To the Manor bound: Our profile of Stephen Fitzpatrick
The Belfast man's Bristol energy firm now has 450,000 customers and 800 staff. Tomorrow, Stephen Fitzpatrick hopes to extend his winning streak to the Australian F1 Grand Prix
After setting up challenger energy firm OVO, Northern Ireland entrepreneur Stephen Fitzpatrick is looking to challenge the racing legends of Williams and Ferrari in the world of Formula One. The long-time fan of the sport made the move from the grandstand to the pit lane after his investment in the ailing Marussia team earlier this month. The new owner has put in £30m of his own money in the team, which has returned to its former name of Manor.
Fitzpatrick (37) is working with Justin King, who was boss of Sainsbury's for a decade until last July and is now the team's interim chairman, to help revive it as it heads into the first race of the season tomorrow in Melbourne.
However, Fitzpatrick will not be Down Under to see his project take shape at the season opener, as his wife, Sophy, gave birth to their third child this week.
Born in Belfast, Fitzpatrick attended Our Lady and St Patrick's College before studying business and finance at Edinburgh University in 1995. After finishing his MA, he launched The Rental Guide Ltd, a property newspaper, for which was nominated for the Livewire Young Entrepreneur of the Year awards.
This led on to jobs in the City of London with financial institutions Societe Generale and JP Morgan. As the financial crisis started, he left to set up the Bristol-based OVO in 2009. Last year he won the Entrepreneur of the Year category at the National Business Awards.
The energy market is one that is frequently branded as an industry that places too much emphasis on its profits and as not acting in the interests of the consumer.
Terms like 'predatory' and 'unfair' are sometimes used to describe the dominance of the Big Six energy companies in the UK. In the past, firms have been slammed for failing to pass on savings when wholesale prices fall, and for punishing loyal customers with higher bills for not switching to the latest tariff.
To challenge the supremacy of the dominant gas and electricity companies, Fitzpatrick, along with Sophy, set up OVO to offer the consumer a different option. The firm was founded on the principles of "simplicity, transparency, honesty and fairness".
With OVO, he set out to increase competition in the market, which he feels is essential for prices to fall. He has argued, with more independent energy firms on the market, it will force his larger rivals to be more efficient to make sure customers stay with them.
At the minute, a major issue with the industry is lack of switching among consumers, with firms punishing with higher bills those who are not savvy enough to move supplier when their current deal runs out.
Dan Plant, editor-in-chief at Moneysupermarket, said OVO has led a resurgence of the smaller providers in the energy market, which has increased competition. "We have seen a big shift in customers going from the big six to the smaller providers. OVO and other smaller providers have increased competition in the market," Plant explains.
Earlier this year, Fitzpatrick sought to show customers that his firm was different from other providers, by implementing a double-digit decrease in bills. "During the last round [of] price decreases in January, while the big firms dropped gas bills by 2%-5%, OVO took 10% off."
With its focus on customer service and price, the firm has been able to prise customers away from the larger energy firms, Plant says.
"OVO are part of a big shift from the big six suppliers to the 'Small Six'. So what people like about them is, (a) they are cheap and (b) they have a positive image, compared to the bigger providers. OVO is really focused on customer service, and we find they consistently come top of the customer satisfaction tables. They are trying to improve the customer experience, with an app and website which is really easy to use."
Fitzpatrick hit the headlines in the autumn of 2013, when he criticised his bigger rivals in front of the House of Commons energy and climate change select committee for increasing prices for consumers when the price on wholesale commodity markets was falling. By taking on the status quo in the industry he won many fans.
His appearance made people aware there was an alternative to the larger firms. OVO is now the 10th fastest-growing business in the UK, with 450,000 customers, and employs 800 people in its Bristol and London offices.
Fitzpatrick hopes to transfer his experience of taking on the big energy companies to revive Manor. There has been a lot of work to do to turn around the team, which almost collapsed in 2014. Last year was a troublesome season for Marussia, which missed the final three races of the season and saw the horrific crash of its driver, Jules Bianchi.
Fitzpatrick said at the end of last year that being on the starting grid at Melbourne's Albert Park circuit appeared unlikely - now the team must ensure survival.
"It's a great piece of British engineering - to make something that seemed impossible, possible. Right now, the story is one of survival and understanding exactly what we need to do to stay alive, but we're going to enjoy being back on the grid."
In spite of all the excitement of the new venture, he is staying level-headed. The team has travelled a long way since last season and, while the car may be slower at the beginning of the season, the aim is to stick to the long-term plan. "We hope, in five years' time, when we look back and see the progress we have made, the fact we're running a slower car in the first few races of this season will be a distant memory," Fitzpatrick explains.
"Everything's going to be fine, so long as we carry on growing from where we are, because having a slow car at the start of the season is nowhere near as bad as having a slow one at the end of it."
Manor has been on an erratic journey during its time in Formula One, with many different owners looking to apply short term solutions to long-term problems.
Mark Gallagher, Formula One expert and author of Business of Winning, about the sport, believes Fitzpatrick is the right person to take the team.
"Manor have been under three completely different business structures since they started in 2010. First, they were called Virgin Racing, then refinanced by Lloyds Development Corporation, and later sold to Russian car manufacturer Marussia," he says.
"I brought Marussia to the table when I was running Cosworth but, unfortunately, Marussia neither had the skill nor plan of how to make the team work.
"In each case, there wasn't a viable, long-term business plan. I think Stephen Fitzpatrick and Justin King will make a good job of it, with the right people and the right plan."
Gallagher, who has worked in the sport for Jordan, Jaguar and Red Bull, said Fitzpatrick's business experience will help steer the team in the right direction. "There is no question that investing in F1 is exciting, as long as you remember that it is a business like any other. I think Stephen is an ideal candidate to invest in Manor as he has run a successful business and brings a huge amount of management experience.
"Manor can certainly do with his investment to get out of administration but, more important than just money is having strong effective leadership and direction.
"Between himself and Justin King, they can guide the team's affairs much better than has been the case in the past."
A life so far
Born: Belfast, 1977
Status: Married to Sophy; the couple have three children
Education: Our Lady and St Patrick's College, Knock; Edinburgh University
Career: Launched property newspaper The Rental Guide Ltd; started Bristol-based energy company OVO in 2009; relaunched Manor F1 racing team for the 2015 season
They say: "Stephen is an ideal candidate to invest in Manor, as he has run a successful business and brings a huge amount of management experience." (Mark Gallagher, F1 expert and author)