Denny Bros prepares to become employee-owned
- Credit: Silver Monkey Marketing
Employees are to be given a stake in the family-owned business they work for as its owners look to safeguard its future.
Labelling and engineering company Denny Bros — which was founded in 1945 by brothers Douglas and Russell — is due to undergo a restructure so the majority of the company is held in trust for the benefit of its workers.
The £8.3m turnover firm — which employs 100 staff and celebrated its 75th year of trading last year — to manage its succession and give certainty to its workers by forming Denny Bros Trustee Ltd.
Meanwhile managing director Graham Denny and his uncle Barry Denny, the son of co-founder Douglas, will retain a minority shareholding.
Graham Denny explained that in the last few years, the family had come to the realisation it needed to develop a long-term plan and address “what is possibility the toughest responsibility for all business owners to deal with — to plan for our own succession”.
“Traditional options such as selling the business did not appeal as we would lose our all-important independence and we worried that new owners might make drastic changes,” he said.
“We pride ourselves on our reputation for innovation and when we discovered the Employee Ownership Trust, it immediately appealed as an innovative way to address the question of succession, giving our staff transparency and reassurance moving forward as well as placing them at the heart of the business.
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“We also think staff will enjoy knowing that they indirectly own the company they are working for – collectively sharing in the success their hard work brings.”
More than 500 UK businesses are Employee Ownership Trusts including retail chain John Lewis. The arrangement means that employees indirectly become the owners.
Denny Bros Group comprises a diverse set of 11 companies, but is best known for its innovative printed products notably its Fix-A-Form booklet labels. Other activities include engineering, tool and die making, signs and nameplates, conference facilities, property management and machinery sales.
Group chairman Barry Denny said: “Denny Bros has made its name as a world-leader on the quality of the company’s in-house expertise – an achievement that would have been impossible without the contribution of our employees.
“We believe employee ownership allows for the greatest degree of continuity, stability and resilience among all the possible options we considered.
“We have ambitious plans to deliver further growth and I look forward to this new model helping us achieve this.”
Denny Bros Group’s restructuring was supported by law firm Birketts and specialist business advisory firm FRP.
Lisa Hayward, head of employee incentives at Birketts, said: “In the wake of a highly uncertain year, employee ownership continues to be an attractive option for businesses across the country who wish to protect their legacy.
“By offering the very people that built the company a stake in its future, Employee Ownership Trust arrangements facilitate increased employee wellbeing and in turn, higher job satisfaction and an increase in collaborative behaviours.
“A model like this works well for a highly respected and trusted company like Denny Bros, appealing to the values of a modern workforce without compelling them to compromise on their cultural values.”
Dave Howes, corporate finance partner at FRP, said: “This deal represents an important milestone in the long-standing history of The Denny Bros Group and means its future will remain in the hands of its employees for decades to come.
“Employee ownership trusts have risen in prominence in recent years as business owners continue to plan sustainable, long-term exit strategies that add stability to already successful business models.
“Combined with attractive tax rates, the enhanced benefits for employees mean that the approach should continue to gather pace among SME and family-owned organisations where the ability to leave a positive and lasting legacy is so important.”