From Ports to the Deal Table: How FP&A Earned a Seat at Peel Ports

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Speaker B: This is FPNA Today. Foreign.

Speaker A: Welcome to FP&A today. I'm your host, Glenn Hopper. Our guest today is Alexander Roche, Group deputy head of FP&A at Peel Ports Group, one of the UK's largest port operators. Alex is a SEMA qualified finance professional with 14 years of experience across data analysis, management, accounting and financial planning. He spent nearly 12 years at Peel Ports, working his way from assistant management accountant to leading FP and A across the group. Along the way he's helped bring finance into the M and A process, built valuation models for acquisitions and earned FP and A a seat at the deal table. Alex, welcome to the show.

Speaker B: Yeah, thank you very much for having me.

Speaker A: Uh, we talked before this show and I love, I always love talking to people who come into FP&A, as I did, sort of through a side door. And I think it's interesting so much when you talk to people how you can sort of make the connection between what they were doing before and how they rolled into, uh, into FP and A. But your background starts in electrical engineering and pensions data at Mercer and I'm wondering like, from that you were pulled into management accounting. And I'm wondering how, like, I just picture those analytical roots can kind of shape the kind of finance professional you are. Can you tell us a little bit about that transition?

Speaker B: Uh, yeah, so I kind of fell into management accounting a little bit. Uh, so it was actually on the back of starting my own business. So I was actually, whilst I was working as a in pensions data analysis, I was kind of starting my own, starting my own business. And I thought, having this analytical background, I thought, what's important in business? What's like the lifeblood of business? Well, it's finance. It's ultimately all about money. So I thought, well, I better understand money a little bit. So I went and did the cema, uh, which is a chartered institute of management accounting SEMA certificates, just to give me a little bit of financial grounding so that I could confidently go and start my own business. During the process of that, I was like, you know, I actually really enjoy this and I think it's really really interesting getting this. The idea that you can use like financial technical expertise to actually make a commercial difference to a business. I just found so exciting that I thought rather than going through the hardship and difficulty of starting my own business, how uh, about I just go into this and make it my career. Uh, so that's when I ended up applying for a job, uh, uh, and getting a job in management accounting.

Speaker A: And I love that lens because Warren Buffett says accounting is the language of business. And you really. I worked with so many founders through the years who maybe had an mba, maybe they didn't and they just were really good at whatever they started their business with. And I did a lot of early stage CFO work and you come in and they don't really know. I mean they might have a QuickBooks or a zero account or uh, whatever, but they're not really paying. You know, they're just looking at their P and L if anything and they're, you're thinking, you know, treating maybe they're doing cash accounting and all that, but after they work with the finance person for a little bit they really start to understand more and more, see the levers where they can control the business. And I'm imagining that's sort of how it rolled out for you too when you look under the hood at the financials.

Speaker B: Yeah, absolutely. And um, I've actually got some quite direct experience of that. Not in a business but actually in a charity. When I went out into Cambodia doing some financial consulting out there for like so pro bono kind of stuff, uh, for a charity, uh, they had no financial expertise at all. So similar situation I guess to you know, founder kind uh of thing. They, their focus they were brilliant at, you know, they were I think providing education to your children kind of free of charge throughout Cambodia. Really good worthwhile charity. They didn't know anything about finance at all. They had tried to make a cash flow model in Excel to forecast out to the, to their financial year end. They were forecasting to have £12,000 in their bank account. Sorry, uh, £12,000 in their bank account, uh, by the end of the year, which in Cambodia is. That's a lot of money. So that's pretty good. Unfortunately they made a load of mistakes when they were calculating that. So I kind of redid it for them and it actually turned out they were ending the financial year uh, with, they were going to end the financial year with US$12, just literally 12. And it was just, I mean that as well showed me like the, the sort of power of Finance and the fact it is the, really the lifeblood of a business or an organization like that and, and how valuable financial expertise is in those kind of areas.

Speaker A: Absolutely. As you were telling that story, I. Apropos of nothing, but I've got to share this. I was doing some consulting work and I came into a business that was. They weren't dying, but they weren't growing. Well, I say they weren't dying, but they handed me their financials on the first day when I got there and I was going through and I was looking at them and I got down to the EBITDA numbers and they were single digits. And this is a business that was doing, you know, 10 to 15 million a year in revenue. And I got down to the EBITDA lines and they were just single numbers, like 5, 7, you know, negative 3. And I was like, are these thousands? Hundred, thousands? And they were, nope, those are dollars. And I just could not believe how they were just. And that was the EBITDA line that wasn't even, you know, counting the loan service and all that. But it was kind of funny to see, uh, those, those single digits, um, from a, from a company. But like I said, apropos of nothing, but as you, you know, the, the $12 thing, I can, I can definitely relate to that.

