‘We’ve gone back to our roots’
Pure was sold to Austrian investment company AVenture earlier this year. In his first interview since the deal went through, Pure’s chief executive, Paul Smith, tells Sean Hannam what it will mean for the future of the British radio brand
Q: Why did the previous owners of Pure, Imagination Technologies, choose to sell the brand to AVenture earlier this year?
Paul Smith: Ultimately, Imagination chose the deal that was the most favourable in terms of value for the shareholders – it was a commercial decision. Fortunately, from a Pure perspective, it was also great for us, as AVenture is fully aligned with our strategies and the direction of the company. It’s a win all round. AVenture is a family-run, Austrian investment company.
Q: Pure is still based at the HQ of its previous owner, Imagination, in Kings Langley, Hertfordshire, isn’t it?
PS: AVenture bought the building – they wanted a solid base in the UK and they didn’t want Pure to be disrupted. We have a transitional services agreement with Imagination, which means we are working alongside each other in some areas. Most of our business – 80 to 90 per cent – is self-sufficient. We’ve set up our own accounting, HR and legal department. All the engineering and warehousing has always been part of Pure – we already had a lot of the core functions. We also have long-serving employees – we have a significant heritage and just over 60 staff.
Q: Pure was sold to AVenture for only £2.6 million. I imagine this was considerably lower than Imagination was hoping to get for it?
PS: With Brexit, it wasn’t a good time to sell the business, but Imagination had committed to its shareholders. The headline numbers weren’t particularly pretty but, when you look at the details, you can see that, fundamentally, we have a very strong business with some fantastic designs, IP and trademarks. Our roadmap is extremely strong.
Q: So what’s next for Pure?
PS: We have two product areas – consumer and automotive [in-car radio]. The automotive side of the business is going exceptionally well. We’ve launched in the UK and Norway and we’re going to further strengthen our in-car Highway range next year. In terms of digital switchover, cars are still the trickiest area – even though 80 or 90 per cent of new cars have DAB fitted, there are still probably around 35 million vehicles in the UK alone that need upgrading.
It’s a massively tough area to design for – when we design our products, they need to work in any car. Quite a lot of the solutions in the market only work on 60 or 70 per cent of cars, which is a really confusing message for the consumer. We’re constantly learning and improving, we’ve developed a platform and the opportunities are fantastic.
On the consumer side, we’ve been focused on bedside and tabletop products and we have updated our portable radios. We’ve focused on AV – reliability and audio performance – and over the next 12 months, we’ll be doing a lot more radios with Bluetooth functionality. We’ll also be strengthening our bedside radios and then there’s connected radios.
Things have got tricky [in connected radios] – a lot of them [in the market] are running on quite low-performance processors and the connectivity is OK, but it’s not state-of-the-art. The new voice-control products will require quite a lot of high-performance processors to support the algorithms, so there’s going to be a step change in connectivity on radio devices.
We want to make sure that we come back into the connected audio space with really well thought-out, next-generation products.
Q: Pure and Imagination were at the forefront of connected radios, speakers and multi-room, weren’t they?
PS: Yes, but you’ve probably noticed that we haven’t done much in that space in the past couple of years – we’re waiting for the technology to catch up. There’s no point in us just bringing more products to market… We don’t have any intentions to go back into the speaker space at this point, but that may change in the future.
The ultimate dream for everybody is to have audio products dotted around the house that all do what they want them to do in different areas and they all work together seamlessly. That’s going to take some time, because there’s no clear, defined standard. Audio and voice control will be key.
Q: In the past, Pure moved away from its core radio products and diversified into multi-room speakers and digital TV recorders. Did that dilute the brand?
PS: Yes – we weren’t focusing. We were doing radio, but it wasn’t getting the attention, because it was competing with other areas. Strategically, we were doing jobs for Imagination and its partners. There’s currently a lot of talk about the use of voice control.
We’ve been working on that for several years, although not under the Pure brand, but with our engineers. A lot of the work we were doing distracted from our core radio business, but it’s given us an incredible amount of experience.
There’s not much in the market that would scare us technically – we can look at new areas and we’re looking forward to focusing on that in radio and audio. Ultimately, radio and audio and speakers will all merge into ubiquitous systems.
Q: Does it feel like Pure’s gone back to its roots?
PS: Yes – for the first time, since 2002 to 2005, we’re focusing on digital radio, with a simple aim to generate cash. We’re pretty confident from day one that we’re going to be trading profitably – that’s down to our focus.
Q: How’s business in general?
PS: We’ve been knee-deep in admin. The past three months have been intense, due to the sale process, but we’re now just focusing on the radio side of the business and that’s going exceptionally well.
Over the past 12 to 14 months, we’ve only had one or two months where we haven’t seen positive year-on-year sales and we’re strengthening our overseas markets – we’re doing a lot of business in the Nordics.
We’ve pulled out of the States, but in Benelux, France and Switzerland we’re strong and Germany is looking good. The UK is also in good shape.
Our focus is 100 per cent on radio – consumer and automotive – and we’ve been trying to be as positive as we can on the [UK] digital switch over programme.
The criteria will be met by the middle or the end of next year and then it’s a political decision – the Government just needs to get on with it. The landscape for radio is fantastic.