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James Leyton, student diaries, Accounting and Finance
James Leyton spent his placement as an Analyst in Corporate Finance at Menzies. Here he outlines some of the more interesting tasks and clients he encounteredAugust 2016: thrown in at the deep end
“My role at Menzies was based around research and analysing data from certain companies that have either engaged us or that we are pitching for work to. There was also some analysis of markets that these companies operate in and research on how they are performing in stock markets.
"I was surprised to find how deeply I was thrown into work. Although given time to develop skills and adapt to using research tools, I was already producing output for the director and even the partner on occasion within the first week of working there. I was also given the responsibility of finding potential targets to buy for one of our clients, a transport company. For this I had to research between nearly 200 companies to see whether I believed them to be a suitable acquisition for the business.
"To do this I used a target list of specific companies that may be approached to buy or sell a company, which is then used as a basis for those that will be contacted and ranked in most to least likely to fit the profile of an acquirer/disposer. Again, I have been amazed by the amount of freedom I have been given to make decisions and come to conclusions on these.
"Over the space of this two-month period I have learnt very quickly how to do basic research on companies specifically but also on markets. As much as a lot of the time was spent learning new systems and tools, I feel I gained a lot of knowledge of how M&A works and really started to settle into my role at Menzies.”
October and November 2016: putting theory into practice
During this two-month period James produced his first pitch document with the help of the team and some guidance on ideas from one of the directors. “When creating pitch documents for disposals, we try to show what we know about their company but also the market, the type of transaction, a valuation of the company and also the people that we think are likely to buy them. One of the main projects for the month was a coach company that was underperforming, resulting in the international parent company potentially looking to dispose of it.
"Working alongside an associate, we produced a document that was more detailed than I had previously produced. It was the first time that I had gone so deeply into the accounts and looked at what was underneath the company’s revenues and profits. It was the first time I’d felt like I understood the company in depth and was able to put the basic knowledge of accounts from university to work and improve them. During this period I feel I gained a lot of technical knowledge of the ins and outs of a company’s accounts and also how to interpret them, such as what that means for the company’s growth, or lack of it, as the case was with this particular company.”
December 2016 and January 2017: gaining international experience
By this time James had viewed or researched over 1,000 companies during his time at Menzies, and during this two-month period he continued to produce pitches and work on ongoing project, but also had his first insight into Capital Markets with a pitch for an Indian company looking to list an Indian rupee-denominated bond in the UK (known as a Masala Bond).
“This was a really exciting project for two reasons: firstly, I have never covered anything like it before at university or in my free time, but also because it had an element of international business involved too, with us making calls to India and elsewhere in Asia to gain knowledge and find out the appetite of such listings. I learnt a lot during this period about Masala bonds and in the end felt more than happy to have conversations with clients about them, something that I didn’t think I would have been able to do when I first started looking at them.
"This was a huge growth period due to the different conversations I was having and also due to the intensity of the work. I think this was the first project at Menzies where I had absolutely no clue about the market or the transaction type, and so not only was it a huge period of growth in extending my knowledge but also in how to research efficiently and effectively and how to communicate with clients and contacts. It also taught me to never be worried about speaking to people to gain knowledge; people don’t expect you to know everything and are more than happy to give you help most of the time.”
February and March 2017: noticeable improvements
“For the first time in my eight months at Menzies I had to produce a follow-on document for a company that we pitched for, a specialist geotechnical company considering disposing of their company.
"This was one of the hardest outputs I produced during the year, partly because it was a very niche business, which meant that, although very attractive, there were a lot of companies that I believe could have bought it. For this reason it was very hard to narrow this down to a manageable size for a pitch and there was also a lot of pressure due to it being an internal audit client and us having already pitched for it before. The final presentation we produced was in more depth and more slickly presented than I had seen from us so far. The extra depth came from the detail of the buyer profiles and the valuation, which went into depth about quoted companies’ PE ratios and other transactions deal data over previous years.
"At the end of this project I had a look back at the previous presentation I had done back in November looked like, and this was the first time I noticed how much I had improved. Everything about the document was different, from the presentation to the knowledge of the company, the depth of the buyers, the technical analysis of the value of the company and who was going to buy them.”
April and May 2017: AIMing high!
During this period James says that the hours calmed down, from routine 11- or 12-hour days at some stages, back to a normal 7 ½ hours. His main task was working on another fundraise for an Australian mining company that were unsure whether to list on the London AIM exchange or raise finance.
“This was the first time for a while that I had been entertaining clients and had been meeting face to face. This was again interesting for me, as I had produced an AIM fact file document three months previous that we were able to use and adapt for this client. It meant that I was comfortable inputting into discussions with the client and the directors here at Menzies. This did, however, have an international element to it and it was interesting looking into the different ethics and values that different countries have in business. As an example, this Australian company had a Gold mine in an Asian gold-rich country, and some employees would take days off so that they could go work on a freelance basis down at the next mine in the mountain for extra cash for the month.
"Reflecting on the progression I made I realise how much I improved over my time there. I developed my technical skills, and learnt about markets and businesses which I never knew existed. I also improved my presentation skills, both in how documents look and also how they are delivered to clients. One of the main things that I realised is that I also developed a lot socially and feel much more comfortable in a business environment with clients and being able to hold my own in complicated technical conversations.”
James is in the market for a bright future after months with Menzies.