News release: Top 50 report shows positive growth for the employee ownership sector
Research continues to show that employee-owned businesses enjoy higher levels of productivity
Publication of the Employee Ownership Association’s (EOA) annual 2018 Top 50 Report shows positive growth for the employee ownership sector, with a combined sales value of nearly £20bn, five new entries to the Top 50 and an almost 10% median increase in operating profits.
The Top 50 list, complied by RM2 in partnership with the EOA, covers independent UK-registered companies that are at least 25% owned by their employees on a broad basis and UK subsidiaries of non-UK companies that are more than 75% employee owned.
Nigel Mason, Director of the RM2 Partnership said:
“It’s been a challenging year for UK businesses, especially for those on the high street, but total sales for companies on this year’s Top 50 list are up 6.5% on a like-for-like* basis – a figure that shows resilience and sustained high growth in the employee owned sector.
“More than 250 businesses including Aardman Animations and Riverford Organic Farmers have transitioned to an EOT since 2014, many of them below the Top 50, which has helped the sector diversify in size. As more businesses realise the benefits of this business model and as we continue our conversations with government about support for employee ownership, we are very confident that the sector will continue to grow.”
2018 has been a particularly interesting year for the EOA as it enjoyed significant attention in the national media, which generated new levels of interest and engagement in the sector. In addition, the three main political parties in the UK directly consulted with the EOA to incorporate elements of employee ownership into their manifestos.
The top findings from the report include:
- £19.8bn combined sales of Top 50 employee-owned companies (up 6.5% on like-for-like basis)
- 9.2% median increase in operation profits
- 7.3% increase in productivity year-on-year (Compared to UK productivity which fell by 0.1% Q1 2017 to Q1 2018)
- 171,000 combined employees (down 1% on a like-for-like basis)
- 54% of companies with no net debt
For the first time in five years, there has been a decrease in the combined sales of the Top 50, because of tough trading conditions in the retail sector – mainly due to the demise of wholesaler Palmer and Harvey. Meanwhile, there was a fall in profits and head count for the Top-50’s number one John Lewis & Partners, which still fared better than many of its high street counterparts.
Deb Oxley, CEO of the Employee Ownership Association, said:
“It is an exciting time for the sector with founders of big British brands such as Riverford, Aardman and Sawday’s choosing employee ownership to secure the future of the business’ values and ethos while rooting the jobs and associated value to the region in the UK indefinitely.
“A tough time for retail this year has had an impact on the total sales of the Top 50 and shows that no business is immune to market pressures. However, like-for-like total sales are up by 6.5%, and our sector has seen a continuing rise in productivity bucking the national trend; findings that only add weight to the evidence and recommendations of the Ownership Dividend. Evidence shows that the independent nature of EO business and the structures they adopt to engage their employees allow for growth over the longer term and have a huge, positive impact on business performance.”
This year The Ownership Dividend report was published. Chaired by Baroness Sharon Bowles, the inquiry Report contains the most comprehensive, robust and compelling evidence about employee ownership in the UK to date, showing how the employee ownership sector can provide the positive solutions needed to face many of the challenges currently facing the UK economy.
The employee-owned sector counts for over £30 billion contribution to UK GDP and is growing by a rate of 10% a year. Despite this, the sector’s profile is comparatively low and its potential contribution to the economy is under-exploited as a result.
Coinciding with the release of the Top 50 Report, the Employee Ownership Annual Conference, the flagship event for employee ownership, will welcome over 700 delegates to the Hilton Birmingham Metropole NEC on the 19th and 20th November. The event celebrates business excellence in employee ownership with a variety of networking session, seminars and workshops taking place.
Keynote speakers include Andy Street, Mayor of the West Midlands, and former MD of John Lewis Partnership, Alastair Sawday, founder of Sawday’s, who has recently taken his business into employee ownership, and Chris McDermott, MD of Cambridge Weight Plan, who will talk about the business’ journey to financial freedom and beyond.
To view the full findings of the Employee Ownership Top 50 Report, please visit https://employeeownership.co.uk/wp-content/uploads/Employee-Ownership-Top-50-2018.pdf
*Like-for-like means that each of the 50 companies on the list are compared against their own prior year results