clearly delighted and very proud Harrison explained: “We initially applied to Dragons’ Den when we were looking at ways of purchasing the Guardhall Security Group. We checked out the rules on the BBC’s website and sent in our application. As things turned out, though, we funded this move back in February with the help of NatWest and the RBS.”

Naturally, the BBC needed an alternative reason as to why Harrison and Downham – whose well-respected company won the 2009 Security Excellence Award for Best Practice in Door Supervision – still wanted to appear on the show and pitch for investment.

“We then said we needed funding to purchase Advanced CCTV Ltd,” added Harrison. “By the time we went to see the Dragons, though, and had finished filming with the BBC’s production team, we’d already purchased the assets of that company as well. On that basis, we then asked instead for money to fund our upgraded computer system, developments at our freehold premises, the purchase of a Bold Communications Gemini alarm management suite and a new electronic key safe.”

What happened on the programme?

Introduced by Dragon’s Den host Evan Davies to face what he described as the “fearsome” investors, Harrison and Downham were the last two ‘contenders’ on tonight’s programme (appearing at 12 minutes to ten o’clock non-real time, to be precise) and, thankfully, they weren’t subjected to Dragon Bannatyne’s unique version of ‘The Sir Alex Ferguson Hairdryer Treatment’.

The investment they were looking for was GB pound 75,000 in return for a 10% stake in the company. The pitch detailed some of FGH Security’s 2,000 clients, who include the NHS, local councils, Greater Manchester Fire and Rescue and – in the private sector – the Subway franchises.

A confident and (in Davis’ words) “very professional” Downham revealed that the company’s turnover for 2009-2010 stands at GB pound 2.4 million, realising a net profit of GB pound 100,000. Projected forecast suggests an increase in turnover by GB pound 1 million and a GB pound 240,000 profit going forward.

Deborah Meaden was first to question the duo: “Why are you here?” said the only female Dragon. “We’ve taken some risks in the past and at times they’ve been costly,” replied an honest Downham, “so we’d like to try and avoid them in future.”

When asked what their ambition was, Harrison stated that he wishes to do an even better job for the company’s clients, while Downham pointed to a desired growth in the FGH brand so that it could cover commercial and domestic arenas. Not unreasonable ambitions.

In response to Dragon James’ Caan’s cross-questioning on what the company’s staff members actually do on a daily basis, Harrison explained that 100 operative staff are door supervisors and 60 others serve as security officers – all on a PAYE basis.

“Very few entrepreneurs grow through acquisition,” opined Caan, “but you have done so with a level of sophistication that’s most impressive.” He immediately offered Harrison and Downham the investment they craved.

Paphitis and Jones: the chosen ones

Theo Paphitis couldn’t immediately work out what the incentive would be for him to ‘join the party’. Quick as a flash, and with typical northern humour, Harrison responded: “Well, 10% will buy you a new car every year, Theo!” That made Mr Paphitis chuckle no end!

Duncan Bannatyne asked the guys about their background and, when the full picture emerged, all the Dragons were even more ‘on side’.

“It’s difficult for me to find a reason not to invest,” urged Meaden, who asked for a 15% stake in return for her GB pound 75,000.

Bannatyne wanted a higher stake than 10%, and suggested he would be willing to give Harrison and Downham GB pound 100,000 for 20% of the business.

At this point, Theo Paphitis weighed in with an offer of GB pound 75,000 for 10% before Peter Jones pointed out that Wireless Logic would be a massive bonus for Harrison and Downham’s business in terms of the links it could – literally – provide for them. “I need to make sure I’m going to win before I make you an offer,” said the ever-shrewd Jones.

That offer came in at GB pound 75,000 for a 15% stake in FGH Security.

In the end, having consulted each other the Lancastrian Dynamic Duo asked Jones and Paphitis to split the difference, Harrison suggesting that each of the two Dragons take a 7.5% stake.

The final deal worked out at a combined GB pound 100,000 from Paphitis and Jones for 10% equity each, dropping to 15% as and when the investment is paid back.

“Pitch perfect” as Evan Davis rightly said at the end of the programme, before he wondered whether Harrison and Downham could themselves be the Dragons of Tomorrow.

Belief in themselves and the company

Following the pitch and discussions – a process that lasted over two hours but was chopped down to 15 minutes or so for the programme – Harrison and Downham were both elated and in shock.

