`I'm not part of cafe society'

Profile: Nigel Rudd; Richard Halstead talks to the Williams chief who has fun making money - for other companies

Sir Nigel Rudd has a confession to make. All that carping by analysts about the man who advocates shareholder value so strongly and yet cannot deliver it at Williams, "is completely fair comment," he says. "It's something I am very conscious of and we're trying to do something about it."

He built the company from near bankruptcy after the 1981 recession into a powerful manufacturer. Its Yale locks, Rawlplugs, Polyfilla and fire extinguishers turned over an impressive pounds 1.6bn and made pounds 219m profit last year, a long way from its pounds 5.6m turnover and pounds 171,000 loss in 1982. But the share price, now 339p, is only 10p above the 1994 rights issue price. Where's the value?

What irks the analysts even more is that Sir Nigel has proven very effective at creating shareholder value elsewhere. Last week, as chairman of East Midlands Electric, he agreed a 670p a share offer for the company from Dominion Resources, a 25 per cent premium to the share price two months ago. Dominion chairman and chief executive Thomas Capps said he was particularly attracted to East Midlands' strong management

team, industrial focus and reduced cost base - all Rudd legacies. Barring intervention by the regulator, East Midlands shareholders will have a reasonable profit. But when, the City asks, is Sir Nigel going to bless his own company with such financial benefit?

Conventional wisdom has it that there have been three ages of Nigel Rudd. In his first age young Nigel, a grammar school boy from Derby who qualified as an accountant at the tender age of 20, was set to work as a troubleshooter for London & Northern, a holding company for a range of businesses owned by Seventies empire-builder Jock McKenzie. He was a bit of a whiz with figures - an inheritance, he says, from his father, a civil servant who worked as a Weights and Measures inspector.

In his second age, Nigel becomes an entrepreneur, first buying a small housebuilding company off his mentor McKenzie for pounds 10,000 in 1977, and making a pounds 600,000 fortune from property deals by the time he was 36. Instead of opting for the easy life, he and partner Brian McGowan bought Williams, a tired loss-making engineering business about to be sucked under by the recession. From there the pair built one of the "mini-Hansons" of the Eighties, snapping up under- performing industrial companies, turning them around and using liberal accounting practices and an-ever rising share price to do more deals.

The third age began when Williams' last big hostile bid - for Racal in 1991 - failed. It was also about the time that acquisitive conglomerates, the darlings of the Eighties, were heading quickly out of fashion. "We had to reinvent ourselves," recalls Sir Nigel.

Since the acrimonious battle with Racal's Sir Ernest Harrison ended, Williams has changed a lot. It has sold off the electronics and engineering elements of its broad portfolio of businesses, and rebuilt itself around its security and fire protection businesses. However some of the old Williams legacy remains: a diverse home improvements business, including luxury kitchens, conservatories and electric blankets, and a paint business in California. And its shares have drastically underperformed the market.

In that time Sir Nigel has changed too - or at least his image has. From a junior version of Lord Hanson, he has recast himself as a renaissance organisation man, taking up a high profile outside board appointments, seeking smaller, agreed deals for Williams as opposed to the high-profile hostile bids. Though he claims he is "not part of the cafe society of London", his presence in boardrooms has become a reas- surance for City analysts anxious about lax management and hasty diversification.

It is an amazing transformation, and one that Hanson and his partner Lord White, for all their big deals, could never make. Now, on the eve of his 50th birthday, Sir Nigel has perhaps all the accoutrements and more of a thoroughly successful captain of industry. He is currently chairman of Williams, now a "focused industrial group" (his advisers don't like the term "conglomerate") capitalised at pounds 2bn. He also chairs Pilkington, the glass giant, where he was appointed last year as the first non-Pilkington family member to head the company; and earlier this year he accepted a place on the board of Barclays. Then of course there is East Midlands Electricity, where Sir Nigel is credited as the architect of the dramatic culture change that has rewarded shareholders with special dividends and ultimately a takeout price from Dominion.