Speaker B: Yeah. Okay. It's a, it's a scary position, but that's where, you know, we can come in and add real value. Because in that case, like, they were able to go away and sort of start to scramble for cash and make sure that they really managing the cash flow tightly, which they wouldn't have otherwise planned to.

Speaker A: Yeah, absolutely, absolutely. Um, and it really, it's like a magic wand. Once you are not a magic wand or at least a crystal ball maybe where you can understand better by having that, that financial, um, background. Your first accounting position, was that at Peel Ports or was that. I mean, I know you did the charity, but then did you go straight to Peel Ports?

Speaker B: Uh, yeah, yeah, absolutely. So my whole actually finance and accounting career is at Appealport's group. Yeah. Yeah. Ah, okay.

Speaker A: M. So You've been there 12 years. Came in assistant management accountant. Now you're the deputy head of FP&A. So what did it. I mean, a lot of times we see FP&A people move a lot and usually it's the mantra. The thinking is, well, if you want to move up, you have to go to a different company and take the position there because it's really hard to move up internally. But I'm wondering From your perspective, I mean, you have at this point a lot of insider knowledge. What kept you building your career inside one organization rather than moving around and kind of chasing after whatever that next title or that next rung could be?

Speaker B: Yeah, it's a good question. And um, definitely, you know, there are, ah, other advantages as well as just going up to the next rung. There's other advantages, of course to moving about is that you get exposed to more different business models and things like that. So there is that advantage. I think I stayed, I guess in part because, you know, I have, I've been lucky enough that I have been able to do that at one organization as well. Like the financial controller. I remember he once said to me, you know, uh, Alex, you're really loyal to this company. And I. And I said to him, well, I'm not, I'm not loyal to the company. It's just that you guys keep giving me opportunities. So I'm going to start. Yes, you might need to move to get the opportunity that's possible. But also, you know, I'd encourage people as well to reflect on whether they can get, uh, the opportunity where they are as well, because it may well be there. Obviously there's simply a numbers game. Some people will stay and some people won't. Ah, that's just the nature, uh, of the business. But I would say it's not impossible to get that exposure in one business so long as well as the business is kind of of the right size, which I think I've been lucky in that I was in Peel Ports, which is. So it's like 800 million or so. 800 million pounds. So like a billion US dollars, uh, revenue, about half of that in any, but are, uh, spread across, you know, 10 or so divisions. So it's quite a large company, but not like the absolute biggest. So what you end up with there is exposure to quite a lot of complexity on like the full remit of everything from shareholder and financing stuff down to working on a single business unit. So you can get quite a lot of breadth in a company of that size in terms of your individual exposure.

Speaker A: Yeah, that's a great point. And I think, you know, as long as you continue to excel and kind of carve out your own path at a company that size, you can sort of create your own destiny. I mean, I know it doesn't. We always want it to come quicker, but you can, as you learn more and apply more and have new skills and have new value to add, it kind of you just grow with the Organization. So I love that.

Speaker B: Yeah, absolutely. And for me as well, one thing is, although you might not think it, if you imagine, uh, a port business, you would imagine, uh, and certainly I did before I was in it, I imagined it would just be very, very steady. It would grow with the size of the overall economy because, you know, especially the UK is an island. Ports are pretty central to it because, uh, that's the only way to get things in and out. Maybe, maybe planes, I guess, very important to the economy, but it would grow. If construction grows, then obviously more materials will be needed, so we'd have more imports and all that. But Peel Ports actually is a really entrepreneurial organization. Like we're always thinking of different ways that we can save the customer, uh, or that might be through, you know, do a vertical integration. So we'll buy a business, you know, or build a new warehouse that accommodates some specialist material that the customer can bring in. And it's that entrepreneurial thinking, I think, is really exciting and keeps things moving even though we're in one organization.

Speaker A: Yeah. And honestly now I, as you talk about the business, I think that's one of the fascinating things about hosting, um, this podcast is I get to talk to people from so many different industries and I've really. And even now, as you explain it, I'm having a hard time picturing, I'm wondering, you know, without divulging any proprietary secrets or whatever, but for listeners who, like me, don't know the ports and logistics sector, what. What does that. I know, I know you talked about deals a little bit, but what does FPA look like in that world? And are there key KPIs and planning cycles that define your work?

