The Trust, which is operated for the benefit of all employees, owns 100% of Coastal Recycling Holdings Limited and its subsidiaries, having purchased it from its previous owners for an undisclosed fee.
The company hopes this will deliver better results as employees will be directly incentivised, as a profit share mechanism will enable them to receive tax free bonuses, and they can directly influence how the business performs.
The transition to the Employee Ownership Trust was supported by a funding package from Lloyds Bank.
Coastal Recycling, which describes itself as Devon’s largest waste management company, has sites across the county. It provides services in recycling, material processing and refuse collection, and says it has 2,000 commercial customers with a range of recycling focused services.
Emily Delve, commercial director at Coastal, said: “This fantastic news means the business is now operated for the benefit of all the 140 people who work here. Our teams feel invested in the business and have a direct incentive to build a successful organisation that continues to deliver great service to customers. Staff will also share in the group’s financial success through profit related bonuses.”
“Our teams feel invested in the business and have a direct incentive to build a successful organisation”
In its financial results for the 2019/20 year, the company generated £21.1 million of revenue, with a £1.6 million profit before tax.
Coastal Recycling’s current board members, managing director Steve Hadley and commercial director Emily Delve, will remain in position and Beth Kelly, the company’s HR manager, will now join the board to run the new Employee Ownership Trust.
Mr Hadley explained: “The Coastal Recycling group of companies has grown year on year through our strategic focus and customer service, helping our customers to improve and increase their recycling. Early on, we recognised the importance of our staff as a key driver for our business and have invested heavily in them and the business in recent years. By becoming an Employee Ownership Trust we have protected the independence of the business and given our teams a vested interest in the Group they work for and the ability to share in its success.”
EOTs were introduced by the government in 2014 and can be appealing for sellers as transaction costs are usually lower and matters may proceed more quickly than with a third-party buyer.
Deb Oxley OBE, chief executive of the Employee Ownership Association (EOA), said: “We congratulate Coastal Recycling and its employee owners on their move to employee ownership securing the values and independence of the business for the longer term.
“Businesses that give employees a stake and a say build trust and shared responsibility, therefore uniting leaders and employees behind a common purpose. This leaves the business in the best position to flex and adapt to recover from challenges and to deliver on new opportunities.”
The move was also backed by Paul Collings, relationship director at Lloyds Bank, who stated: “Coastal Recycling is a well-established business across the South West and the transition to an employee-owned status further cements its commitment to the region. Steve Hadley and the team are a long-standing client of Lloyds Bank and we’re incredibly proud to have supported them throughout their sustained growth.”