Stephensons enters employee ownership

30/10/2024 Ashleigh Sinclair Features, News Focus

The first vehicle in a batch of five delivered in 2024 is 801 – EU24 LWT. Unlike many operators, Stephensons vehicles continue to be allocated local Essex registrations, perhaps an indicator of the pride with which the company serves communities across the county. MARK PITMAN

Two well-known names have a bright future ahead as part of an Employee Owned Trust, reports David Jordan

On Sunday 27 October, the sale was completed of Eastern Transport Holdings Ltd, the parent company that owns both Stephensons of Essex and NIBS Buses, from its founder and sole shareholder, Bill Hiron, to an Employee Ownership Trust (EOT).

Sometimes referred to as the ‘John Lewis model,’ this relatively new form of company ownership was introduced by the Government as recently as 2014, with the aim of enabling both increased employee engagement within firms and the owners of businesses, who rightly wish to realise some of the fruits of their endeavours, to fully or partially exit as an alternative to the more traditional route of selling to a third party. And whilst post-deregulation employee buyouts of bus operating companies were fairly common, it is believed that this may well be the only such current example within the industry in England and certainly for a company of this size.

Unlike an employee or management buyout, sale to an EOT removes some of the personal risks associated with either individual or collective ownership, with the newly formed EOT holding all shares in the company on behalf of the employees who are then its direct beneficiaries. And, whilst the EOT becomes the sole shareholder, it is not involved in the day to day running of the business; in this case with the composition of the Eastern Transport Holdings Ltd board remaining almost entirely as it currently stands. The EOT will be operated by a trust company which will have a board of at least three directors (which at outset will comprise Bill Hiron as the shareholder representative, an employee representative and an objective independent professional not previously affiliated with the company). The trust company can choose to make tax-free bonus payments of up to £3,600 per annum per employee (subject to a minimum period of employment) founded upon any profits generated and future investment considerations.

So, with such a fundamental and exciting change now underway at this highly-regarded and sizeable East Anglian independent, I was delighted that the company’s former owner and well-known industry leader, Bill Hiron MBE, chose to share the story exclusively with CBW of how this change in circumstances came about, and explain how he is convinced that the sale to an EOT is by far the best way to ensure that the group continues to enjoy the same success that it has since he bought the original Stephensons of Rochford business in 2001.