Speaker B: Uh, yeah. So I think ports, uh, at least as, as they are in the uk, are uh, quite kind of disparate businesses and we'll generate EBITDA from a, ah, uh, really wide range of activities. So I think it could be tempting. And you know, we have at times in the past had a plethora of different kind of KPIs that we, that we might look at, uh, and you know, we might do in detail in certain parts of the business. But overall what it comes down to for us is volume that uh, comes over our key side at our ports. And so it's like one ton of volume coming over the quayside. Everything else kind of needs to result, uh, revolve around that because that's where we generate our EBITDA the most, is, is if one ton of volume comes over the quayside. So all our KPIs are based in some way related to that. So we've got obviously EBITDA and revenue per ton that comes over the key. Another thing that we've gotten into complexity with ports is we earn our own revenue at our own ports, but we are also the harbour authority for a given area, kind of a river within the uk, not to get too precise about it, but any vessel that goes down that river. So you know, if something's carrying crude oil, for example, going to an oil refinery here in Liverpool, that uh, vessel will pay kind of a toll to us in order to uh, which we use to maintain the river and make sure it's navigable. They pay that toll to us and that's revenue that we earn outside of our owned ports. And then we have separate revenue that we earn for offloading vessels at our ports. So that's quite a key distinction for us as well is what do we earn on third party volumes going somewhere else and what do we earn on volumes that actually come to our ports? Because the two are then very different business propositions.

Speaker A: I know these are different business units but are they actually different business entities or do they all roll up under, as, as a single company?

Speaker B: Yeah, no. So there are, there are lots of different um, actual corporate entities. There's. I uh, can't remember how many of them are but there's ah, around 30 or so actual entities that we have within the company.

Speaker A: So when you do FP and A, are you doing. How does the company. How many. You've got your consolidated FP and A and then you look at each business unit. Are you actually, are you monitoring each of those separate business units? Is there, do you have a team? Is it. What's, what's that? Because that's a lot.

Speaker B: Yeah, yeah, yeah, that is a lot. So we have a, uh, management structure that we. So we group by profit centers which group into divisions, uh, and then group into. And then ultimately consolidate into the group. So it's based on that management structure that we do all of our forecasting and budgeting and all like that is based on the management structure. So a given division might have five companies inside it, but as far as we're concerned that's just one uh, division which is usually a port.

Speaker A: I bet the consolidation is fun around that.

Speaker B: Yeah, yeah, yeah, yeah. There's uh, ah, a lot to do uh, on that for sure. And there's. We actually have teams within each division as well. So a finance team. So they are on the ground working with the business units within that division and we might have, I'll give you an example, a steel terminal here in Liverpool. They'll work with the manager of the steel terminal to actually work out, okay, how many tonnes do we expect to do in the next year? Therefore what's our revenues, therefore what's our costs and things. And then that consolidates up into our overall budgeting, uh, process. And our role at the center is to one define like how exactly we want to do that. So how do we want them to do that forecast and how do we expect them to phase things and all that, ah, kind of stuff. And also at the group, we set the expectation of what we want the overall group to generate obviously in EBITDA over the next ah, five years, which is kind of our business plan.

Speaker A: Yeah, makes sense. Um, another thing that we talked about before on the M and A side and I love that you didn't come to M and A through investment banking or private equity or anything. You just had to as internal to the business, get up to speed and figure all this out. And I know you had to kind of figure out um, doing business valuations and understanding, you know, discounted cash flow and how whatever approaches looking, maybe looking at comps or whatever. But can you walk us through? I know you said you had a deal team, but you coming to it from the FP and A side, walk us through what the work is. You're in due diligence and I don't know if your work work carries on after an acquisition, if you're helping with the financial integration, but walk us through the M and A process that you're involved in.

Speaker B: Yeah, so we actually first got really truly involved in the acquisition process I think, well, uh, a couple of years ago now when we established this new FP and A team that we have in the business because separately we didn't have a core FPA team which would do this kind of work. And it meant that the deal team didn't really have finance involved from that stage. Finance will be involved more so towards the end of the process and afterwards along the integration and you the very formal due diligence bit, but we weren't involved in like, okay, uh, how much do I actually want to buy this company for? Or indeed sell, sell the company for. The FP&A team now is involved in that quite heavily. And yeah, so our involvement in it then is around, ah, financial modeling to try and work out what the value is, uh, of the business that we might be buying or selling, which then has been a really interesting process. As well, because that then gets us down to how do you actually value the whole of a business and distill it down into one single number? Which I think is just. To me that's absolutely amazing that you can have one number which represents the value of the entirety of a business and all the complexity that goes with it.

