Maistro boss Laurence Cook talks progress and shaping the future of business procurement
A spate of director purchases has helped shares in Maistro (LSE:MAIS) shoot up by 32pc to 4.5p over the last month, giving the business procurement firm a market cap of around £8m. Total Market Solutions caught up with chief executive Laurence Cook to see what the company has been doing since changing its name from blur Group in January this year as part of an ongoing strategic shift.
Maistro essentially works as a middle party between customers who need a project completed and suppliers who can complete that project. Initially, a customer will provide an anonymous briefing and list of specifications for a piece of work, which Maistro will then run through with them before uploading to its platform. Maistro will then look through its database of suppliers to match the project up with those who look most suited to completing the work. These suppliers are then invited to pitch through the platform.
Following this, Maistro will compare the numerous pitches to filter out those it deems most suitable. A selection of the best will then be shown to the customer, who is then free to review and take their pick. Cook tells us one of the things that make Maistro different from other procurement platforms is that its relationship with a customer extends beyond matching them up with a supplier. It continues to monitor the relationship between customer and supplier to make sure that milestones and value for money are being achieved.
To generate revenue, Maistro charges customers an annual fee to access its platform and premium services. A customer’s budget for a project then covers Maistro’s fees and that of the chosen supplier to deliver the project. Cook says the key benefits for customers who choose to use its services are efficiency and cost-savings:
‘The platform means customers do not have to deal with as many suppliers themselves when looking to get a job done. We can vet and onboard a supplier in 48 hours compared to some firms that take as long as three months because of their internal process. If you need to do something quickly then this is going to make things difficult. Additionally, by comparing so many suppliers we can almost always get the cost down as well. As we are growing, we are finding more and more benefits that we can offer a customer.’
The last year has been a bumpy one for Maistro, but Cook tells us the company has emerged stronger for it. As Blur Group, its shares were suspended in June 2017 after it failed to publish its results on time while looking for alternative sources of near-term funding.
This two-month period of suspension triggered an intense phase of change, which saw Maistro shake up its board and hire Cook, who was formerly chief commercial officer, as CEO to replace founder Philip Letts. It also carried out a £1.75m placing to give it the working capital needed to support its new board’s plans to further its enterprise customer base.
This strategic shift has seen Maistro move away from SME customers to establish relationships with multi-national blue chips across numerous sectors. It has also slashed operating costs and streamlined its business to help secure long-term financial viability. Finally, it is developing its ‘Procurement as a Service’ cloud platform and plans to use enhanced AI to automate parts of the procurement process.
In September, it carried out a further £1.2m placing to secure enough working capital for two years of growth before renaming itself Maistro in January, creating further distance from its past branding. In its 2017 results, released in March this year, the firm revealed that it has made good progress on all fronts of its new strategy, winning new business from new and existing customers and continuing to develop its platform.
As Cook put it to us: ‘I believe we have now turned around from where we were before and are now focused on growth. The model itself has been proved, we know we can acquire customers and we know we can grow within customers. Now it is about doing more of the same but increasingly quickly. Whereas before we may have needed projects from hundreds of SME companies, we now need to work with far fewer large enterprises who are changing their business model or the way they procure. If we can service them in the right way, then the huge amount of volume on offer will provide us with a great amount of support.’
Moving on up
Last week, Maistro announced a commercial partnership with management procurement consultancy Odesma to accelerate and optimise the procurement of business services and create operational efficiencies. Cook told us that it could look to form more of these partnerships going forward, as a way to enhance its model.
He also expects Maistro to benefit over the next 12 months as Brexit and its associated implications force customers to change the way they procure services: ‘Brexit could possibly throw up some cost pressures, and many companies cannot necessarily pass these onto customers so they may need to cut some costs, and to do this they may need to change the way they procure.’
Perhaps the biggest focus going forward, however, will be the development of technology that will allow Maistro to automate some of its work. Cook tells us: ‘Now we are starting to develop a platform to automate some of the lower-price projects. This will allow us to quickly match up suppliers with customers as our volume continues to increase. The more and more we develop our supplier database, the more intelligent the database gets, meaning it can find suppliers more quickly. It’s almost a virtuous circle.’
Cook and his board’s faith in Maistro’s prospects received some tangible backing at the end of last month with the announcement of a number of share purchases. On 23 July, its shares rose 12.5pc when it announced that Cook and chief financial officer Ian Cleverly had purchased £10,000 worth of shares each. They rose a further 12.8pc on 25 July when chief technical officer Mark O’Shea bought another £10,000 worth of shares.
The bottom line
Maistro is still establishing itself in the wake of last year’s difficulties, and many investors will no doubt want to see it create more distance from past mishaps before investing. That being said, the company is focused on developing its platform and business, and up-fronting this expenditure could benefit it greatly as it moves forward.
News-wise, Maistro has been particularly quiet this year, something that appeared to lead its share price lower prior to the strong performance seen over the last month. With that in mind, it may be worth keeping an eye out for the firm as it develops – if Cook can deliver on his plans then the firm could be an interesting punt.
Laurence Cook recently spoke about the company in a recent interview here