“To be honest, we couldn’t believe it at first,” explained Harrison. “We’ve always believed in ourselves and our services, of course, but to have five of the country’s key business leaders and personalities jousting to play a part in FGH Security was phenomenal. It didn’t really sink in until we were driving home from London once the filming had ended.”

Harrison and Downham have since taken part in an initial meeting with Oliver Tucker – the managing director from Peter Jones’ company Wireless Logic – in relation to how FGH Security’s Alarm Receiving Centre (ARC) might work alongside some of Wireless Logic’s client operations.

“During the due diligence process,” continued Harrison, “one of the pivotal questions we’ve been asked by both Peter and Theo’s teams was: ‘Who can we put you in touch with?’ Of late, on top of dealing with the work that comes through the door by word of mouth, we’ve also been merging the FGH and Guardhall operations. We’ve been so busy we’ve hardly had time to stop and think!”

That due diligence process is ongoing and, according to Harrison, “should be a very lengthy procedure”. It took Harrison and Downham six months to carry out due diligence for the purchase of the Accrington-based Guardhall Security Group, but there’s full expectation that matters in relation to the Dragons’ Den funding will be finalised “in the next two months or so”.

Background details on FGH Security

To bring you up-to-speed on the company, FGH Security provides a range of services to public and private sector clients right across the country. It’s made up of two brands – FGH Security itself and FGH Guardhall.

The former covers all facets of security guarding and event security. FGH Guardhall, meanwhile, is the company’s electronic security solutions arm, concentrating in the main on intruder alarms, CCTV, access control and the increasingly popular discipline of remote monitoring.

For those fact fans among you, Guardhall Security Group’s offices were used to train the pilot scheme intake for what we now know as Police Community Support Officers (PCSOs). In addition, it was 13 years ago that the first PCSO walked out of its Accrington offices for a ‘test’ shift.

“FGH Security and its subsidiaries have been growing at a steady 30% for some years now,” suggested Harrison, “and we don’t wish to upset that steady growth. Both Wesley and I feel that managing a company which just maintains its existing client base and doesn’t grow must eventually become a really boring task but, on the other hand, it would be nice to not have to constantly think about change management.”

Harrison’s delighted colleague Wesley Downham explained: “I don’t think people realise how much pressure you’re put under once the Dragons start firing questions at you! I know it makes for good television, but it’s also one of those moments where you either sink or swim.”

Having been an avid viewer of the programme since it started, it’s easy for me to vouch for the fact that plenty more people have buckled where Harrison and Downham shone and, not to put too fine a point on it, excelled.

Homework completed with aplomb

It was obvious from watching tonight’s programme that the duo really had done their homework. “We knew our pitch inside out,” eulogised Downham, “and had answers to most of the Dragon’s questions immediately to hand. I think that’s what really made us stand out. I was really hopeful, but nothing could have prepared me for all five of the Dragons making an offer. Honestly, it’s the stuff dreams are made of!”

According to Harrison, despite the cutting remarks and summary dismissals we all see on the TV the Dragons themselves are all very pleasant people who “offered really good advice” and encouragement.

“It’s fantastic to think that, through sheer hard work and vision, we’ve taken a company that originally employed just ten people back in 2003 and turned it into a multi-million pound security management company in which people of the calibre of Peter Jones and Theo Paphitis can see the long term potential.”

As stated, it was Dragon James Caan who made the first offer after just a few minutes. “This was immensely encouraging,” enthused Harrison. “By the end of our time in the Den, it was hard to keep track of exactly who had offered what.”

Harrison and Downham took the short but nonetheless classic walk to the back of the somewhat austere-looking room in which budding entrepreneurs make their pitches, and then attempted to recall just what had been said before taking their final, crucial decision.

“What nobody will realise from watching the programme is the fact that we were in front of the Dragons for over two hours,” explained Harrison, “but even that’s not really long enough to sum up a business that employs over 200 people and has been operating for seven years.”

Quick to heap praise on the staff

Commendably, Harrison and Downham have been swift to heap praise on their staff. “We would not be where we are without our fantastic members of staff, Brian,” Harrison told SMT Online. “Our management team has changed little over the past three or four years, so we’ve all bonded very well. Some of our front line staff members have also been with us since we started, which makes a massive difference when you want to provide a quality service.”