Speaker A: You're already using AI for your FPA ChatGPT, Claude Copilot and they're incredible. But here's the thing. AI is only as good as the data you feed it. Right now you're getting confident sounding guesses that you'd never dream of presenting to your board. Now imagine typing a prompt and getting a board ready dashboard backed by your real numbers or a P and L that you'd stake your reputation on. Finance OS consolidates your erp, CRM, hris and spreadsheets into a governed data layer. Every AI output now accurate, governed, repeatable and auditable. Find out why nearly 2000 FP and A teams run on Finance OS with hundreds joining every week. Learn more at, uh, datarails.com Finance OS what I love also that we talked about M. I probably should just recorded when we talked before the show, but at this, when we were talking about this, um, I love what you said about the entity. This is the secret of M and A, obviously. But the entity may have some value to its existing owner. But because the way you're doing this full vertical integration, it could have a different value to you. Like how do you model the gap between those, those numbers? I mean, I guess there's just. That's the secret of vertical integration too is you're going to pick up efficiencies and, and all that with it as well.

Speaker B: Yeah, exactly. Yeah. So I mean the way that, that we tend to do it is we'll say we'll start with what we're buying because if you think about what what we're buying should be effectively what, what the business has done before really, because that's kind of what's proved. Obviously the, you know, the seller might have a different opinion about that. Of course they might say, well no, it's going to grow exponentially, don't you worry. But what we'll say is, you know, well, we can see that the business has done, you know, say it's an X amount of volume, it's done a thousand tons per month in volume for the last five years and oh, it's been pretty steady. And therefore we think that uh, it's going to carry on plus inflation pretty much for the rest of the, of the period or whatever the current situation is, we'll try and model that. And obviously that would then be what. What you then argue is that's what we want to pay for a business. Because that's what you're buying, you can see. Well, uh, that's what it is. That's the value that we're purchasing. We start with that as the basis and then we say, okay, but what are we going to do to improve that business? And not only improve that business, but for us, because it's a vertical integration, we can earn quite a lot, potentially earn more revenue in other parts of our business as a result of, of, uh, buying another. Yeah, so. So when we. An example of vertical integration is one we did a few years ago where we bought a business, ah, which was. Had haulage in it. So that's, you know, um, sort of trucks coming in and out of the port. That then if we have that business, that means we can drum up business there. That means more business will come to our ports. Because if we say, oh, we can get you a really efficient truck service into your warehouse, well, that means that, uh, the customer is going to want more volumes to come through our ports, which means then more, uh, EBITDA for us overall. So we're adding, um, on those layers outside of the business. Which meant that, like, for example, there's one that I've done where I've had to model, do three models. So do one model for what we want to buy, one model for what we think that business can do if we grow it, and, uh, then a third model for what the overall group can do as a result of buying that business.

Speaker A: As you describe all this, I mean, this is in your due diligence and when you're looking at acquisition targets and this is all part of the planning. But you mentioned that until recently, finance wasn't part of the due diligence process. And I imagine there are experts who know the industry and know the business and they can do, probably in their head, kind of the back of the napkin math, and they conceptually get all that. But of course you bring finance in and you've got the models and all that. But how. How did it go about that? Finance did come in the room. Did you have to make the case for FP and A coming in? How, how did all that take place?

Speaker B: Yeah, so, I mean, getting into the room in the first place wasn't too difficult because our CFO was really pushed it and thought, you know, this has got to be the case. So Therefore it was uh, and I think so actually getting there was that was because it was the kind of strategic level Will obviously it makes sense for finance to be in the room. So there wasn't that, there wasn't really pushback for us arriving. But then the question is, you know, do we get invited back to the party the next time? So that is where I think we then obviously want to prove our value and, and, and have to kind of prove where we're coming from. I think it became quickly, quickly became apparent that we did add a lot of value through the clarity of being able to actually put on a page, on a, on a model what this business was worth. Uh, and first one that we did was a uh, sale of part of our business to one of our customers actually. So what we able to do in finance, which hadn't been done previously is we were able to do a full financial model for the sale of uh, that business and show very clearly how exactly that the sale would be valuable to us as a business. One thing, a result from that as well was we'd been doing this deal and we thought we were going to sell at one price. Obviously it won't be able to tell you the actual prices but I'll make up some numbers. So say we were going to sell the business for 15 million. 15 uh, million pounds. When we did the modeling we realized this business that we were going to sell for £15 million was actually worth £20 million, which meant we had to then ah, and that was, it was quite a difficult conversation going back and forth because uh, conversations had already been had at this point to say oh yeah, it's going to be about this £15 million.

Speaker A: And you've anchored them at that point too.

Speaker B: So yeah, yeah. So now uh, and what we were able to do is very clearly state why the business is worth this amount. That actually also gave us a lot of leverage when it came to negotiations because previously we might have had some kind of vague argument as to why it might be worth 15 but now we could actually not prove because it's all forecasting in the end of the day but more robustly and scientifically argue why that is, ah, the number, what it is. And we ended up generating quite a lot more value for the business as a result of that modeling.

