Civils company sets up trust for employee ownership

Fitzgerald Contractors hand ownership to employees

Civil engineer Fitzgerald Contractors has become the latest company to hand ownership over to an employee trust.

Civil engineer Fitzgerald Contractors has become the latest company to transfer ownership to an employee ownership trust. 

Managing Director Nick Coley, who acquired the business in 2013 when its parent company, Thomas Vale, was bought by Bouygues UK, completed the transition of ownership to the employees on 21 February. The business is now 100% owned by the 120 employees.

Nick Coley remains MD and the existing Board of Directors retain their roles. They say employee ownership will provide greater opportunities for staff to influence business decisions through the formation of an employee council.

Nick says: “We consider that an employee ownership trust model is ideally suited to Fitzgerald’s philosophy. The thinking behind employee ownership has businesses exactly like ours in mind. This is a very exciting stage in the company’s history and safeguards Fitzgerald’s future for the benefit of all employees.”

The company, which had a turnover of £17.1miillion in the year to the end of March 2021 (down from £23.4million in 2020) says employee ownership will allow it to provide greater opportunities for succession from within the internal management team over the coming years, an ethos it says has already served it well.

An employee ownership trust is where the employees of a business own all or most of the shares in a company. It is growing in popularity as it offers benefits for businesses, their owners and employees as a way of succession planning.

Employee ownership can help companies to retain their independence, reward employees, and enable outgoing shareholders to receive a fair value for their contribution to the development of the company. It also spreads financial risk, as part of employees' income comes from dividends, so automatically adjusts with trading conditions. And because employees share in the profits of the company directly, they are motivated to want to increase those profits.

As well as being used for succession planning, it is also used by some new business as it helps to attract and retain talented people and create a positive culture.

While employee ownership has gained more attention of late, the concept is not new. John Spedan Lewis established the John Lewis Partnership as an employee-owned company in 1929.

Dozens of companies have turned to the model in recent years, including Paye Stonework & Restoration, Buckingham Group, Briggs & Forrester and Readie Construction.