Simon Morray-Jones Architects is a highly regarded firm with expertise in the renovation and remodelling of listed and historic buildings, including numerous properties for the Soho House Group, Andrew Brownsword Hotels and, lately, the Newt in Somerset. Located in Bath, the team works on projects around the country.
First set up by Simon himself over 30 years ago, the business now has a team of 20, and in the late summer of 2019 Simon and his wife Berni decided to explore their options for stepping back from the business, allowing them to spend more time travelling, and with their family.
They were introduced by friends to Mike Norrie and Victoria Ansell of Castle Corporate Finance, who discussed various possible strategies with them, including a sale to an Employee Ownership Trust – a framework that is rapidly gaining traction with professional services businesses, where perhaps a sale to another firm in their sector (possibly a competitor) does not appeal.
An Employee Ownership Trust or “EOT” is a framework whereby the shares in a company are held on trust for its employees, so that each employee can feel part of the business, and can benefit from its future growth and performance: the trust can pay out bonuses of up to £3,600 tax free each year to the employees, and can distribute profits to them as well, and all employees benefit.
For Simon and Berni, this was a perfect solution: they could realise the value for their years of hard work building up the business; and can hand over an efficient and well-run business to their team, remaining on hand for a period of time to smooth that handover, and help train up those who want to take on more active management responsibilities.
“We were delighted to be introduced to Castle, and the advice throughout was superb: pragmatic, helpful, supportive. We have never done anything like this before, but Victoria was there every step of the way: we found her direction so reassuring, clear and personable. She recommended advisers to support on both the tax (BDO) and legal (Outset UK) sides, who were excellent. The whole thing ran so smoothly; Victoria maintained the momentum throughout with awesome efficiency and even during this extraordinary time, she got it over the line!
We are so pleased to leave our business in the hands of our very capable team. I will of course remain as a consultant for as long as they want me, but the future is now in their hands, which is really inspiring” said Simon.
Berni added “we have a great team, and even in the midst of this current environment, they have been very enthusiastic about this opportunity, as we had imagined they would be. We had never heard of an EOT before meeting Mike and Victoria, and certainly could not have done this without them.”
Victoria, director at Castle Corporate Finance, commented: “It was a delight to work with Simon and Berni on this transaction, and to help them work through this transition from business owners to semi-retirement!
I know they will still support the team for a while yet, but they now have the security to make different decisions for themselves, without worrying about not being in the business.
We are seeing many business owners look at the option of an EOT, some of whom look at 0% tax as being the main driver, but it really doesn’t work that way. Simon and Berni embraced this framework as being the right thing for their team, as well as for them, and that gives me a lot of confidence that the business will go from strength to strength.”