NEWS EXTRA
need to sell the business. What we do need is for our business to grow, and for it to have an orderly succession.”
Orderly succession is a tough issue, and one that is faced by a great many companies in the industry. “We didn’t want it to happen to us and so, long before that issue would ever arise, we looked at answering the question of how we handle that.”
Business benefits Listed markets are fantastic for family-based businesses, Patel says. ”If you go over to America, Europe, India, the Far East, some of the biggest companies are family-owned listed entities. We just don’t have enough of them in the UK. So, we thought that there was an opportunity for us to demonstrate that you can list a family business that has good professional management and good governance. We have been investing in all of this for many years. Not because we’ve had to but because we’ve wanted to. So, we didn’t see listing as a threat, we saw listing as an opportunity as a different set of conditions under which we will have to operate in the future.” Another major benefit of the listing process, that CFO Chris Day points out, is that it gave the group the opportunity to share some of the company with employees, something that the shareholders had long felt they wanted to do. “We are giving every employee that has
10
been with us for six months or longer on a continuous service basis £2,000 of shares” he says. What this will mean is that the vast majority of colleagues in Lords Group Trading will be shareholders and Patel also says that plenty of them would like to be able to purchase more. “If you look at it from a society point of view this is a way of democratising ownership and that is very powerful,” he says. “Being able to go into the pub or meet friends socially and say that you work for a company where you are a shareholder is a very powerful motivator for people. Chris and I have both known for a number of years that there is an emotional investment when you are able to do that.”
Patel believes that people really should be talking more about this issue of democratising ownership. “When she was Prime Minster, Teresa May was trying to get more equity ownership across the workforces, more involvement of colleagues into their businesses,” he says.
“What we have done is a fantastic way of getting a start on this. When you are early in in your listing, if the company does what it is supposed to do, then there will be significant sharing of the rewards with your colleagues. So that was a really big factor in our decision,” he says. As well as a pleasing number of employees wanting to invest in Lords, the initial fundraising was over-subscribed and Day says
www.buildersmerchantsjournal.net August 2021
that the company is fortunate in having a small and tight group of institutional investors. “There is a lot of money around at the moment but there is also a lot of competition for it, so it’s very pleasing that we were oversubscribed.”
Digital aims
The money raised will fund growth but it doesn’t come with a shopping list of acquisition targets. The Group has been investing heavily in technology over the past few years and this is set to continue. Patel says: “We aim to be a very well digitally connected business. Lots of our processes are digital, and we’re investing in more and more of our digital initiatives. For example, our delivery tracking service quite ahead of the market and it’s
required a large investment to be able to offer that facility.” The stated aim for Lords now that it has listed is to reach a turnover of £500m by 2024, an increase Patel believes is highly achievable via further acquisition and organic growth opportunities. “There are plenty of gaps in our geographical coverage, so we will be open to filling those with whatever opportunities prove the best strategic fit and best meets our parameters.
“We are quite an agnostic business; we aren’t committed to doing X or Y by a certain time, we are more interested in the question: what does doing X or Y do for us and our business? The funding we have generated through listing will allow us to achieve our growth aim.” BMJ
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48
