welcome to employee ownership association annual ... · • identified eo as an option, approached...
TRANSCRIPT
#EOAConference
Welcome to
Employee Ownership Association
Annual Conference 2018
Where employee ownership meets
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Welcome to Financing the Transition to Employee
Ownership
Facilitated by Rachel Williams – John Lewis Partnerships & Partners
Presented by Luke Copley-Wilkins – Carpenter Oak Ltd
Jeremy Burden - Capital for Colleagues
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Background to Carpenter Oak
• Designers and makers of Oak Framed buildings for both domestic and
commercial market
• Established in 1987, now the industry recognised leader in the sector,
regularly winning multiple awards.
• £4.5m T/O with 60 employees across 4 locations in Devon, Cornwall,
Wiltshire and Angus (Scotland)
• Company split in 1999, and remerged recently facing both challenges and
growth opportunities.
• Complex management and shareholder issues arising from the merger
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• Outlaw king trebuchet
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Carpenter Oak Shareholder issues
• 7 shareholders mix of founders, former management buy out team,
investors, no one controlling interest.
• Majority still involved as employees but recognise succession needed
• Significantly varying aspirations for culture and financial
• Majority opposed to trade sale
• Identified EO as an option, approached C4C through NSBRC
• Conversion of equity to shareholder loans inappropriate at this time
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19%
19%
10%7%
5%2%1%
30%
7%
Share holders
still in the
business
Share holders no
longer in the
business
Capital for
Colleagues
Carpenter Oak
Trust2018 Carpenter Oak
Shareholder mix
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15%
15%
8%
6%4%1%1%
24%
25%
Share holders
still in the
business
Share holders no
longer in the
business
Capital for
Colleagues
Carpenter Oak
Trust
2020 Carpenter Oak
Shareholder mix
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Journey/timeline towards EO
• Company lacking conventional institutional debt capacity, needed cash flow to
reorganise, grow & move towards EO.
• Difficulty in agreeing existing valuation, once completed, 10% was gifted from all
shareholder to a employee trust
• C4C initial equity investment, became largest minority shareholder (30%).
Recognising opportunities for growth and interest in EO.
• New funds to support reorganisation costs, start process towards EO,
rationalising management structure and invest in new initiatives
• Initial mechanism agreed to increase EO stake, now recognised this had issues.
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Challenges
Make EO clear and meaningful to all employee colleagues after period of
change and suppressed wages
Secure productivity gains which will drive returns to all shareholders
Manage transition from experienced former manager shareholders to
new less experienced generation
Balance financial interests of company, trust and exiting shareholders –
governance and communication / performance management and
reporting.
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• Created an ability to move towards EO without suffocating the
business
• Ensure all shareholders are aligned with aim, value & timescale
• Establish the valuation method is suitable, engaging & realistic
Lessons
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Questions and Discussions
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Thank you. Please make your way to
Kings Suite for refreshments
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