New deals for

NOT content with staging the first successful management buy-out (MBO) of a local authority catering operation in February, Westminster Meals Service (WMS) is on the eve of providing meals to the population at large to complement its core meals on wheels business.

It will not be a retail outlet competing with the sandwich bars that surround London's Marylebone station, but a home and office delivery service.

It has begun by targeting what managing director Brian Smith describes as four "affluent tower blocks" in the two areas - London's St John's Wood and Victoria - where meals will be on offer for as little as £2.99 each.

Typical meals supplied by German manufacturer Apetito include cordon bleu chicken escalope with carrots and potato purée and cheese-filled tortellini in carrot sauce. These and more than 20 choices will be available initially and can be reheated in the oven or microwave.

The minimum order will be three meals or five desserts and plans are being made for limited debit card acceptance as well as cash and cheque payment.

UNDERUSE

What makes such a move possible is the fact that the regeneration kitchens at the Marylebone premises are currently used only for a limited number of hours a day, namely in the run-up to lunchtime.

Smith describes the move as the first step in diversification - crucial if the company wants to stay in business should it lose its core £1.3m contract to provide Westminster City Council's elderly and infirm residents with a daily meals on wheels service.

As part of its contract with the council, WMS has to guarantee that all meals are delivered within the two-hour delivery window of 12 noon to 2pm.

The contract is not due to be reviewed until 1997 but there is no room for complacency: every new "client" received via fax from the council's care managers is a valued customer.

"Obviously the Westminster contract is our bread and butter," Smith says, "but it's clear - our honeymoon period is already coming to an end."

Smith has noticed his former employers are now paying much more attention to specifics in the contract between WMS and the council. In one case, the council has questioned an outstanding amount in photocopier rental fees. Smith has just discovered that he's paying as much as £1,500 for three months' use of a photocopier.

"While we were part of the local authority such costs were usually absorbed. Now it's different - there are a number of options and we sometimes have to play a game of brinkmanship," Smith says.

"In the case of the photocopier I might just ask the council to take it away and we'll buy our own."

OTHER PLANS

Plans do not stop with the new home and office delivery service. Smith and his partner Len Murrill are already contemplating the potential offered by the City and other areas of central London. They intend to aim for large concentrations of office workers where the idea of a range of à la carte ready meals could catch on.

The pursuit of new business opportunities has dominated the company's fledgling five months of life. Despite being involved in the finer details of MBO negotiations and getting the new business off the ground, WMS has now tendered to run the entire meals on wheels service in Wandsworth, London.

There are three separate contracts on offer in Wandsworth - the purchase, regeneration and distribution of meals on wheels - and, confidently, WMS has tendered for all three.

A decision is imminent and WMS faces eight competitors including the incumbent contractor, CCG. "If we get it," Smith says, "we will be operating in the two flagship Tory boroughs."

"This business is like a corner shop. You either run it down or you develop it, and we've decided development is a priority although we will not lose sight of our core business."

The tender process is not just a question of submitting a bid and some plans as Len Murrill explains. "We've identified new premises in Garratt Lane, Wandsworth, specified the equipment we need and already advertised for a manager to run the operation."

The detailed plans involved in submitting a tender can be expensive both in terms of management time and the hiring of consultants' expertise.

"Perhaps we were over-ambitious at first. We decided to go to night school to learn bookkeeping in order to do it all ourselves," Smith says.

This policy was soon reversed and they have now opted for a professional bookkeeper so valuable time can be focused on running the business. Other consultant friends and business associates have proved invaluable, especially an advisor on food safety and a consultant who helped them put their message across to cautious bank managers.

Murrill hands Smith a torn piece of notepaper with the address of a forthcoming Metropolitan Police second-hand supplies auction. They are both adamant on attending and will be looking for items of cutlery - and maybe a replacement photocopier. n