Excursions Ltd works with over twenty of the world’s top cruise lines, designing and delivering onshore excursions and memorable experiences for their guests throughout the UK.
Founded by husband-and-wife team Rupert and Anna Woodard in 1999, the business became an Employee Ownership Trust (EOT) in 2021, providing long term job security for the staff who helped to make the company so successful.
We caught up with founder Rupert and asked him about his experience of the EOT process.
Tell us a little bit about how Excursions Ltd began.
Anna and I started the company from scratch in 1999 following a redundancy. We identified a specific niche in the cruise tourism market and grew methodically, gradually adding new clients over the years. Eventually we became the market leader in our chosen sector, operating excursions in every UK port for our valued cruise line clients.
Fast forward 20 years! At an event we organised to celebrate the 20th anniversary of the company several team members asked me what was going to happen to the business when we retired. It was very thought provoking. We began looking to the future and our succession plans. We had previously toyed with the idea of selling, but we held off as we did not want an unscrupulous organisation to potentially strip the business, change the ethos, and get rid of our wonderful loyal staff.
What made you consider selling the business to an Employee Ownership Trust?
A friend who had been through the EOT process with Hazlewoods recommended it. He said it had been a fabulous success, a way of creating a legacy and was a practical way for business owners to exit. It sounded too good to be true and I contacted Hazlewoods.
How long did the EOT process take?
We started talking to Rich Grover [Hazlewoods Corporate Finance Director] and Tom Woodcock [Tax Partner] in November 2020 and we completed in March 2021, so four months.
What was your experience of working with Hazlewoods?
Your team were very slick and made the process exceptionally smooth. Everyone was straightforward to deal with and everything was clearly explained. We were given a lot of support and the opportunity to revisit and review anything that we wanted to. We engaged Hazlewoods as our accountants and tax advisers after the EOT was set up.
Were there any challenges?
When we first started the EOT process we were in the middle of the pandemic. Our trade had stopped dead overnight, and we had to use the reserves carefully built up within the company over many years to keep the business afloat. It was a massive gamble as we did not know when (or if) we would be able to trade again. It made valuing the business difficult and the focus had to be on our historical trading figures and coming up with a fair and reasonable formula, which fortunately was accepted by HMCR. There was an enormous amount of paperwork – I think we signed 70 forms.
What happened after the deal completed?
We slowly came out of Covid and set about rebuilding the business. It was bumpy initially, with all sorts of restrictions, but the business survived and has now bounced back significantly. I am still the Managing Director, but the senior management team now effectively run the business and come to me for advice and support.
When you become an EOT you must have a board of trustees to oversee the running of the business – Anna is a trustee, as is an employee of the business. Our independent trustee was the partner of the person who first told me about their EOT success.
How did your staff react to ‘owning’ the business?
They became incredibly energised. There was a spring in everyone’s step. They became more engaged, paid more attention than ever, and wanted to make sure all of our guests were very well looked after. They came up with lot of ideas regarding new products and how to better serve our clients.
What is the upside for them?
Employees have job security, a say in how the business is run, and the security of knowing that the ethos of the business will always be the same.
Since becoming an EOT we have also set up an excellent profit-sharing scheme. An EOT is allowed to give each employee a £3,600 bonus each year tax free. Our bonuses are generally higher than that, but it is good that this initial element is tax free and gives them a bit extra in their pocket.
Were there any hiccups?
The toughest part was getting the business back on its feet after Covid. Also, it was a big change for the Senior Management Team as I gradually handed over my day-to-day responsibilities to ensure a smooth exit. However, everyone responded well and with great energy and enthusiasm.
What would you say to anyone thinking of selling their business to an EOT?
Do it! It has been such a positive experience for us and our employees. I have recommended it to half a dozen people I know. It leaves a legacy and secures the future of the business for its employees and future generations.
Any words of advice?
If you are a small business, think about the costs associated with the transaction, for example legal fees, and do not expect to take a large amount of money out of the business straight away. Our situation was unusual in that we were in the middle of a pandemic and could not operate, but Anna and I took £1 on completion in March 2021 to make it a legal transaction. We did not start drawing money out of the business until July 2022 as we wanted to ensure that it was on a steady footing. The company is now in a stable financial position and are looking forward to slipping further into the background knowing that the business is in capable hands.
Thoughts of Hazlewoods Director, Rich Grover, who worked on the transaction.
“It was an absolute pleasure to work with Rupert and Anna and I am delighted that selling their business to an EOT has been such a success.
An EOT is a tax-efficient way of taking the full market value of the business (based on an independent valuation) as you pay zero capital gains tax on the proceeds of the sale. It also removes the uncertainty associated with a sale to a competitor or investor.
As can be seen with Excursions Ltd, there is evidence that businesses which are placed into an EOT experience increased productivity and growth; with fulfilled and engaged staff who are motivated to achieve success.”
If you would like to find out more about selling your business to an EOT or any other exit route, please get in touch with a key contact below.
