JJO plc has announced that as of March 2 it is majority-owned by its employees.
JJO shareholders sold 67% of their shares to a newly-established Employee Ownership Trust (EOT), with much of the consideration deferred over the next 15 years. This trust holds a permanent or long-term shareholding on trust for the benefit of all of the company’s employees.
The company has been in the hands of the Greenhalgh family for half of its 150-year history and took the decision to switch to the new ownership model because of a desire to “sustain the company’s independence and values, while recognizing the efforts of its employees and their massive contribution to JJO’s considerable success”.
Said managing director Stephen Greenhalgh: “Although Gill and I remain committed to the business, we realised that the next generation are many years away from acquiring the skills to operate such a large and complex operation. So there was no natural exit strategy.
“Involving private equity was not something we wanted to consider. A trade sale, while attractive for shareholders, would not have guaranteed jobs for our brilliant team or ensured that our father’s legacy lives on.
“Following professional advice, it seemed an Employee Ownership Trust would provide a ‘best of both worlds’ solution – safeguarding the continuity of the business and enabling the shareholders to extract some value (while maintaining an ongoing stake) as well as securing the future well-being of JJO’sextended family.”
The company said that the key benefits of the EOT included the continuation of business as usual, increased productivity through employee engagement, average growth of 28% for EOT businesses and allowing employees to have a say in how the business is run.
JJO said that in the UK, of all companies with between 10 and 250 employees, only 320 are EOT businesses – one of the largest being the John Lewis Partnership, whose employees receive a share of the company’s profits as an annual bonus, with all employees receiving the same percentage of their salary.
Greenhalgh added: “It will be business as usual but better – no deviation from the JJO ethos and unswerving pride in delivering products customers want, when they want them.”
Joint MD Lee Greenhalgh, who joined JJO in 1977, will be stepping back from day-to-day involvement. The existing executive board will remain in place for the medium term, with Lee adopting a non-executive role in the longer term.
Today, the Lancashire-based kitchen, bedroom and bathroom manufacturer and supplier employs 330 staff at its 1.2 million sq ft base in Bacup, where it produces more than 600 kitchens, bedrooms and bathrooms a week. More than half of its staff have been with the company for 10 years or longer and 70 of them have more than two decades of service.