But this New Year's Eve - his birthday - Sir Nigel might be making some resolutions: a fourth age of Rudd is in prospect, where shareholder value is delivered at home. "Over the next two years I aim to produce huge value from Williams. We have got fantastic managers in these companies and we think there's more value in them than the market is giving them. That's the job for the foreseeable future."

Outside his many boardrooms Sir Nigel Rudd lives in comfortable style in a house in the Peak District, about 10 miles from Williams headquarters in Derby, with Lesley, his wife of 27 years. Their three children have all left home - the youngest is in her first year of business studies at Edinburgh University - and when they go on holiday it is to their villa in Portugal. His passions are golf (an enviable 6 handicap) and reading biographies. But it is clear what is his first love: on a rare day off last Thursday, Sir Nigel got so bored he had to go into work. "I got up late - about 8am - and said to Lesley: `How about some golf?' But she told me she had already made plans for the day and was out the door. So what else for it? I couldn't exactly mope around the house all day."

In fact, last week may not have been a typical one in the life of Nigel Rudd, member of the great and good. He chaired the usual Monday meeting at Williams with Roger Carr, Williams' chief executive and other senior managers. Top of the agenda at these meetings now is how the company can realise the "shareholder value" pledges that Sir Nigel is keen on making in his frequent presentations to analysts and investors. Then it was off to Detroit with Roger Leverton, chief executive of Pilkington, to talk glass with Ford. Tuesday evening was spent in conference calls with Schroders over Dominion and East Midlands, and on Wednesday he returned to sign the agreements in principle and introduce his opposite number at Dominion to East Midlands staff.

With so many balls to juggle, critics have wondered whether Sir Nigel's companies (and Williams in particular, where his salary and benefits came to pounds 1.1m last year) gets value for money. But it's how he works best: envisioning the strategy, communicating it to management and letting them get on with it. "I am not afraid to employ someone who's at least as good as me, if not better, and allow them to fulfil their potential. All I ask is that they do their job to the best of their abilities."

Former partner Brian McGowan, now chairman of House of Fraser, says: "Nigel has a perceptive eye for an opportunity, and he brings a decisiveness that is often lacking from a boardroom. It's true we did not always make the right decisions, but we weren't afraid of making them."

Some decisions have not worked out so well. Sir Nigel's association with Raine, the housebuilder, first as non-executive chairman in 1986, then vice chairman, then plain director, was not a happy one. The company was badly caught by the recession in the south of England housing market in the early Nineties and has seen its share price fall from 120p in 1991 to under 20p today. Sir Nigel resigned from the board in 1994 to "seek pastures new". By the same token, the purchase of the Smallbone luxury kitchens business by Williams, on the eve of the 1987 crash, was neither visionary nor profitable. Sir Nigel now admits it was not his finest hour: "We couldn't have bought at a worse time," he says.

However, such things are small blips in a career trajectory that has been on the up for the best part of 30 years. McGowan, along with more numbers-oriented City observers, points to the purchase by Williams of J&H B Jackson in 1985. At the time, Williams had its core foundry business, worth about pounds 12m, and pounds 11m of debt. Jacksons had pounds 20m of assets and pounds 12m in cash.

"The market realised what a great deal we were getting and piled into Wil-liams shares, which shot up, allowing us to pay for the company with our own paper. It was one of those beautiful self-fulfilling prophesies."

And for a supposed business hard man, there's genuine warmth for the straight-talking accountant from Derby. One venture capitalist friend finds him "thoroughly unpompous, immensely practical. He wants people to have as much fun doing business as he does." Even one of the more jaundiced analysts looks forward to lunch with Sir Nigel. "At least you can expect a few jokes," he says.

Brian McGowan recalls lunch last Sunday, when the Dominion bid was in the offing. Sir Nigel insisted on planting his mobile phone in the middle of the dining room table, so during one of the breaks between courses McGowan organised one of the guests to go into the kitchen and phone the mobile, put on an American accent and start talking about the deal. "They had him going for a couple of minutes before we all fell about laughing," says McGowan.

But leave it to Sir Nigel to sum himself up. "I've always believed I could make money, and always enjoyed doing it. I don't see myself stopping anytime soon. Besides, my golf is already pretty good as I've just discovered, there's no point in sitting at home when there's work to be done."