Buckingham Group Contracting has become the biggest contractor to transfer equity to an employee ownership trust.
To mark the move to employee-ownership 530 eligible staff received a celebratory £1,000 tax free bonus.
At the same time, founders Paul Wheeler and Patricia Wheeler, and long-standing group stadia director and partner Kevin Underwood all retire from the board in the ownership transfer deal.
Long-term partners former CEO Mike Kempley and COO Tim Brown have been promoted chairman and deputy chairman, and are committed to stay with the business for 5-years and 2-years respectively.
Board of directors making up new senior leadership team
Ian McSeveney – Group Managing Director – Director since 2014Simon Walkley – Deputy Group Managing Director – Director since 2014Andrew Kerr – Group Financial Director – Director since 2018Richard Plant – Group Commercial Director – Director since January 2020>
Wheeler said: “Back in 1987 when the company was first incorporated, I never dreamt that the business, which was originally known as ‘Buckingham Plant Hire Contracting Limited’ would ever accomplish such remarkable achievements.
“With growing annual sales revenues nudging £700m for 2021, the business has attained the status of being a large corporate, widely recognised for delivering top quality projects and has become consistently established within the ‘Top Twenty’ private construction contractors in the UK.
“None of this would have been possible without the commitment, skills and dedication of our staff members, our management teams and everyone working in departments across the whole business.”
“In recognizing the amazing results that are now being achieved more than 30-years later, it is wholly appropriate that ownership of the business is being handed down from its founding partners to an all-embracing model of common ownership under the newly established Employee Ownership Trust.”
Kerr said: “There is no debt funding involved in the transaction, with a prudent initial payment to the selling owners coming from surplus reserves.
“Consequently, year-end net assets will remain robust at around £37m in 2021, close to the position in December 2019.
“The former owners are not motivated by a quick payment timeframe that might undermine the financial strength of the company in any way.
“Instead, they want to see the business remain financially strong to secure its lasting success.”
The Trust will be represented by a corporate trustee: BGC Trustee Ltd, led by independent chairman Russell Field. The Trustee Board also comprises two member directors balanced with two employee directors.
The EOT will always retain a minimum 60% equity in Buckingham, allowing for future issue of growth shares.
Employee Ownership Trust
An EOT is a special form of employee benefit trust introduced by the Government in September 2014 in an attempt to encourage more shareholders to set up a corporate structure similar to the John Lewis model.
The aim is to facilitate wider employee-ownership, albeit via an indirect holding company.
Shareholders selling their business to their employees are also crucially not liable for capital gains tax.
EOT controlled companies are also able to pay income tax-free bonuses of up to £3,600 per year to staff.
Data suggests that employee-owned businesses drive corporate performance with higher productivity, profitability and greater levels of innovations.
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