United Group at 100: honouring a legacy while shaping a future

A hundred years is a remarkable milestone, and United Group’s centenary is an opportunity to celebrate its legacy while looking ahead to the next chapter. For Edmund Gatt Baldacchino, CEO of United Group, who has helped steer the Group’s expansion and diversification over the years, it is also a moment to reflect on the values and decisions that have shaped the business.

“You look back and ask yourself what the successes were, and what the challenges were as well. In both cases, there was a great deal of hard work and a great deal of relationship-building,” he says. “The Group has always maintained excellent relations with its principals, partners and employees, and those relationships are central to the success of any organisation. You cannot build an organisation without the people you constantly collaborate with, and the same goes for the customers. We have customers whose families continuing to work with the Group across generations.”

If the past century has taught the Group anything, it is the importance of adapting and evolving. That ability to embrace change continues to shape its outlook for the years ahead. Mr Gatt Baldacchino’s grandfather brought the first bus in Malta and also set up a small chauffeur driven company.  “On the demise of my grandfather, my father, Mr Charles Gatt Baldacchino, at a young age took over the business and continued to operate the chauffeur-driven business, building strong relationships with the British community on the island before branching into car rentals.  Bringing the Hertz brand to Malta enabled the business to cater for the growing tourism industry in the post-war years.”  Edmund Gatt Baldacchino explains.

“As tourism took off, my father subsequently began developing relationships with British tour operators and started bringing tourists to Malta, attracting as many as 160,000 visitors a year from the UK. He became the local agent and partner for Exchange Travel and Thomson Holidays and held close collaborations with them for many years. In 1982, the Group entered car importation, acquired the Adam Opel franchise, before further diversifying into property including leading a consortium of investors to develop Pendergardens.  The Group also expanded into fashion retail, with leading brands such as Debenhams.  More recently the Group expanded its operations into the real estate market in Austria.

“Malta’s economy has gone through an amazing transformation, and we had to adapt the way we run our business along with it,” Mr Gatt Baldacchino explains. “From one generation to the next, there has always been adaptability, an understanding of what customers expect, and the ability to decide quickly.”

Despite its international ambitions, Malta remains firmly at the heart of the Group. “Malta is our identity, it is in our DNA, and it is a source of real pride for us. We will continue to invest in our core businesses here and to modernise them, and we will keep looking for new opportunities in Malta,” he says.

The move into Austria reflects that same willingness to evolve. The Group continues to assess opportunities there and potentially in other markets, while remaining firmly rooted in Malta. “We felt that international expansion was a natural evolution for the Group, opening up new opportunities.” Mr Gatt Baldacchino said.

“Austria offered a high level of professionalism, a very structured economy, political stability and a very capable workforce together with a network of professionals we could work with.  For us, the widespread proficiency in English was an additional advantage.” Vienna is a big city without feeling overwhelming, it is just two hours from Malta, and it even has a café culture we are so familiar with at home. People there think about business in a similar way to us. Our experience to date is that we have managed to develop relationships who have a long-term perspective and who conduct business in a professional manner delivering quality in-line with our values. 

For Mr Gatt Baldacchino, such expansion would not have been possible without strong governance, which the Group put in place early on. “We were one of the first family-owned companies to issue a bond in the early 2000s, which meant that our governance had to be strengthened. Today all family members and management understand its importance. We have an independent non-executive chair and independent directors, and even our investments benefit from independent input,” he explains.

“That independent view challenges all of us and brings a perspective on the business free of emotion. Emotions are very important, because they give us the authenticity we are so proud of, but having an independent voice gives you the objectivity needed for healthy business. Governance makes you raise your game and take a leap in quality, and without it we would not have evolved and be present in the markets we are in today. Without it would have never managed to move internationally, especially into Austria.”

That discipline extends well beyond the boardroom. As Mr Gatt Baldacchino points out, governance does not stop at the board table. “Managers often know how to manage downwards, but it is just as important for them to be able to manage upwards, managing expectations and passing on the right information, so that the board can take a well-assessed decision.”

Values, trust and mutual respect remain central to the Group, and Mr Gatt Baldacchino sees the longevity of its relationships as one of the clearest demonstrations of these principles in practice. “You see it in the number of suppliers who continue to choose to work with us, and in employees who have been with us for 25 or 30 years. These are relationships that go beyond the transaction,” he says. “We are the oldest Hertz franchisee in Europe, with a relationship that goes back 65 years, and over the years held long partnerships with other brands.  In 2005 we led a consortium of investors into Pendergardens, which became a long-term relationship around its development, and recently through Motors Inc, we work closely together with the Fenech and Mamo families. It is easy to look only at the bottom line, but reputation, relationships and trust count for far more over time.”

Diversification has been a recurring theme throughout the Group’s history, but Mr Gatt Baldacchino is clear that it must be approached with discipline. “We are constantly looking for new investment opportunities which we carefully assess to make sure it fits our risk appetite and our strategic vision. It is important to understand when to invest, when to partner, when to consolidate and when to exit. There are times that call for bold decisions, times when you need to recognise that it is time to exit, and times when you spin something off from your core business,” he explains. “We keep an open mind about new business opportunities.  We look for three main fundamentals: a clear business plan, with the financials and cash flows to back it up, good governance of the investment, and a leader to drive it.”

Asked what has enabled United Group to endure where so many other businesses have not, Mr Gatt Baldacchino returns to the foundations on which it was built. “We come from an entrepreneurial family, and both my parents embodied that entrepreneurial spirit and resilience. They have instilled a culture of hard work, respect, integrity, and discipline to conduct business ethically and stay true to our values. Add to that the ability to adapt, diversification, strong governance and surround ourselves with competent professional advice. We always go for the best advisors which gives the board further comfort and have worked with key advisors for decades being legal advisers, auditors, insurers and architects and other consultants for decades.  We will always go for the best.”

Looking 25 years ahead, he hopes the Group will continue to be defined by the qualities that have sustained it over the past century. “We will continue evolving, adapting and investing in new chapters, and Austria is giving us the opportunity to do that on the international stage, while making sure our values are maintained and our relationships remain excellent. We want to see the next generation gradually take up the baton. They have begun taking an active role in the business, bringing fresh perspectives and building on the foundations established by previous generations. 

Mr Gatt Baldacchino says. “This is a time to recognise the work of our founders, to honour our legacy and to shape our future. That means pushing ourselves out of our comfort zone, in a managed way, because unless you do so, you do not grow and continue evolving.”