Dixon the risk-taker changes his tactics to thrive in the recession

You could almost be mistaken for thinking Mark Dixon, the founder and chief executive of office space provider Regus, is enjoying this recession.<br /><br />Perhaps it is because Regus&rsquo; share price has bounced 50 per cent since March.<br /><br />What is clear is that the short, fair-haired, serial entrepreneur who is sitting in one of his flagship serviced offices in Berkeley Square seems to regard the economic downturn as a cleansing fire.<br /><br />An ebullient Dixon, 49, says: &ldquo;Companies that come out of this recession will come out of it transformed as much more efficient businesses. This recession will shake away the cobwebs of the last 40 to 50 years of easy-option business practices.&rdquo;<br /><br />The Monaco-based multimillionaire launched the FTSE 250 firm in Brussels in 1989, after seeing that businessmen found it hard to get office space, says: &ldquo;Don&rsquo;t get me wrong. We are also being affected. It is hurting our margins. We are very focused now on the basics of our business. Our focus is on cashflow. We have little time for anything else at the moment.&rdquo;<br /><br />Dixon has set about getting more cash into the business, by implementing &pound;75m of cost cuts over the last two years, primarily through streamlining back office functions. He has also introduced new products to the business, which runs 1,000 office centres in 77 countries, some as far flung as Honduras, Senegal, and Paraguay.<br /><br />The firm&rsquo;s latest product is the Business World pre-pay card, which Dixon likens to the London Underground Oyster card. It allows customers to use his lounges, access the web and enjoy free tea and coffee from around &pound;17 a month. In around 18 months he has signed up 200,000 members. However, sales in the business are still dominated by renting out workstation space for up to &pound;30 a day; this gets you a desk, a phone and access to a computer terminal. Regus&rsquo; 171,277 workstations account for 81 per cent of the firm&rsquo;s sales, with the new Business World card making up the rest.<br /><br />Dixon wants to continue to diversify his sales by expanding his pre-pay card system, though he won&rsquo;t reveal his targets.<br /><br />The results of his work will have cheered investors last month when Regus reported 2008 full-year profit up 25 per cent to &pound;149.2m. Dixon even made savings on his tax bill last year when he moved the firm&rsquo;s base from the UK, to Jersey with its headquarters in Luxembourg. The firm has &pound;210m in the bank and no debts. Average occupancy rates have inched up slightly to just under 83 per cent.<br /><br />The business &ndash; which employs 5,000 &ndash; has a market capitalisation of around &pound;735m, of which Dixon holds a 37 per cent stake. This stake and other investments put his wealth at &pound;330m.<br /><br />Surprisingly, for someone who is so forceful and optimistic, Dixon has been worried about the economy for years. The father of five says: &ldquo;I was always pessimistic about the economy. The crash just came three years after I thought it would. Prices seemed very high. On a personal level, my daughters could not buy their houses without my help. And I thought that if this is the case for me, how are people with less resources than myself going to afford these prices.&rdquo;<br /><br />Dixon, the son of a Ford car mechanic from Essex who left school at 16 to start a sandwich business, says this is his fourth major downturn. However, he says this one is &ldquo;the mother of all recessions.&rdquo;<br /><br /><strong>RISK-TAKING INSTINCTS</strong><br />Dixon is keen to show investors he has curbed his natural risk-taking instincts, which saw the business swing from phenomenal growth to Chapter 11 bankruptcy in America, which accounts for 40 per cent of its sales, and back again in 20 years.<br /><br />The business expanded at a rate of 90 per cent a year throughout the Nineties, driven by the huge amounts of space it rented to dot.com companies in America. Regus made its London stock market debut in 2000 at 260p, peaking in value at &pound;2.2bn and making Dixon worth &pound;1.3bn.<br /><br />But in the wake of the dot.com crash Regus was left with a lot of empty offices on nine-year leases from property companies. By 2002, the share price had fallen to 3.5p, valuing Dixon&rsquo;s stake at less than &pound;80m.<br /><br />He sought cash from Jon Moulton&rsquo;s UK private equity firm Alchemy Partners to bring Regus out of US bankruptcy protection. A year later Regus was again buying rivals in America, and in 2005 Dixon bought out Alchemy.<br /><br />He says he has learnt his lessons. For a start, the typical length of a lease with a property company has fallen to 3.6 years, allowing him greater flexibility to ditch an empty office. And he has cut expansion plans by half. Last year he opened 100 new centres; in 2009 that figure will fall to 50.<br /><br />Opening new ventures has always been in Dixon&rsquo;s blood. After launching a sandwich firm he travelled the world for a couple of years, paying his way by working in bars and selling encyclopedias.<br /><br />When he returned, he sold hot dogs from a van in Essex, before ploughing his &pound;10,000 savings into setting up The Bread Roll Company, churning out 8,000 hamburger buns a week, which he sold in 1988 for &pound;800,000. It was after this, while on a trip to Brussels, that he got the idea for Regus.<br /><br />Dixon lives the life of a magnate. He is a member of the Monaco yacht club, he owns the Chateau de Berne vineyard in Provence, which produces 600,000 bottles of rose a year, and he went through a &pound;28.7m divorce settlement in 2005 with Trudy, the mother of two of his children.<br /><br />He is also engaged in a high-profile dispute with easyJet founder Stelios Haji-Ioannou over the rights to the Easy Offices name and a conversation about the serviced office business at a meeting at the Savoy Hotel in 2007. The pair are scheduled for a court appearance in December unless their lawyers can reach agreement.<br /><br />But Dixon is keen to reiterate he has learnt the lessons of the Nineties. He says: &ldquo;I&rsquo;m a completely different person from last time around. I take a lot less risk. But we&rsquo;ve not only got to fight the recession, we&rsquo;ve got to get rehabilitated. We&rsquo;ve vowed to leave the emergency ward and not go back.&rdquo; Investors will be hoping he&rsquo;s right when he says he&rsquo;s calmed his impulsive streak.<br /><br /> <!--StartFragment--> <strong>CV MARK DIXON, REGUS CEO<br /></strong><br />Age: 49<br /><br />Work: A string of entrepreneurial businesses that he started from age 16. Founded and is chief executive of Regus, which he launched in 1989.<br /><br />Family: Divorced with four daughters and one son.<br /><br />Houses: Provence, Connecticut,&nbsp;Monaco.<br /><br />Hobbies: Sailing, winemaking,&nbsp;tennis and collecting old trucks.