Scottish firms report performance boost after staff takeover

The Herald Scotland

7 hours ago

Hundreds of firms across Scotland have opted to move the majority of shares to staff and have said it provides security and continuity.
United Auctions said the move to an employee ownership trust will help longevity for the business.
Families, some of whom have been in business for generations, are among the owners selling to employees.
The historic RP Slight and Sons moved to employee ownership in 2024 and said it is already seeing benefits.
The East Lothian company is linked to the building of the world's oldest sea-washed lighthouse and the construction of Capitol Hill in Washington DC in the US.
James Slight told Business HQ Monthly: 'In the time since the change was implemented, the business has undergone a noticeable gear change.'
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A Fife contractor which had been in the hands of the same family for three generations also made the move, with a workforce of around 90 becoming part-owners.
Donna McElhinney, finance director at T&N Gilmartin, said the firm had been 'facing a challenge in succession planning'.
She said employee ownership 'emerged as the obvious and most suitable choice for our business'.
Graham Clark, founder of Anderson Clark Motor Repairs in Inverness, said shifting ownership has 'given the staff a shared purpose and greater engagement with the business'.
The companies are part of a growing number, with hundreds of businesses in Scotland now operating under this kind of ownership model.
BIG READ
This month's edition is out now in print and online. (Image: Newsquest) A Scottish auctioneer founded more than 160 years ago has had a varied history of ownership over the decades.
'Going back to 1858, we've been in various guises, limited companies, PLCs, bought by a property developer, and then two management buyouts', said Christopher Sharp, one of the new owners of a business where he started work at the age of 17.
For United Auctions, the move to an employee ownership trust will help provide continuity for customers and staff and longevity for the business.
It is an option that has been rising in popularity.
The number of employee-owned businesses is growing at a rate of around 45 a year in Scotland, with nearly 300 at the time of the census in September, which was up from 195 on the previous count, last done in 2022, and created for Scottish Enterprise by academics from the University of Leeds, University of New South Wales and the White Rose Employee Ownership Centre.
The national enterprise agency is aiming at a Scottish Government target of 500 such employee-owned businesses by 2030.
Scottish employee-owned businesses and worker cooperatives currently have a combined turnover of £1.47 billion and employ 7,593 people, which is a 113 per cent increase in turnover on the £780m and a 42.5 per cent rise on the 2,265 employed the time of the 2022 census.
United Auctions, which has an annual turnover of £246 million, is one of the newest companies to opt for the avenue of employee ownership, and it only changed its status in April. The company operates a network of livestock auction markets across Scotland, including Stirling, Huntly, Lairg, Dalmally, Tiree, Islay, Uist and Oban.
Mr Sharp said in an exclusive interview with Business HQ Monthly: 'We were the management buyout in 2017. We had a long-term 10-year commitment with the partners to take the business forward.
'We were always looking at exit strategies, as any business does. The employee ownership trust just really seemed to tick so many boxes and thought it was really good for ourselves, good for the company, good for the customers.
'We started to look at that as a route to exit, and as six months or so progressed, speaking to the bank, funding from HSBC, everything looked like it was going to work out and allowed for the retiral of one of the partners, who was 63 at the time.
'The other three partners are a bit younger, from 48 to 55.
'It is great for us that we didn't have that sort of cliff edge. Although we had a great management, we do have a great management team coming through, it allowed us to keep a lot of experience within the company as well, rather than just sort of walking off.'
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Mr Sharp said: 'The whole structure of the EOT just seemed to work very, very well for us, and that's one we decided to take forward.
'I think the whole actual process of saying, you know, let's do an EOT would be about nine months, I would say.'
He continued: 'It worked very well, and the advisors helped us through the process as well and allowed us to set up our management teams to take forward for George's retirement and the continuity of the business.
'The three exiting shareholders obviously stay in the board and we introduced three new board members as well.
'That allows having the experience of the old directors and the new directors coming on to allow that smooth changeover. So over time, and we're all different ages, over time that will allow the continuity of the business to drive it forward and directors will be replaced and not quite rotation, but as the company progresses and ages progress and the experiences, that allows the experience of all board members to drive the company forward.'
Mr Sharp said: 'I think we're a very, very simple business. If anyone will ask us what we do, and rather than give a three-paragraph synopsis, we sell cattle and sheep and we have done since 1858.
'As simple as that, but very unique as well.
'I think farming is unique. Farming's got its challenges, as everyone knows, and farming is a very challenging business. The auction company is so aligned to farming and farmers that we face those challenges as well.
'We've been through many challenges, especially with BSE and foot and mouth twice. But as most farmers are, we're a very resilient business and have managed to get through these and credit crunches and Covid, and we've survived through them.
'So, a very simple business, but very unique and exciting as well. Even for our office staff, you're not eight hours a day behind the computer. You have the excitement and the enthusiasm of an auction behind you as well.
'Covering so many sites gives us that great geography through Scotland and the different customers as well.
'The actual ownership to a company's house or shareholdings is immaterial. We're really the only custodians of the building in the market.
'It really does belong to our customers that have used it for generations.'
He has been with the company 31 years.
'I've seen granddads, sons, grandsons, granddaughters all coming through now, employing them as well.
'I do believe when you've had the relationship with these customers, families for 100 years in some cases, and farmers, they're not going away.
'We've got about 18,000 customers. If we put all our sales staff in the room, we could give you a story about all of them.
