Concierge Technologies is a small conglomerate with four wholly owned subsidiaries spread around the world. The largest subsidiary, Wainwright Holdings Inc. is an ETF commodity money manager with about $3.3 billion in assets under management (as of Jan 31, 2018) and is based in Oakland, CA. Their other businesses in order from oldest acquisition to newest are Gourmet Foods in Tauranga, New Zealand, Brigadier Security Systems in Saskatchewan, Canada, and Original Sprout in San Clemente, California which we just acquired in December 2017. To learn more about the Concierge Technologies, see our recent interview with Nicholas Gerber below:
Q: Could you tell us something more about the company?
A: Each of our businesses are profitable, established and have good management in place. Concierge is essentially a holding company and does not run the businesses on a day to day basis. Their respective management teams are responsible for profitable operations and reporting up to Concierge as the parent.
We’ve come a long way in just 3 short years. In 2014 we had two operating subsidiaries, neither of which were profitable, about $3M in annual revenues and virtually no cash reserves. As of June 30, 2017 we had over $32M in annual revenues, $19M in assets, no significant debt and strong cash reserves. We look to improve those numbers going forward.
Q: Concierge now owns four profitable businesses; could you tell us something more?
A: Our four businesses: commercial-scale bakery specializing in New Zealand meat pies, residential and commercial security system installation and alarm monitoring, asset management and now the business of manufacturing and distributing all natural, non-toxic, vegan hair and skin care products, at first glance appear to have nothing in common. They are in different industries, in different geographic areas, that sell to different consumers. But they do have a few commonalities, they are: Profitable, Established and have Management in place. And, they had managers who cared about the reputation of the business, employees, customers and their history so the focus was on building the brands and growing together. It is much easier to transition ownership when management has the same goals we do; that is, insuring sustainable profits and a sound business model well into the future.
They are also leading firms in each of their market niches. Our customers include nationwide grocery store chains, major brand gasoline and convenience stores, government offices and installations, public facilities, resorts, and even England’s royal family. Our products are well known in the retail marketplace, but our company is not well known in the financial arena.
Q: How is Concierge different from other firms who seek out acquisition targets?
A: There are plenty of private equity funds happy to engage in and pay top price during business sales auctions. These same firms then will treat the newly acquired company poorly by leveraging it up with debt, creating synergies by firing people and pushing hard on the accelerator to see how fast it will grow even at the expense of the firm’s unique culture. After all what do they care? To them the new firm is just one of a hundred portfolio companies they will have to sell after 5-10 years to satisfy their limited partners. We’ve got a different approach altogether. We invest in the long term growth potential of small to medium size businesses. We are all about reinvesting, not divesting. We generally pay the asking price for a business because it’s worth it. If it wasn’t worth the price, we wouldn’t buy it. We don’t shop at auctions. We also try to not dilute our shareholders through stock-for-stock transactions but rather use cash earned from operations so all of our shareholders benefit in equal proportion.
Q: What advice do you have for early entrepreneurs?
A: Stay focused, be tenacious. Stick to your business plan but don’t be so dogmatic that you can’t pivot, forget your life outside business or know when to quit if you are wrong.
There is no easy path to success, and the road is long so enjoy the journey.
I don’t mean to sound like a stale fortune cookie but the reason old sayings are old is because they are true and as valid today as when Cato, Sun Tzu, Machiavelli, or Carnegie spoke them. A classic liberal arts education is as good a basis for entrepreneurs as are backgrounds in accounting or business.
Q: Which industries hold the most promise for investing into?
A: Practically every asset class is expensive these days. As an old-fashioned gum shoe stock analyst, I don’t see many firms or industries undervalued. It is actually easier to reverse the question and ask, what industries should I stay away from? That’s any easy one, industries and firms about to be swamped by technology. If the Internet is sucking up retailing then which stores have great and fun merchandising? Town squares still provide a place for community activity and where people watching happens. New Boba chains are taking advantage of this. Likewise, if robo-advisers are collapsing the margins brokers had then which advisors are using technology to provide more add on services like accounting, bill pay, elder care and daily money management?
Q: What’s the goal you’re aiming for?
A: My job is to do something smart with the profits the operating subsidiaries make. There are only five things we can do with the profits; 1) Pay them out as a dividend, 2) Reinvest them back into the operating business they came from, 3) Invest them into another subsidiary, 4) Do nothing and let cash grow, and 5) buy other private or public firms. My overwhelming preference is #5.
My other concern is to raise the awareness of who we are and what we’re doing. To be fair to our shareholders, we need to stop flying under the radar and get some visibility. One way I hope to accomplish this is greater communication like this interview and to list Concierge stock on a larger exchange hopefully later this year.Activate Social Media: