Robert Galbraith CA on how theme-park giant Merlin weathered the pandemic
Diligence, resilience and diversity are the holy trinity when faced with a global crisis. Robert Galbraith CA, Head of Finance at Merlin Entertainments Japan, tells Nick Scott how the theme-park giant weathered the storm to get hearts racing again
“And he read Principles of Accounting all morning, but just to make it interesting, he put lots of dragons in it.” The late Terry Pratchett, in his 2006 children’s novel Wintersmith, may have resorted to a rather hackneyed cliche about the profession, but a little flight of fantasy can certainly sprinkle some stardust on the job. Just ask Robert Galbraith CA, Head of Finance at the Japanese branch of Merlin Entertainments – the Dorset-based operator of world-famous visitor attractions, including Alton Towers, Chessington World of Adventures, Legoland Parks and Madame Tussauds.
“A company like Merlin attracts a certain type of person,” he says. “Everyone just enjoys what they do, and you can see that in day-to-day interactions across the organisation. We tend to have well-rounded people in all different positions.” For all the magic in the air in Merlin’s sphere of operation, though, these are trying times. Those parts of the entertainment industry that involve large groups of people being in close proximity – theatres, concert venues, cinemas and, indeed, theme parks – have been hit badly by lockdowns, as demonstrated when Disney laid off 28,000 theme-park workers in late 2020.
Indeed, Merlin suffered a pre-tax loss of £648m last year, with revenue falling 64.2% from the previous year. In part, this is attributable to an extremely successful 2019: a year in which Merlin – the second biggest operator of visitor attractions in the world – was bought by a private equity consortium which included Lego’s Danish founder family, and generated approximately £1.74bn in revenue, an increase from £1.69bn the previous year.
Its 2019 performance was particularly impressive in Galbraith’s country of operation. “In Japan, that was a record year for us in terms of visitation to the three attractions we have there,” he says. “The Japan inbound market had tripled in the 10 years leading up to it – and then, obviously, that all came to a shuddering halt.”
Asia, though, according to Galbraith – who was Director of Finance and Administration at Club Med for four and a half years before joining Merlin – has been playing catch-up with other regions when it comes to recovery. “Our Thai attractions have only just reopened after several months’ closure,” he says. “So it’s pretty sluggish. Obviously, that’s related to the vaccination uptake. Japan has caught up on that front – we’re at around 66% of people being double-vaccinated now, and consumer confidence will return with that. Currently, when I look at the recovery rates, America is probably ahead of the curve. Behind that is Europe, including the UK. And then last, unfortunately, is APAC [Asia-Pacific], partly because of our extended lockdowns.”
So how have Galbraith and his colleagues at Merlin tackled the biggest global challenge of modern times? “A finance department is like the cockpit of a business,” he says. “Like any company, we have a lot of metrics that we monitor on a regular basis – revenues, gross margins, cashflow. Once we hit the pandemic, everything was screaming red. Our role in finance has been to reassure the team where it makes sense to do so. We share data with, and benchmark against, competitors, so where there are incremental improvements and recovery, our job is to share that, so the team are reassured that we’re heading in the right direction.
“The other part, as we come out of the recovery period and, hopefully, enter the post-pandemic phase, is setting a clear vision for how we go ahead. That’s where the forecasting becomes important, so that everyone is clear about where the company is headed. That’s where finance plays a pivotal role during the pandemic and the recovery.”
A company like Merlin attracts a certain type of person: everyone just enjoys what they do.
Now that the giant that is the entertainment industry is waking up, how have priorities for day-to-day operations changed? “First and foremost, it’s about HSS – health, safety, security: giving that unequivocal reassurance to the customer that venues are a safe place to visit,” he says. “We’ve taken tangible steps to achieve that, setting up prominent social-distancing signage, highly visible cleaning activity, and so on. Our industry is obviously high risk, especially with kids playing with Lego. So we’ve taken strong steps to offer a level of comfort. And then the last one, of course, is imposing visitation limits. Surveys so far suggest we’re doing the right thing.”
Consumer confidence established – and with the developed world’s appetite for popular culture-based family days out whetted by lockdowns in front of Netflix, plus the enforced staycation trend added into the mix – a company like Merlin has one eye fixed on opportunities for expansion. So how does it intend to exploit the upsides of the reshaped landscape?
“We’re looking to establish ‘gateway cities’ – a handful of global hotspots with strong tourism and visitation potential, and Japan is one of those. We’re exploring additional sites and my role within that would be to support the General Manager in the due diligence, so that we understand fully the potential acquisition, and subsequently doing the business planning.”
Galbraith is not merely bilingual: he’s a native speaker of English and Japanese, having spent 10 of his formative years in Japan and 20, including his ICAS training, in the UK. He describes this as “pretty critical” to his role. But there’s more to his dual nationality than his linguistic skills.
“It’s about being bicultural as well as bilingual,” he says. “Working with the locals, understanding the cultural nuances and being able to communicate effectively with the people in the UK and the regional offices and APAC is pretty invaluable.”
The difference between the two cultures is an oft-discussed topic and invariably leads to already well-worn truisms about two-handed business card acceptance and the retention, or loss, of face. But what, in Galbraith’s experience, are the finer brushstrokes?
“Western people are more willing to speak their minds and to make on-the-spot decisions,” he says. “It’s very much a consensus mindset in Japan. So being that person in the group who speaks out first or who just creates an environment where it’s okay to voice your opinion can be useful. It’s about building a trust bubble within the senior leadership group to enable things to happen.
“That said, in Japan, once you’ve made a decision, everything moves faster because they get a clear end goal and process towards it in their minds. Once a plan is established, the execution is brilliant.”
In order to benefit from, rather than be hampered by, cultural divergences, Galbraith says the company holds regular masterclasses, where senior personnel talk on subjects of their choosing, with everyone encouraged to “dial in and tell their story”.
“A big topic for us at the moment is diversity and inclusion,” he says. “I sit on the company’s Asia-Pacific region diversity and inclusivity taskforce, which is something entirely new because Japan is a very conservative country. Staff volunteered to talk about their experiences – from an LGBT perspective, as a foreigner living in Japan, and so on. It captured everyone’s attention straight away.
“There’s a high level of engagement on this going forward, so we can be a local pioneer. I don’t want to enforce western values on Japan, but I do want to open up discussion with people here, and give them the opportunity to voice their opinions on any given subject.”
Such a global perspective has its foundation in what Galbraith learned while doing his ICAS training, which, he says, was something of an “in at the deep end” experience.
“My background is in linguistics and the arts, so up until 2010 I didn’t know anything about accounting. Eleven years later, here I am, a Head of Finance in Japan. The CA qualification gives you a breadth and depth of knowledge as well as practical experience through the application, the exams, to tackle any challenge that comes your way in finance. The breadth of tasks can vary: from day-to-day accounting to budgeting and forecasting, internal controls, dealing with internal audit and understanding from the previous audit report what needs to be remedied.
“That education allows you to confidently tackle these kinds of tasks. More than anything, it’s just given me a lot of confidence in what I do. In Japan, most CAs tend to be either from the US or Japanese. And I’m not sure why, but a UK qualification is seen as very impressive!”
Of course, to expect any curriculum to hand CAs the tools to slay the dragon that is a global pandemic would be a little fantastical, but it can certainly help you brace for the impact. “Something like the pandemic boils down a lot to resilience,” he says. “And that resilience is supplemented by having a lot of confidence in what you’re doing – and that comes from the CA.”