Harrison and Downham are “exceptionally proud” to be where they are today, and rightly so. For his part, Harrison was brought up by his devoted mother after his parents sadly split up. “It wasn’t that cool for people to get divorced back in the 1980s, and it definitely didn’t make for a high standard of living,” he said with a tangible degree of sadness.

“My mother was busy looking after me and my two younger sisters, so for most of my childhood the family was on income support.” Free school meals and free school uniforms were very much the order of the day.

“I’ve always worked hard, though, ever since I got my first job [at the tender age of ten]. From the age of 13 I stopped accepting money from my mother for clothes and food as I wanted to see that cash spent on my sisters instead.”

By his own admission, Harrison tried his hand “at loads of money-making schemes” and was only at university for a short three months before he decided to set up FGH Security.

“Whenever I was meant to be studying, there was always too much of a draw in my life to be out and about trying to make money. Wesley was brought up in Leigh and, like myself, had little money as a child.”

Downham’s own situation wasn’t helped by a rare muscle degenerating disease that left him wheelchair-bound for some of his teenage years.

“I think this has definitely fuelled Wesley’s desire to make something of himself, and get to where he is now,” said Harrison in bullish tones. “Like myself, and perhaps because of his poor upbringing, Wesley has always been keen to earn honest money. University didn’t really suit him in the end, but at least he tried twice.”

The publicity flame burns brightly

Only last week, Harrison and Downham discovered that the company had been given a mention in a new book by Robin Barratt and Charlie Bronson entitled ‘Respect and Reputation’ that – in the main – is all about how to be a great door supervisor. The flame of publicity is burning bright, then, but what next for security guarding’s Dynamic Duo?

“As I said, Brian, we’ve been extremely busy of late, and we’re now in the final stages of preparing for the Dragons to come on board,” stated Harrison. “Peter and Theo have high expectations for the future of our company and, in particular, how it’s going to develop over the next few years.”

Harrison knows full well that “there’ll be a few immediate changes that will really give the company a boost”.

For starters, FGH Security is looking to add more connections to its ARC and, thanks to the new web-based software that has recently been installed, customers will be able to log in and change information – such as key holder details, for example – on a remote basis (as, indeed, can third party installers who also use the ARC).

In conclusion, Harrison told SMT Online: “I’d like to think that, over the longer term, the company will become one of the major players in the national market and not just the North West region.”

What a marvellous success story. It doesn’t get any better for a guarding company than to have appeared on a national TV programme that’s so popular, and to have been lauded to high Heaven by five of the most important business moguls this country has to offer.

This is where security guarding can be, needs to be and must be, and SMT Online would like to publicly congratulate Peter Harrison, Wesley Downham and the whole team at FGH Security for putting themselves – and, indeed, the guarding industry per se – in the best possible light.

For more information about FGH Security and its working practices, or to discuss your security needs as a customer, send an e-mail to: [email protected] or click the link to the company’s website (located on the right hand panel of this page)

If, like myself, you’re into social media, you can also follow FGH Security’s progress on Twitter (again, see the right hand panel of this page for the relevant links).

Further information on Dragons’ Den

First launched in Japan, the Dragons’ Den format is now an international brand with versions airing in countries right across the globe.

The basic format is that entrepreneurs pitch for investment in the Den from the Dragons, each of whom are venture capitalists willing to invest their own money in exchange for equity.

Dragon’s Den first broadcast on the BBC on 4 January 2005 and, since series five, the five business leaders on board looking to ‘splash the cash’ have been Duncan Bannatyne, James Caan, Deborah Meaden, Peter Jones and Theo Paphitis. Here’s a short biography on each…

Peter Jones

Peter Jones’ entrepreneurial journey began at the tender age of 16, when he founded a tennis academy. His career then took on a new look when he established a computer business and, later, a computer support company.

At the age of 28, Jones joined corporate giant Siemens Nixdorf and ran its computer business in the UK. In 1998, he founded the Phones International Group, a telecommunications firm that now generates annual revenues in excess of GB pound 200 million.

Today, his business interests range from telecoms, leisure and publishing through to TV and media. He has won many national awards, including Emerging Entrepreneur of the Year back in 2002.

Now in his early forties, Jones is considered to be one of the UK’s leading young businessmen.

