Peter FitzGerald, 73, is the founder and owner of Randox, a health diagnostics firm based in Northern Ireland that sponsors the Grand National. Between 2020 and 2022 it processed 25 million Covid tests under government contracts, often issued without a competitive tender. Over the period it increased its staff from 1,400 to 3,400 and made pre-tax profits of £465 million as its revenues soared. Since then it has had to restructure, posting a £40 million loss for last year. It now employs 2,100 people and this year may still make a loss despite its improved trading performance. FitzGerald describes how the company has pivoted.
We went from a healthy profit to a loss and people might wonder why
The reason is we invested very heavily before Covid in developing our core technology of biochips, which is putting mini tests on to a microchip. When Covid happened, we were able to be of service because we had the core technology and tests for viruses like Covid, just not that particular strain.
We then used the opportunity to get government contracts and in private testing for travel. We moved fast and invested in building new laboratories. We had to buy new equipment and develop equipment ourselves.
To be blunt, before Covid we were wondering if we were too fat as an organisation. We had been very research and development-focused, with different types of scientists and engineers. Covid happened and we had the disciplines in place so we were able to utilise them.
With the money we made from Covid we decided to expand our health clinics
As Covid tailed off, we had already started private clinics as we had new tests that we knew could detect certain diseases earlier, but we could not get clinicians or the NHS to take up the tests. So we opened our own clinics, first of all in Northern Ireland and then in London [it now has 23].
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The idea was we had to sell directly to the public because we couldn’t get adoption for things that in clinical trials had been shown to result in improved life expectancy. We found the public were more understanding now about what blood tests were about and people were understanding the immune system better.
But we made a loss because our R&D expenditure increased as we brought products closer to market
And we kept a high level of staff in research and development, perhaps 400 to 500 more people than we actually needed. We were taking a bet on the future.
The clinics were all still technically lossmaking [last year], although that [period] is just about to finish. We had to take on staff to collect the blood from people, had initially low volumes of people coming in and marketing expenses. It has taken time to build up.
Scaling back again, we had to take the whole organisation with us
We were very happy with how our staff responded [during Covid], they did so brilliantly. Now we are going through a similar exercise, communicating clearly about our future. We do that because people build up fears very quickly. If they go from being very busy to busy but in a different way, you have to counter the fears that something has gone wrong. You have to make sure morale in the company is good and that people know there is a strong future.
Morale here is getting good now. In the past six to nine months, it was a wee bit lower than normal, because we were in this transition period.
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We didn’t need people to process samples so much and so we had some roles in clinics we could not justify any more as we didn’t have tens of thousands of samples coming in. There were also a number of logistical roles and manufacturing staff, as well. People who we felt we could convert into full-time research and development scientists we kept.
You have to make sure you don’t lose good people. Whenever you have change, I worry about losing good people.
One thing we noticed is that parts of the business ossified a bit coming out of Covid. If you are not careful you can get complacency in an organisation very quickly and we have had to make sure we kept sharp.
Silos also build up in organisations very fast. You have to make sure they don’t. People don’t mean to do wrong, but sometimes when you are siloed, communication reduces. So we are in the process of making sure we can break down all the silos in the company.
What would I have done differently?
I am not very good at looking back. It might demoralise me. But if there was one thing I perhaps could have done quicker was to address those silos.
Now we are coming out of the transition period
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We can see a very clear future. A lot of the products we have been working on are now coming out to the market and that improves morale greatly.
I am not sure what our accounts for this year will say [in the financial year to June]. They will not be saying any massive profit, but we are trading in the black as we speak. I wouldn’t be surprised if we report a small loss or a small profit. But it is an inflection period.
And what about the sponsorship of the Grand National?
We have two more years of the Grand National and I suspect we will be talking to the Jockey Club at some stage in the near future. We did it to get the name out there because no one knew who we were and what we do.
Peter FitzGerald was talking to Richard Tyler, editor of the Times Enterprise Network
