SBC spoke to MRG Systems, a company renowned for cutting edge display technology predominantly in the betting shop environment, to discuss what the firm’s plans were in the face of industry consolidation.
SBC: MRG Systems were up for sale last year, but nothing seemed to progress. What happened? Are you still up for sale?
MRG: The short answer is that we are no longer up for sale. The longer answer is that Panther Securities, our major shareholder, is a publicly listed company whose major activity is as a property company. Their shareholding in MRG dates back to the start of the company when they provided the founders, Michael and Linda Grimwood, with the funds to speed MRG’s growth. As the business grew, the loan was converted into equity worth 37.5% of the total shares. When the founders retired in 2006, MRG bought back their shares, giving Panther 75% of the then issued shares.
MRG always was an exception within Panther’s portfolio of properties and so, after eight years, they decided to market their holding. It’s probably true to say that they didn’t realise how much of a niche market the company was in and, therefore, the limited number of companies who would show genuine interest. It’s probably also true to say that we suffered as the bookmakers were looking at their own merger and acquisition opportunities, which have only crystalised this year.
SBC: So you have a fresh mandate from Panther going onwards then? What changes have you made to reflect this?
MRG: We have always had great support from Panther and we could not have made the progress with the Irish Independents without their substantial soft funding. We have created a new management team structure in order to bring a greater focus on the particular areas of sales, support, future hardware technologies and software development. This will allow us to expand into other, allied, areas. Improved marketing in the form of a new website and greater use of social media platforms will raise the awareness of the MRG brand across the board.
SBC: Do you also have plans for the product portfolio? What are your most popular products at the moment?
MRG: In the past we designed and built our own specialised display equipment, whether for financial institutions, broadcasters, bookmakers or users of digital signage. As we all know, technology moves at an incredible pace and much of what we used to produce can now be replicated and bettered by standard PC equipment and graphics cards. So, we’re taking advantage of those advances to enhance what our software can do.
We will always produce niche products, such as our top end 26” DailyForm touchscreen form guide, but alongside those, we will offer an alternative, using a combination of off-the-shelf units, that will be appropriate for many of our clients. Our zoned amplifier has also been a big seller for several years. However, it’s the licensing of our software that continues to grow, whether it’s our legacy BIDS4 being used by Paddy Power and Coral, or BIDS5 in New Zealand and with the Irish Independents.
SBC: You have a considerable history with the betting industry. How important is the sector to the business? What other areas do you work in?
MRG: Yes, our history with major bookmakers stretches back nearly 30 years, when we developed our first system for William Hill. It is still very important to us, providing us with the vast majority of our income. For the last fifteen years we have also been developing and supplying digital signage systems into the Education and Health markets, as well as major organisations like the Houses of Parliament and its related Portcullis House, the Greater London Authority and the City of London Corporation. Whichever sector we go into, we attract and secure blue-chip organisations.
SBC: MRG has several international clients – the New Zealand Racing Board being one of the most high profile – are there plans to grow this aspect of the business?
MRG: We know that there are some great opportunities out there, particularly as regulations in relation to gambling are being reformed throughout the world but it’s a question of using our resources to make the most impact. We are developing new solutions to address the global growth in sports betting and those markets where gambling is not carried out in a traditional betting shop.
The new developments will be written in such a way as to be able to deal with the multitude of feeds required by a modern betting establishment or a single message feed with equal ease. They will complement and, in time, may replace what we offer to bookmakers as the changes in hardware technologies allow. They will also be applicable to other forms of data and message displays, thereby allowing us to diversify at an appropriate pace, without reducing our commitment to our core market.
SBC: What challenges does the industry consolidation provide for MRG?
MRG: Yes, these are interesting times for us with our two largest clients being involved in takeover or merger talks. Any of the possibilities could make a huge difference to us and it is in our hands to ensure that we give these clients the best value for money products and support that we can.
We recognise that their business needs to be our business and that we need to do our utmost to give them complete control over their screen systems and any other peripherals that we supply. To do this, we will continue to develop our screen management system to make it as flexible and automatic as possible. In addition, we will explore other solutions based on the most up-to-date software techniques in conjunction with the latest hardware technologies.
What a great opportunity this is for MRG Systems – we look forward to the challenge!