In 2008, a national newspaper challenged Jones to sit an A Level business studies examination which he duly passed with flying colours, gaining an A grade without having formally studied the course material.

He was awarded the CBE by Her Majesty The Queen in the 2009 New Year Honours List for services to business and entrepreneurship.

Theo Paphitis

It’s fair to say that Theo Paphitis is one of the UK’s most high profile businessmen, the Paphitis Empire spanning retail, property, finance and consumer goods.

The young Paphitis’ family emigrated to Britain from Cyprus in the 1960s. His formal working career started as a junior clerk with a Lloyds of London broker before he moved into retail at the age of just 18. He then moved into property and corporate finance, setting up his own company aged just 23.

Football fans will know that Paphitis was chairman of Millwall FC for eight years, taking the club out of administration and into the Championship (and, eventually, to the FA Cup Final against Manchester United and then into Europe for the first time in the club’s history).

He’s perhaps best known as The Reviver (of the fortunes of notable retail brands such as Ryman, La Senza Lingerie (UK), Contessa Lingerie, Partners the Stationers and Stationery Box). Paphitis sold his interest in La Senza and Contessa in 2006, and now retains a minority shareholding.

In 2008, he combined the stationery businesses to launch a new chain, Ryman Stationery, of which he is now chairman.

Early last year, Paphitis was appointed patron for Skillsmart Retail, the Sector Skills Council for the retail vertical which is committed to driving up skills levels in the industry. His special areas of responsibility are as the Retail Apprentices’ Champion and for the new National Skills Academy for Retail.

Duncan Bannatyne

Tough-talking Glaswegian Bannatyne made money from selling ice creams by way of his company ‘Duncan’s Super Ices’. He sold that business for just shy of 330,000 and then moved on to nursing homes.

A poverty-stricken childhood had steeled Bannatyne’s desire to make his fortune from an early age. After a naval career which included a spell in military prison, he drifted from job-to-job and ended up in Jersey. It was here that he made the decision to turn his life around.

Bannatyne sold the nursing home business for GB pound 46 million in 1996 and, during the next decade, expanded into health clubs with the Bannatyne chain to his name. He also owns bars, hotels and property. For the record, Bannatyne’s is now the largest independent chain of health clubs in the UK.

Quoted on The Sunday Times 2009 ‘Rich List’ as having wealth to the tune of GB pound 320 million, Bannatyne holds an OBE and was recently awarded an honorary Doctor of Science (DSc) from Glasgow Caledonian University for services to business and charity, as well as an honorary Doctor of Business from the University of Teesside (DBA).

James Caan

Cann began in business working out of a room the size of a shoebox on Pall Mall, and has been creating, building and selling businesses ever since.

He left school at 16 and, rather than joining the family business, decided to go it alone, taking office and retail jobs until he found his specialism in the recruitment sector.

In 1985, Caan established the Alexander Mann Group, one of the UK’s leading HR outsourcing companies, and achieved a turnover of GB pound 130 million before selling it to a private equity firm in 2002.

A graduate of the Harvard Business School’s prestigious Advanced Management Programme, in 2003 Caan was named PricewaterhouseCoopers’ Entrepreneur of the Year, and more recently served as a resident entrepreneur mentor for MBA students at the London Business School.

Deborah Meaden

From an early age, Deborah Meaden knew she wanted her own business.

Having left school after O Levels, she studied at business college and, following graduation, worked as a sales room model in a fashion house before moving to Italy.

At the age of 19, and with very little capital, Meaden launched her own glass and ceramics import company supplying upmarket stores such as Harvey Nichols. Her next business venture was starting up one of the first Stefanels franchises in the country, but she soon became dissatisfied with the franchise model and sold up to her business partner.

Several successful businesses in the leisure and retail sector later, she joined her family’s business. Starting out on the shop floor, Meadedn eventually became managing director of Weststar Holidays. In 1999 she went on to acquire the major shareholding thanks to a management buy-out, later selling the company in a deal worth GB pound 33 million.

Meaden joined the Dragons in 2006 at the beginning of Series 3. Having sold her remaining stake when Weststar Holidays was offloaded for GB pound 83 million, Meaden is now a full-time investor with a portfolio which ranges from fashion to software, waste management and market research.

For further information on Dragons’ Den access the web link on the right hand panel of this page

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