Hebden Bridge-headquartered fuel supplier Craggs Energy Ltd and its sister company in Devon, Moorland Fuels Ltd, have transferred ownership of the businesses to their 55-strong workforce in a deal advised by the corporate finance teams at Leeds law firm Clarion and chartered accountants BHP.
The directors have transferred 100 per cent of shares in the businesses to their teams by establishing an Employee Ownership Trust (EOT), funded by future profits.
The companies, both of which have been in operation for over ten years, have grown into significant players in the UK fuel industry, providing fuel delivery services and wider solutions to homes, farms and businesses. With bases in Hebden Bridge, West Yorkshire, and Padiham in Lancashire, Craggs Energy, predominantly serves the North of England, while Moorland Fuels serves the South West from its Okehampton head office.
Group chairman Chris Bingham, said: “I’ve been considering the option of employee ownership for quite some time and when we looked into the benefits and alternatives available to us, an EOT was the obvious choice as it allows the existing shareholders to plan their exit over a longer term while transferring the benefits to the employees.
“As successful and ever-growing businesses, we could have sold to a third party, however, I place great value on my team and wanted to be able to reward the people who have grown the businesses to where they are today.
“As far as I am aware, we are the first fuel distribution companies in the UK to transfer 100% of our ownership to an EOT. The response from our shareholders and our staff has been extremely positive and there has been an increase in productivity and motivation which I’m sure will help to drive future growth. There’s no doubt in my mind, that creating an employee-led business is a good thing, and it would be great to see more companies consider the EOT route rather than a traditional trade sale.”
The Clarion team, led by Kaira Clarehugh and Jonathan Simms, provided legal advice, while Amanda Waterhouse and Lewis Richardson of BHP established the EOT and advised on structure and taxation issues.
Kaira Clarehugh added: “In recent years, we’ve seen EOTs becoming more and more popular and it’s certainly a great way of rewarding the staff as well as motivating greater productivity and a bright future for the business and the community. We have worked with Craggs over a number of years and are delighted to have assisted the business on its move to an employee-owned model which is a fantastic fit for the culture of Craggs.”
In 2021, Craggs Energy achieved turnover of £33.1m and is forecast to see over 54 per cent growth this year, rising to £51.2m. The company currently has 37 employees and the volume forecast for 2022 shows at least a 15.7 per cent growth to 58.1m litres.
For Moorland Fuels, turnover in 2021 was £13.7m and this is expected to at least double this year, reaching a £27.5m turnover. Employing 18 people, the volume forecast for 2022 shows at least a 47.3 per cent growth to 32.7m litres.
Richard ‘Bert’ Ingram, who’s been with Craggs for 10 years as a HGV Tanker Driver said: “I’ve been with Craggs for such a long time because it’s a great company to work for and it’s been good to see the company grow over the years. The announcement of the EOT reiterates why Craggs is such a fantastic employer, they reward their staff for hard work and eventually we will all reap the rewards.”