Chris Jessop Chris Jessop, the boyish boss of Sona, corporate health facility providers to all that is UK blue-chip, slots with a very neat virtual click into the swish Covent Garden offices of Kleinwort Capital, the private equity firm that has backed - to the tune of a cool £6 million - this, his new venture. Slim, square-jawed and stylish, he looks more the debonair venture capitalist than the rare combination of dedicated healthcare professional and hard-nosed, go-getting entrepreneur that is the reality. In October 2001, Jessop led a management buy in-'n'-out of Tweedpark, the country's largest provider of wellness facilities to corporate clients. Over some 20 years, Tweedpark had advised companies on the feasibility of putting gyms on site, worked with architects to design the facilities, and then managed them, on an outsourced basis, for a fee. "They are superb operators" says Jessop. "We wanted to add to the company rather than cut in, so we constructed the deal to enable the original founders to retain a stake in the business and roll over some of their equity into Sona." Lincolnshire-born Jessop initially took his business degree and marketing expertise to multi-nationals such as Rank Hovis McDougall and Sterling Healthcare and, in 1986, set up his own venture in corporate healthcare services. City Healthcare grew rapidly over the next 10 years and was sold into the Barbican Healthcare group. The high-flying and, by now, highly-regarded Jessop was appointed deputy chief executive of the group in 1996, and then, barely pausing for breath, floated the company, spearheaded 10 acquisitions in 3 years and sold the whole lot, lock, stock and several smoking cross-trainers, into the BUPA group. The company created a new division, BUPA Wellness, in early 1999, of which Jessop was appointed managing director, which soon became the UK's largest provider of health screening, occupational health and primary care services. "BUPA is a great company" Jessop says, "perhaps the finest healthcare brand in the UK. They succeeded in positioning themselves as a broad based well-being firm, not just as an insurer or provider of remedial care. They were very supportive of my strategy, which they invested in heavily." Jessop was joined in the MBI of Tweedpark by his BUPA finance director, KP Doyle, and used the existing strong management to fuel their mission to "be the finest provider of positive health services within Europe to corporate clients and selected commercial contracts". Unlike most purveyors of corporate twaddle-speak, Jessop carefully picks words out from the mission statement to justify their use. "The key words are 'finest', not biggest, because we want to be large, but well-formed and profitable. We say 'positive' because the market is changing and we will reposition ourselves and broaden our services into physiotherapy, nutrition, massage and pilates - with my healthcare background, I'm comfortable delivering that. And 'Europe', because there are member states that are culturally aligned to the UK that have growth potential for our services. 'Corporate clients' are our main strength and 'commercial contracts' means hotels, developing day spa products and blocks of upmarket flats with in-house gyms." The senior team - Doyle on finance and acquisition, Brian Davies, the founder of Tweedpark, as commercial director, Terry Young on HR, training and health and safety and operations director Andy Bruen - work with 7 regional managers and an operations manager to run each facility. Based in Chiswick, west London, Jessop says "we have just 15 people centrally - and may it never get much bigger!" Setting the right example to their clients meant the purchase of a commercial gym, in a former chapel opposite their office, "a cracking little place" says Jessop, for the use of their staff and some friendly locals. Sona services some 80 corporate contracts at present, around 30% of the market, including such giants as Clifford Chance, Glaxo SmithKline, Deutsche Bank, Sainsburys, Merrill Lynch and Cisco Systems. "Within the UK, there are 1,500 locations with more than 500 people on site. We believe that only around 15% have a gym, so there's enormous opportunity" Jessop says. Upgrading is also a growth area, particularly when HQs move - "Glaxo, instead of a little thing in the basement, now provides a massive demonstration of their contemporary approach to healthcare" cites Jessop as an example. And with the provision of health facilities proven to add value to the employee benefit package, reduce absenteeism and improve productivity and morale, organic growth seems a given, with Jessop aiming for 120-130 contracts in 4 to 5 years. Employers pay a fee for Sona's services, which is based on the size of facility, number of staff on site and opening hours, which take into account shift patterns for clients such as banks and manufacturing businesses. The facility is often cost-neutral, as companies will charge staff to use the facilities, usually around £15-£20 per month. "These are not crummy little gyms" Jessop disabuses me. "Some are as good as you get in the high street. Most are around 3,000 sq ft, with nice changing rooms, exercise studios and therapy rooms." At the top end of the scale, an international investment bank in Canary Wharf has dedicated 25,000 sq ft, an entire floor of their building, to creating a state-of-the-art staff health club to be operated by 17 Sona staff. Jessop is unconcerned by the proliferation of fitness facilities in the area, where two mainline commercial players, LA Fitness and Holmes Place, are already open and Reebok Sports is developing the largest, most