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David Murray-Hundley is keen to acknowledge that changes in the way we work have worked in Mycardirect's favour. He says: "I'm relatively new to the business, I got involved as a shareholder back in January, and became chairman in March. However, I had shareholdings in other subscription businesses, and still do, and I would agree, there was a period of time from 2014 onwards, where a lot of these other subscription companies were raising capital. I'll be honest with you, I had a moment of going "really, why would someone do that - right?"
"However, I'm not the customer. So, I think lockdown did absolutely help us, I think there's been a feeling with consumers and businesses of uncertainty around the economy, if you look at the recent numbers, the UK didn't grow as much as it should have done in July, there is an uncertainty around how the US will affect us and the rest of the world.
"There are almost two levels of people interested in subscription. People who don't want car ownership at all, as it is literally just a commodity that they will lease - or subscribe to. There are other people who are looking at assets, and going "hang on a second, that's cash locked away as capital, and we're going to have to pull things in a little bit." I think these scenarios are helping the subscription space.
"The whole lack of vehicles caused by semiconductors, I'm not so sure. It's been an issue, we look at some of the customers we have, we've got orders for vehicles, yet we managed to get vehicles before they could, and they're having vehicles from us for up to a 12-month period - because it's taking cars such as Range Rovers two years to turn up.
"I think there's a lot of interesting things adding to it at the moment and I still think subscription is in its infancy as a marketplace.
"Many OEMs have introduced their own subscription services, but Murray-Hundley thinks this is an opportunity more than a worry: "From an acquisition point of view and exit - it's an opportunity. However, despite having massive respect for the OEMs, I have watched them with other businesses in subscription and other areas of automotive -and they've struggled to understand the early-stage business mentality a little bit.
"You see it with various accelerators, or funds that have existed since 2013. In the U.S, I've seen more of the OEMs trying to push over there, a little bit. I guess it's a land grab. You can do a big deal in the U.S and have a relatively short space in a local area.
"I think the area for subscription is so early, it's vast! I guess the challenge is when the OEMs decide to make it slightly harder to get hold of vehicles - or own the market, but that happens in all supply chain stuff, and we need to learn to deal with that.
"For us as a group, and for Mycardirect - we've done so well. We're the one platform that's making money and profit, I know, I've seen the coverage on other businesses and they're not.
"There is also a numbers grab going on, which you always find at an early stage - because they've got investors like me going, "well we want five times return on our investment, and we need you to go for it."
"We've taken a slightly different approach because that's the type of business we are. Duncan's done a great job. If I had more funds, he could spend them, but we've taken the tortoise approach if you like, and it has paid off."
Murray-Hundley thinks it's the sales that differentiate Mycardirect from its rivals "Everyone's built the tech, but no one has got the sales! We've got the sales, but we have gaps in this business on the digitalisation side.
"I think, one of the things that's been interesting - for me as well, my world is start-up, early-stage money, you go and IPO (initial public offering) a business, everyone gets excited, no one really makes any money - except the shareholders.
"We're very aware of where our gaps are, we're very aware of where our strengths are. As an investor, that's appealing for me because they are the best businesses to deal with, because you kind of take a view on it - that it will do something.
"There's a good, strong foundation here and that's the thing for me, I think. Mycardirect have done really well, and don't get me wrong its not been plain sailing for the group, or the team. We work Duncan hard, but we have a great foundation and I'm really proud of him and his team for doing that.
"When I talk to competitors and look at how much money they've raised and they're burning that, I'm like, wow. Gosh, you should come and have a look at our model, because we're doing this. We've just closed Mycardirect's financial year, and we did £7m in car subscription. If you take Drover when they got taken over, I think they were at £11m, with a massive loss and Duncan's made a profit since January, so we're working hard.
Murray-Hundley believes weathering the storm is the best way to deal with the cost-of-living crisis. "So, it's all about job protection, protecting the business and the shareholders. Plus, continuing to make a profit. At the same time, I want us to grow - but I'm cautious about that. We're still looking at the US, but because the dollar is so appalling, it makes it 50% more expensive than it was going to be.
"I'll be honest, we're not interested in Europe, I think the business has tried a bit before, it's a really tough gig and I think the U.S is easier. I went through the dot-com boom and watched businesses with massive valuations, it's always an opportunity, but also a lot of businesses fall by the side.
"One of the things I think is going to happen in the subscription space, is there are companies raising money from interesting sources - more from the consumer side. Are they good deals? I'm not sure, but I think there's also a lot of businesses in the space that are going to run out of money and find it very hard to survive. I feel for that, but this has been coming. Where we are economically has been expected for ages. We're in a good position, the board and the company have done an immense job considering, I look at 2020 and think wow, gosh that was tough for you guys. It was one of our worst years, and we had a year before that wasn't particularly great, they've done brilliantly.
"I think there's an opportunity to make Mycardirect and our other businesses stronger. There are a lot of corporate rental businesses that are on the market now, and I think that's an interesting signal. There's a couple of reasons why, a lot of those firms are 20 or 30 years old and have people retiring who own them. I also think they've had a pretty challenging few years and people get to a point where they say, "enough is enough - I want out." So, there's opportunity - it's a buyer's market, now.
"One of the things I want to do with the group, when we talk about change, is digitalise us a lot more than we are right now. Not just on the back end, but also for our customers, because I think we need to offer more value as subscription matures a bit. The differentiator won't just be the price, I think it will be reading into the terms and conditions about what deal you're actually getting. Duncan's done a lot of work on the subscriptions part, which is really important - as I can see that changing quite rapidly in the next two years.
"If recession hits, consumer needs will change, and we need to adapt. One of the things I worry about the subscription space, is the assumption that it stays exactly the same for the next two to three years. I think margins will get harder; we've already started to see that. But I honestly think people will want more bang for their buck, and I don't blame them. I'm not looking forward to the recession, but I'm excited to work with Mycardirect - with the thought that we'll look back in five years and say "wow, how did that happen?"
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