Redeem, a pioneer of mobile recycling, is seeing turnover approach £20 million. The company’s new owners, Curt Hopkins and Pete Petrondas, talk to Michael House about its recent fortunes, its projects and their plans for expansion
Mobile recycling has exploded in recent years. More so than ever before networks, dealers and high street stores and supermarkets not focused on mobile are all looking to cash in unwanted devices.
The mobile recycling market in the UK has matured at speed, with a long list of companies fighting for the country’s estimated 80 million unused mobile handsets, of which hundreds of thousands are now recycled each year.
One of the pioneers of mobile recycling is Falkirk-based Redeem. The company, which began trading more than 12 years ago, currently has six brands and works with some of the UK’s biggest high-street names including O2, Boots, Sainsbury’s and Tesco, as well as online retailers Amazon and Ticketmaster for whom it provides a white-label service.
It also has an enviable list of more than 300 charities, including Comic Relief, Barnardo’s, the British Red Cross, Macmillan Cancer Support and Oxfam, on its books.
Redeem has claimed in the past that it receives an average of 200,000 envelopes containing devices each month.
The company was set up as a business recycling predominantly empty ink cartridges, which were collected from businesses around the UK and sold onto companies such as Tesco and Office Depot.
The model evolved into mobile handsets and other electrical equipment, such as MP3 players and consoles, that are purchased for parts or refurbished and resold.
As with the majority of phone recyclers, the bulk of Redeem’s business is done in Hong Kong.
The company has said previously that it sells more than 200,000 working handsets every week through online auction sites.
Redeem will only do business with companies that have passed its own ethical trading policy, which includes several criteria ranging from the number of people employed by the company, rates of pay and working conditions.
Takeover and new top team
Since our last update on Redeem two years ago, the company has undergone a number of changes, including ownership.
In February, the firm’s founders Jamie Rae and David McCabe sold the business for an undisclosed fee to Curt Hopkins (pictured left) and Pete Petrondas (pictured right), backed by investor Trevor Bayley – a founding partner of HgCapital.
Hopkins is CEO of the business, with Petrondas now COO. Following the buyout, the new owners stated their aim was to create Europe’s leading value recycler. Redeem already has strong and established operations in Norway and Denmark – markets that they claim are not as mature as that in the UK.
A bold statement. But neither Hopkins nor Petrondas are strangers to the industry and are confident they can continue to grow the business, which posted turnover close to £20 million in its last financial year ending March 31 – its biggest to date.
Both men have built solid CVs over the past decade. Petrondas was the brains behind another recycling giant, Envirofone (Eazyfone), formed in 2001. He oversaw the development of one of the leading Business to Consumer (B2C) websites in Europe during his watch.
And, in 2003, Petrondas recognised the opportunity of working with charities and other sectors, such as health and education, to encourage mobile recycling in order to help fund new equipment, a strategy heavily adopted by Redeem.
Hopkins has been involved at senior level with a number of telecom companies including Nortel Networks, Fujitsu and, most recently, Vodafone where he spearheaded the operator’s drive into unified communications and B2B services. He was also heavily involved in Vodafone’s 2009 acquisition of Central Telecom, now known as Vodafone Central.
“We saw Redeem as a great platform for building up a European-wide business in the recycling space,” says Hopkins. “The company is about making corporate social responsibility easy for its major partners, the biggest of which are the major operators.
“On top of that Redeem is not just a business focused on the B2C side of things, it’s very much got an emphasis on the white-label products it provides and B2B recycling solutions as well.”
Petrondas adds: “We have a very fast-paced, fast-changing industry – it’s a very volatile market, one that goes through constant periods of peaks and troughs and experience really helps.
“We have got a very, very strong pipeline at the moment – expect to see many more customer announcements. For example, we are talking about one of the UK’s largest online retailers, as well as some major EU operators, that will be added to the mix.”
The two men claim it was their experience that helped Redeem navigate the difficult economic conditions in 2011 relatively unscathed, something the company claims its rival Envirofone struggled to do, requiring a £1million bailout to survive, Redeem says.
The company saw its 2011 profits rise by 207 per cent at the end of March – from a £579,000 loss to a £619,710 profit.
Petrondas says: “The markets suffered a depression in terms of the value of the products we sell and receive. It’s a good example of where our experience acted as an advantage because we traded through comfortably during that time.”
Hopkins adds: “Let’s be very specific, because it’s public knowledge that Envirofone had tremendous problems during this same time. If you look at Companies House documents, their shareholders had to put in well over £1million to keep the company afloat.”
Full article in Mobile News issue 506 (January 30, 2012).
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