Speaker A: And that's huge. And that's showing. That's a spot on way to show that finance and accounting is not a cost center, that you actually are adding value to the business. And I think the whole story too, it's, it Feels to me like a business partnering story as much as an M and A story. And I know we've been talking about it for years, and there's still some companies do a really good job with it. There's a lot of friction in other companies. And, you know, maybe it goes by department as much as by company. But moving in to the M and A process, has that changed the way you think, uh, about finance's relationship with the other functions more broadly, like going into operations or marketing or all the other groups as well?

Speaker B: Yeah, I mean, it's something that I found really exciting as being part of this kind of deal team. Is that so? Something I often hear said within finance is that, you know, we really need to know, you know, the business as a whole. Obviously, the more you know, the better, for sure. But, uh, being in this process has made me realize that everyone kind of brings their expertise and their knowledge to the table. And for us in finance, that, frankly, is the financial side of things, and it's the money. There's a real kind of edge, especially within FPA bits of finance, to kind of want to be business people. And we're super commercial, and. Yes, we are, absolutely. But where do we add the most value is our expertise on the financial side. So it's made me reflect on the fact that what do we. What are we? Well, we are business partners who are experts in finance, and we should be confident in that being, uh, our foremost skill set, even if we might have expertise in other areas and, um, really put a lot of effort into bringing that to the table and bringing expertise on valuations and things like that to, uh, an M and A process.

Speaker A: Yeah, And I think that's an important thing to remember, too, because I can think back at companies, um, where. Where I was previously, and I would. One company, for example, our, uh, chief Revenue officer, happened to also be a cpa. So he wanted to question all of my financials. And I felt like, stay in your lane, man. But that said, you know, he has a different level of understanding of the financials, and so I had to kind of step up and explain it to him as well. Which you talk differently to, you know, someone who speaks the. The language than you do someone who's, you know, doesn't care the difference between EBITDA and net income or, or whatever the. The case is. So, um, it's funny. It's easy to feel it when somebody think they're stepping on our turf. But sometimes finance, because this whole business partnering, we are sometimes embedded in other groups and at least working with them and they're sort of out, you know, we can broaden our lane a little bit, but at the same time, to your point, listen to the expertise of the people who. That is their primary job too. And that, I think that's a key part of business partnering.

Speaker B: Yeah, yeah, absolutely. No, it is. And it's, to be honest, it's really exciting, uh, for me at least, to be in this room with a whole range of experts who can all bring their kind of piece from different parts of the equation and all contribute together. I, uh, think that's absolutely brilliant. And you can get a better result from that, from everyone kind of contributing their, Their part.

Speaker A: Yeah. And I, What I loved early in my career was as the finance representative, I got to be, you know, I was a, uh, maybe even before I was a director, maybe I was just a. Maybe, I don't know, but senior manager or director at a company and I would be in a meeting with several C suite people and listening to their expertise and I was just sort of, you know, there to log it and model it and all that. But it was a great opportunity that I think at that level from other departments might not have been able to be in that room. So I think to your point on, you know, it being the language of business, it's good to have your finance guy in your hip pocket to bring to these meetings.

Speaker B: Yeah, oh yeah, absolutely.

Speaker A: So you've been at Peel Ports a while and I think, uh, you've built management accounting teams during your time there. And I think that as, and especially because you are, you know, over a decade there, you really know the business, that a big part of what you do is you're bringing that institutional knowledge. But there's also, I'm sure there's a cultural knowledge. Do you have an approach as you're developing people, you know, especially those who are, uh, you know, maybe part qualified early in their careers? Um, do you have a sort of a training, coaching approach that you use as you're building out teams?

Speaker B: Yeah, so something that I'm, I'm really passionate about, about doing, especially because, you know, I feel I've benefited from, from people giving me that opportunity as well. Uh, so I kind of really want to. Want to give back in that way. The way I approach it is I kind of try and give like graduated exposure to increasing responsibilities as for people when they, when they start the business to. As they go through. Because, uh, the management accounting team at, uh, Peel Ports Group, I kind of, you know, when I was, I was managing it, uh, it was very much for me, I was seeing it as these people are, uh, the future of the company and I want to, or want to retain them and also train them into finance experts that can go off and be various levels of finance, uh, directors or managers, wherever else in the business. That's what my goal was. So the way I do that is I would say, you know, you come in, you might start with a small business unit as that's your, oh, you need to complete the management accounting for this small business unit. Then maybe they come a bit of an expert at that, they start like budgeting for it and then it's introducing the next level and it's trying to introduce like a gradual exposure to more and more levels of responsibility and more different things as well. So that, so at the end when they come out and they've, you know, got their accounting qualification, for example, they'll come out as a well rounded professional. So I think that's important to give them that gradual exposure.