'You know, because they're friends as well, because in social circles in farming, you imagine are quite small.
'We really believe in our customers and just want to do the best for them as well.
'Again, the EOT allowed that longevity. We weren't taken over by a property developer again or anything that could put that at risk.'
His own story stretches back to when he was a teenager.
'I'm 48 now, so I was 17. I walked through the door as an office junior in March 95.
'It's been a tremendous journey and really enjoyable. And, you know, it generally doesn't feel like a job.
'To have the markets throughout Scotland and keeping them running and providing the platform to the farmers to allow them to sell their stock in a fair market condition has been really important to us.
'Achieving the maximum for our customers and the farmers is really what we want. Any business needs to make profit, but our primary concern is ensuring that the cows and the ewes stay on the land.
'That's the most important thing for us."
He added: 'The longevity of the company was the most important thing for us.
'Allowing that progression for staff to carry the company forward for generations to come, and allowing keeping the facility in the business for our customers. But we're really proud of the business.
'We're really proud of what we do. It's our lives as much as jobs, though we don't feel we've got jobs, we give our staff careers because we've shown that can happen.
'Most of our senior staff have all been in the auction industry all their life as well.'
Family legacy interwoven with history
Bell Rock lighthouse under construction. (Image: API/Gamma-Rapho via Getty Images) An East Lothian family company linked to the building of the world's oldest lighthouse and the construction of Capitol Hill in Washington DC in 1825 moved into employee ownership in September, and is already seeing benefits.
Robert P Slight & Sons Limited, based in Wallyford, was sold to an employee ownership trust, which holds the shares on behalf of the company's 40 staff.
The Slight family's legacy is interwoven with significant historical buildings. Ancestors were among the team who constructed the Bell Rock Lighthouse, the world's oldest surviving sea-washed lighthouse off Angus and the design and construction of more than seventy lighthouses in Chile.
The Slight family name is also linked to the construction of the United States' iconic Congressional Building, Capitol Hill.
Pringle Slight was project foreman responsible for overseeing the building's construction, including the famous dome.
The R P Slight team together. (Image: R P Slight & Sons) His son, Robert, continued this legacy but tragically lost his life in a fall from the dome in 1861.
Both are honoured in the Congressional Graveyard in Washington DC, United States, in a testament to their contribution and the enduring legacy of the skill and dedication of the Slight family.
James Slight told Business HQ Monthly: 'RP Slight and Sons moved to employee ownership in 2024 for a number of reasons.
'Central to our decision, was to reward our staff and preserve our company culture and values. incorporated in 1958, RPS has a culture focused on our staff with some remaining with us long term, from apprenticeship to retirement. Although we have grown significantly, we wanted to retain this atmosphere and our traditions, and of the various options available, selling to an EOT offered the best path.
'In the time since the change was implemented, the business has undergone a noticeable gear change. Our staff feel more engaged knowing their efforts will be rewarded and directly contribute to business success. This has led to increasingly strong results on contracts and frameworks we have held, and those recently awarded.'
Top repair centre is first of its kind to sell to staff
The company's base. (Image: Anderson Clark) A Scottish independent motor vehicle repair company, Anderson Clark Motor Repairs, was the first of its kind to steer a new future under employee ownership in the shape of a trust formed by its 14 staff.
The company has been in business for over 28 years and said it is recognised as one of the top repair centres in the UK after winning numerous independent repair centre awards and having Investor in People Gold Standard Recognition, with a turnover of £2 million.
The Inverness-based business was owned by the Graham and Sheila Clark's family who remain involved as part of the transition to employee ownership.
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The new leadership team comprises an experienced team with Neil Johnstone, managing director designate, Katie Fraser, company secretary, and Alan Reid, workshop manager, all having been with Anderson Clark for many years.
Graham Clark, founder, Anderson Clark, said: 'The EOT came about with me considering an exit strategy as I'm now mid 60s.
'I had a few options for consideration. To simply close the business and pay redundancy, but the business is very successful, that would be very expensive and jeopardise all the employee's jobs; To put the business on the open market but that caused me major concern with a new buyer not having the same business ethics as ACMR; And the conclusion of opting for the EOT, once understood, was a positive way for us to move forward.'
He said that the move has 'given the staff a shared purpose and greater engagement with the business'.
Strong sales follow change of ownership
The T&N Gilmartin team. (Image: T&N Gilmartin) A Fife-based contractor which has been in the hands of the same family for three generations also made the move, with a workforce of around 90 becoming part-owners.
T&N Gilmartin (Contractors) Ltd was founded in 1956 by Tommie Gilmartin. The firm said that under former managing director Tommy Gilmartin, son of Tommie Gilmartin, and fellow shareholder Pat Gilmartin, the company diversified and grew into what it describes as 'a successful multi-disciplined contractor and a key employer in north-east Fife'.
Donna McElhinney, finance director at T&N Gilmartin, said: 'T&N Gilmartin Contractors Ltd, prior to the employee ownership trust, was a third-generation family company facing a challenge in succession planning.
'We had considered some outside acquisition offers, but ultimately felt that accepting them would have led to a loss of our company's core ethos and potentially demoralised our long-serving staff. Given these considerations, an EOT emerged as the obvious and most suitable choice for our business.
'Since the EOT was implemented, the company has gone from strength to strength. Our sales are very strong, and our staff genuinely feel they have a significant input and a vital part to play in the future success of the company. We are particularly grateful for TLT's role in this transition, their team was instrumental in making the entire EOT process as smooth as possible, and the help and advice they provided were invaluable.'