Ever since the company started, translation business Straker has been challenging notions of the way technology can be used to facilitate language services.
“We’ve been global from day one. We had clients in the US and UK, Australia and New Zealand and over time, they have gone from being transactional to enterprise-grade, long-term, repeat clients, which is where we want the business to be,” says chief operating officer Merryn Straker.
Grant Straker, Chief Executive Officer and Merryn Straker, Chief Operating Officer at Straker
Merryn runs Straker with her husband Grant. “We manage very different parts of the business and we were always really focused on growing a big New Zealand company from New Zealand. We emphasise export markets because only 10 per cent of our business comes from the domestic side.”
Straker has pursued a comprehensive acquisition strategy since before its IPO, completing a number of deals before it hit the share market to demonstrate to investors it could execute successful transactions. While Grant still holds his directorship, Merryn resigned from the board when the company listed as part of a corporate governance refresh.
“We bought an Irish business in 2016 and a US company in 2017. Acquiring a company can be quite confronting because people don't like change and they are used to the tools they have. So that’s always a little bit of a process. So these transactions allowed us to test how we bring clients across to our platform from other tools and systems.”
Straker has bought nine companies in total, and Merryn says they are always on the lookout for companies to acquire. “It’s one of the best ways for us to ‘land and expand’. Our IBM contract came out of one of the Spanish acquisitions we did in 2018. The business looked after Spanish and Catalan translations for IBM and from there, we've grown to be the main provider of translation services to IBM for more than 55 languages.”
She says the business uses three variables to assess whether an acquisition makes sense for a company: price, customers and opportunity. “All deals are different. So, it is a case of us working out whether one is attractive or not.”
Merryn says the emphasis now is on being a cash flow positive company with steady growth, which is a maturation from the very rapid growth of the recent past.
“These are uncertain times, our focus now is being in control of our destiny by generating cash and investing in growth. We’re in a really good position as we have always concentrated on running a high margin business with industry-leading productivity metrics.”
Innovation is at the top of Straker’s list of strategic priorities, and the business has recently released apps for messaging sharing technology Slack. “Instead of coming into our customer portal, customers can order our services online through Slack and also check the status of their jobs. We're working on that with Teams as well. We have a belief our customers are diverting to digital HQ platform. It’s been an interesting journey from a software development point of view.”
Straker’s investor relations program is Grant’s domain and he explains the stock is tightly held. The business has around 1,200 shareholders, including a small number of institutions. He says a focus is to add some more institutions to the shareholder base.
“We're looking at ways to address this. Long term shareholders and staff make up around 50 per cent of the register. We believe this is actually a very good signal to the market on the long term value we are creating for shareholders.”
While the business has delivered on its growth promises to the market, Grant says the share price hasn't moved in the direction he may have liked. “It’s a bit of a Catch-22 because we’re delivering on the operational side of the business and no-one wants to sell their shares.” The team is exploring ways to address this at the moment.
As for the future, the Straker team will continue to embed its acquisitions and look for others, develop its technology and expand its business model. It’s a fantastic good news story that is likely to continue to deliver value to shareholders over time.