Speaker A: So it's been a minute since you got your, uh, CEMA qualification and you've had to sort of carve out since then. Um, and I'm imagining with a pretty small team, I know a lot of different companies, but being at corporate, sometimes, uh, depending on the team structure can seem like you're kind of hacking it out on your own. But I'm wondering, as you've developed in your career, are there any skills now that you think are kind of underrated for FP and A professionals, Especially if they want to move from just being junior analyst, individual contributor, maybe moving into more strategic work like valuations, deal support and kind of work you're doing.

Speaker B: Yeah, it's a great question and I think a lot of it is thinking about the why of, of what you're doing and not just doing it. So you're not like, let's take a financial model. What you might see in the first instance is, all right, I need to put some numbers into a spreadsheet and I need those numbers to be right and they need to pop out with a evaluation at the end. Ostensibly, yeah, that's kind of what you're doing. But I think what you got to develop is that next level is what's the strategic objective of the business in, you know, say, pulling this model together, for example, what's the business trying to achieve? Because then not only does that actually help you physically put the model together, because you can prioritize the bits that, that are important to the business and not so much the Bits that aren't. But it means that you can also then be very responsive to, you know, conversations with, you know, say, the C Suite, where you kind of get what, what they want from it as well. I think it was, uh, the, the guy, Simon, uh, Sinek. I, I remember actually thinking, when I was the first starting game out in my career, I thought, well, what a load of rubbish. Because he said, you start with why. He's got a great video. Which I'd, uh, encourage anyone to look up. Start with why. And I thought, well, that's crazy. Why would you do that? Just do it. But now I actually, you know what? Actually he was right. I was, uh. It was the hubris of youth that made me think that. I actually think he's completely right. You always start with, why am I doing this thing? That just unlocks a lot because you can, you can, you can then have the ability to go further into things and add value to it if you know why something is being done. I'd also encourage anyone who's sort of at, uh, that kind of level, maybe they're doing their studies, is if you can't work it out for yourself, you know, just ask the question and try and find out the reasons behind what you're doing rather than just just going away and doing it.

Speaker A: Yeah, there's. I mean, there's an argument to be made that if the right approach to being an FPA analyst is that you're an investigative reporter, you're trying to get to the root, you're trying to find that lever, that key, it's not just building the model. It is okay, but what is dry, you know, find your correlations, Find whatever is causing the model. Where can you find that lever to add value to the business? And I, I talk about a lot of times on the show too, about, uh, confusing the map for the terrain. And I think, and maybe you'll relate to this with your engineering, uh, roots. But I think maybe the happiest I was professionally is those early days of my career where I could just get lost, no meetings. I'm just building out some crazy model. And, uh, and I'm just so excited about how, how it all worked out. But, uh, at that, I, like you said, at that point in my career, I was just like, let me build the best, best model I can. I, I don't care what widgets or cogs or whatever. I was counting. It was just, let's build a cool model.

Speaker B: Oh, yeah, absolutely. Yeah, I remember that. Totally. Like, I'm, um, a huge fan of Excel. You know, I love my Excel formulas and all that. And yeah, I would build like the most fabulous, uh, looking thing without, you know, necessarily truly having the grounding as to what was, what was the priority in, in what I was doing there.

Speaker A: Yeah. And then, ah, those models were so great because if anyone ever, if you ever vanished and someone tried to go figure out the model, it's like so many formulas going across and it's, that would become your intellectual property because nobody else could figure it out.

Speaker B: Yeah, yeah, oh yeah, I had lots of those as well when I was there. Uh, I actually got sort of, uh, admonished by our IT team because I started including quite a complex like macro based, uh, Excel sheet and the IT team asked me the question. I know I couldn't answer the question because they asked me, uh, who's going to maintain this?

Speaker A: Yep.

Speaker B: I was like, oh, yeah, Uh, I didn't, didn't think about that. This is absolutely Byzantine system, black box kind of thing, which is where now I'm like, absolutely, the simpler the better for pretty much anything, including Excel.

Speaker A: Yeah, I'm the same way. And I do kind of miss and I even, I have guests on who are like Excel warriors. And it's, you know, I had my first CFO role in like 2007 and that's kind of when I was more of a receiver of Excel files than actually building them. I do miss that though.

Speaker B: But.

