“I have spent over 20 years redeveloping Middleton Hall from a struggling nursing home into one of the leading retirement villages in the UK. For most of the 20 years it has been majority owned by myself and I have taken considerable personal financial risk to turn the company from failing to a successful and profitable company.
During the major physical redevelopment, considerable debt was taken on to finance the increasingly bold developments from the initial £20,000 loan in 1999 to over £4M in 2011. As a result of the successful developments, the debt has been largely paid down and the company is financially stable.
At this point for a mature, cash generating company there are normally two choices:
One – Expand (in our case acquire another site for development) or
Two – Sell out.
Indeed, Middleton Hall has been approached about selling the business and we regularly get offered other sites for development.
As the main shareholder with over 90% of the shares, that decision rests with me personally. And for me, it is a very personal decision. My motivation over the last 22 years has been driven by the desire to build a business that makes a difference to our customers and staff rather than purely for financial reward. And I feel a strong responsibility towards our customers and staff to ensure they benefit from my decision.
Our focus for the foreseeable future is on improving quality at our current site rather than expanding the business to a multi-site operation.
If I was to sell the company in a trade sale (to a bigger company or group), I would gain considerable personal wealth. But I would lose control of the elements of the business that are very important to me – vision, values and long-term legacy. I am also aware that in selling a company you never know who you are really selling to in the long term as the acquiring company at some point may well be acquired themselves and the leadership and vision changes. I have seen that happen to a number of good companies in our sector that have ended up barely a shadow of the business they historically had been when run by a caring owner. Middleton Hall is attractive as an acquisition as it is profitable and generates cash. For a company with a portfolio of retirement villages or care homes, the likely outcome would be use that cash to invest in other sites rather than continue to re-invest in improving quality at Middleton Hall.
Now that we have passed the period of major development and risk, we are steadily reducing the level of debt through bank repayments and Middleton Hall should enter a period of steady sustainable profits. This would normally mean that shareholders are paid higher dividends to reflect increased profitability. I feel we should share that financial reward in the future more equitably.
Because there is a third choice. Employee Ownership.
I feel that our employees who are committed to our vision and values are the most likely to maintain the ethos and spirit of the organisation in the long term.
Employee owned organisations that I have visited over the last three years have demonstrated significant improvements since becoming employee owned to customer service, employee satisfaction, efficiency and recruitment.
So, my personal decision is easy. Moving to an Employee Ownership Trust should sustain Middleton Hall for the long term, ensure continued re-investment, high staff engagement and customer focus. That is far more important to me than the personal wealth from selling the company to a third party”.
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For more information and benefits on Employee Ownership please go to http://employeeownership.co.uk/what-is-employee-ownership/