exclusive - and possibly most expensive to join - health club in Europe. "There'll be, say, 6,000 members joining those clubs" says Jessop, "but within the next 5 years there'll be 90,000 people in Canary Wharf! Employees would typically spend £40 a month at LA Fitness or £70 at Holmes Place, yet the facilities in house, for £20 a month, are usually not a million miles away from the high street and better in some cases." Last year Tweedpark turned over £7½ million, this year will yield, says Jessop, "considerably more, and I'm looking, over the next 5 or 6 years, to double or treble that. We'll grow organically and by acquisition and are actively looking to acquire businesses in core areas, as well as aligned services that we can bolt on." The company recently bought a physiotherapy business, Physiofit, which provides on-site services for employees. "Most gyms have therapy rooms, so it's a good fit" Jessop says. Competition consists mainly of David Brame's Bladerunner, which claims the largest slice of the UK corporate cake, and operators such as Livingwell in hotel clubs and DC Leisure for local authority centre management. "We're now starting to move into complementary therapies and occupational health provision, so we will have more competitors in those fields" says Jessop. "I have ambitions to get into the hotel fitness market in a measured way - I find it fascinating, but I'm cautious in that sector." Similarly, Jessop is exercising prudence on moves abroad, saying "We'll take it slowly. We've identified countries which could be appropriate, where there's reasonable penetration of use of fitness facilities, where the economic future is likely to be rosier and where we can get clusters of accounts in one catchment area to maximise operational synergies." Frankfurt, Paris, Madrid and Brussels are mentioned as target cities, to complement Sona's operation for Cisco Systems in Amsterdam, for which they pitched against a local provider. "European offices of existing UK clients are the low-hanging fruit for us" says Jessop. Staffing levels at Sona are currently running at 450, full and part time. "We offer a great career path" says Jessop. "Our staff are not like salespeople in a health club, managing customer churn - their sole role is to enhance the clients' health and well-being." He stresses the company's dedication to training and career development and the contribution made in this area by Terry Young. "His role is not very sexy, but it's fundamental. The average staff churn in the industry is 40% - ours is far less, because of his hard work and skills." The fitness market is relatively new to Jessop, but it hasn't taken him long to acquire a view. "When markets start to mature, people become more discerning, there's segmentation, consolidation and the true professionals start to take over. The industry will have to diversify laterally and pay attention to service and design levels. You have to take your hat off to Fitness First and LA Fitness - there's no messing about, they have clear niches with a solid value-for-money proposition. They wouldn't admit it, but what they are doing is just renting equipment cost-effectively. I do worry about the mid-market players, though, as they might become like Marks and Spencer a few years ago - in no mans land, with Matalan at one end and designer brands at the other." "That's an interesting question, to which I don't really know the answer" is the surprise response from this man-with-all-the-answers when I ask whether a product for smaller companies is feasible. "There are opportunities to open facilities which smaller companies can share, where the gym is paid for by the building's managing agents, who get it back through service charges. And it could also be done on business parks, or in combination offices with one floor a gym." With overseas operators fast diversifying into remedial medicine, has Jessop any similar aspirations? "It's interesting to see how far you can broaden the offer in the corporate market" he says. "I'm open minded, but it's important to identify things that people actually need, without being overly clever. Physiotherapy and massage are good, because they can get people back to work quicker. But you can only take people so far down a clinical pathway before it gets uncomfortable. Putting in actual doctors never worked, because it's too serious - people use health facilities for fun, a bit of indulgence, maybe even hedonism - culturally, can you mix that with serious medicine? I'm not yet sure." "This might sound awfully crass, Ian" Jessop says, leaning forward, "but we actually have a passion for the business. We may be business people and shareholders, and we may be looking for terminal value, but we genuinely like and enjoy it and want to build and create something different and innovative. That's our driver. Of course we want to make it profitable and attractive, either for a flotation or potential trade purchaser, but that's a while down the track." Chris Jessop's passion rings true and Sona, it is clear, does exactly what it says on the can, does it impeccably and manages to impresses along the way, no mean feat in a corner of the industry that may be deemed dry. If corporate wellness can be applied to companies as well as individuals, the prognosis for Sona, it would appear, is A1. Favourite things What gets Chris Jessop up and running? Film - "Any historical drama" TV show - "Sport, particularly football, and particularly Wolverhampton Wanderers" Restaurant - Club Gascon in Smithfield, London Overseas city - Paris Hobby - Running, amateur football and fitness Book - "Anything by John Le Carré"