Speaker A: And now with AI, you know, who knows where we're going? But so, and maybe this isn't even AI related, but what are you focused on right now? Kind of. We're always building, we're always. There's new technology now and it doesn't have to be AI related, as I said, but is there something that you're trying to get better at, something you're building or changing in your FP and a function? I mean, where do you kind of see everything going and whether it's internally with the company or with the tech that's out there, or with your, you know, AI that could be in there. Uh, what are you looking at?

Speaker B: So I use AI every day, uh, in work. But I always think it's, I almost call it like a kind of quiet AI in that it's not this absolutely grand game changing thing in like one go. But what it does is it actually smooths out my day and like lubricates what I'm doing quite a lot. Like, you know, there might be, you know, doing an Excel formula, for example. I don't know what the formula is I can kind of have a chat with, with Claude and work out what the best way of doing it is and invariably I'll get to the answer, uh, 20 times quicker than I would have done if I had kind of been searching for it and things like that. So I use AI a lot for those, like, little things throughout the day. I think that's where a lot of people nowadays are getting, already getting a lot of value from AI. It's just not this big grand scheme thing that anyone can necessarily put a number on. It's just making everybody's days slightly smoother.

Speaker A: Yeah, I agree. And of course we're all having existential crises about, um, if A.I. is going to take our jobs. But really it just. Well, for example, Claude is down this morning and I bet productivity around the world just has gone in the gutter. Nobody knows what to do without their bot assistant to help them. But, um, the outputs can be amazing. But with hallucinations, all the issues around, I think that the mistake is say, well, Claude's going to do it for me or chat GPT. I know everybody's talking Claude these days, but there's our, uh, Gemini users and all that out there too. But if you look at it as more of a thought partner and someone to, you know, help you, then let me just hit enter and head off to the golf course or whatever. It's, that's where the real benefits are coming from. And I, I don't think they're even being reported at the levels they are. I think individuals are doing this and whether they're getting more efficient and doing their work quicker or they're doing things that they wouldn't have done if they didn't have AI to help them. But I think the productivity reports are kind of lagging because I think sometimes maybe people, depending on what the policy is at their company, they may be sort of scared to report. Well, if I'm telling them that I'm doing, you know, 80% of my work in AI or, you know, whatever the number is, that they might decide that they don't need me or something.

Speaker B: Yeah, I think there's a, there is a huge fear of that. I think there's also at the moment, I would say some stigma about, oh, you've used AI to do that. And again, I think that comes from the examples of people having done what you said, where they have gone away. Uh, I know there's cases of lawyers, for example, who've actually kind of tried to make a case in court and given legal advice based on just what Claude told them or whatever, A.I.

Speaker A: uh.

Speaker B: And they've actually, uh, been prosecuted, uh, for doing things like that. So that definitely exists. And that, I think gives it a little bit of a bad rep, whereas it doesn't need to, because if you use it as a tool to make what you do better, then that actually is. Is incredibly valuable and just grows your. Grows what you can do. And it can teach you things as well, but it has to teach you the thing. It can't. You can't let it do the thing.

Speaker A: Right, exactly. So, um, we're about to start winding this down, but you mentioned that you're international charity earlier. I don't know if you're still involved with them, but, um, tell me, tell me a little bit about your charity work. I don't know. Is that organization one you're still involved with? Are you still doing any charity work?

Speaker B: Uh, yeah. So the one I mentioned earlier was a separate thing that I did over in Cambodia is like kind of one off consulting. But yeah, so I'm on the trustee board of Peace Brigades International, uh, uk. So it's a human rights charity. So it helps people who have been, uh, you know, for example, if a government or whatever is kind of unfairly prosecuting people, it'll go and go and help them to, to stand up to that all around the world. It does this. Yeah, an amazing charity, and it's something that I feel quite passionate about is finance people as well, uh, using their skills for something like this, where you can actually use your skills and expertise, which are incredibly valuable and hard for charities and nonprofits to actually get hold of because they don't have a lot of cash available to them. And you can actually truly use your expertise to kind of give back. And that's what I do then on the, you know, it's what I tried to do on the board there. So I'm one of the, uh, two finance trustees. So I'll be like the kind of sounding board and give the challenge to the managing director of the charity, things like that, and give that financial lens, uh, also give some security, some level of security to the other trustees who aren't so financially involved. They can kind of rest a bit more easy that, that the finances are kind of in good shape because of. Of what we do in the finance side.

Speaker A: That's great and admirable work. And yeah, my wife, um, works for a nonprofit. Anyway, that's a whole other story. But it's, I mean, very much the case. You have people who are very passionate about their cause and they, you know, finances, yes, they have to sustain the business, but at the same time they don't want to be bogged down in it. So if you can take that expertise and lend it to them and give them that insight and guidance, that's a, that's an admirable thing to do for, for uh, the nonprofit.

Speaker B: Yeah, absolutely. Uh, and also it's something as well that I would, uh, again, encourage someone. Probably you need some level of expertise obviously. So I'd maybe encourage people who've, you know, maybe they've just qualified with their financial qualification. They know what they're doing and things. Charities are like crying out for this sort of expertise. You then get exposure at, you know, I'm sitting on the board and making these kind of board level type decisions, obviously in a small organization. But you would never get that uh, in a, in a commercial organization. So it's a big like, uh, quid pro quo. You get that exposure and expertise in financial communication, things like that, and the charity gets your financial expertise. So it's a big win.

Speaker A: Yeah, I love that. All right, well, let me. We're uh, we're winding down, uh, to our standard closers here. And the first is what is something that our listeners probably wouldn't know about you, Something they couldn't find on your social media profiles or wherever they were looking you up.

Speaker B: Probably something that would be surprising is, uh, I speak a decent amount of Mandarin Chinese. Uh, ah, probably an uh, unusual one.

Speaker A: Yeah. Did that come as a, as a hobby or necessity?

Speaker B: It was, it was a hobby. And me kind of being very, very stubborn is why I still do it because it was actually at university studying electrical electronic engineering. Like China is really big at all that. So half of my classmates were Chinese and they would all talk to each other in Mandarin Chinese and I was like, God, I wish I could understand you guys. So about 15 years later, I'm still on my way to understanding that.

Speaker A: Yeah, I'm, I took four years of Spanish in, in high school, two years in college. I'm doing duolingo every day. My, my mother was a Spanish teacher, my stepdad was, uh, uh, was Cuban. And I, um, still am not. Uh, I'm okay, but I get myself into trouble whenever I go into Spanish speaking countries. Spent a lot of time in South America last year and um, couldn't navigate as well as I thought, but I couldn't. Apparently my pronunciation is really good. So I would say something and they assumed I knew more and then they would just fire off at Me, I would just be completely lost. Yeah. Are you studying it now? Do you do duolingo or how are you keeping up with your, your Mandarin studies?

Speaker B: Yeah, I can't. I kind of. Now I've, I've kind of stopped in the last six months, uh, studying it properly, mainly because my, My wife is German and she insists that I, I prioritize German instead of Chinese. So, um, I've, ah. It's also a lot easier, I must

Speaker A: say, if you play your cards right, you could be a true polyglot. You could just. With English, German and Mandarin, you could. They could drop you anywhere in the world and I bet you could figure it out.

Speaker B: Yeah, yeah. Figure something out. Yeah, yeah, yeah. So, Caroline, mostly, to be honest, for me it's like, uh, kind of trying to stay exposed. So having some like, reading materials, things like that, and just trying to keep it ticking over.

Speaker A: That's great. All right, now it's time for, uh, everybody's favorite question. What is your favorite Excel function and why?

Speaker B: Can I, can I go with. I'll give you two, if that's all right. I'll. I'll sit on the fence. So first I would say, actually simple one because it's used for, like, you can use it in so many different ways is sumifs. So it gives you a way of, of basically filtering within a formula, ah, through a large set of data. Very, very useful.

Speaker A: Yeah, sumifs is actually fairly popular among people. Uh, I ask. Yeah, sumifs is. It's an oldie but a goodie. It's a standby.

Speaker B: It's great. It is really great. And uh, the other one, actually probably a bit less common is the, ah, standard deviation formula stdev S because, like, I use it when I'm, uh, forecasting, especially when there's quite a lot of uncertainty. If I'm doing an M and A transaction, I've received accounts from, from the seller. What I want to do is work out how much does the, how much do the previous financials, how much can I use them as representative of the future. And you can use standard deviation to work out how much variability there is and therefore how predictable, uh, the future is going to be. So that's quite a powerful one that people don't use that much as far as I can see.

Speaker A: I went back to school for my second master's about a decade ago and took a lot of statistics courses. And when I was doing that, I just, I got up in my soapbox and I couldn't stop preaching about how much fp and a people needed to just lean into statistics. And again, I was, you know, that level of nerdy, uh, modeler. And that just gave me more ammunition to, uh, to argue for it. But I do. I love that as. As an approach to, uh, evaluate, um, forecasts. So, yeah, that's a good one. And that might be a first on the show. The show's been on for four or five years. I don't know if we've ever gotten standard deviation before. So, uh, yeah, I love that. So, Alex, it has been a pleasure to talk to you, and, um, really interesting learning about, uh, your business and your background. And I. I really appreciate you coming on the show.

Speaker B: Brilliant. Uh, yeah. Thank you very much for having me, Sam.