Moving a coach or bus operation fully or partly into an employee ownership trust is gaining traction. At least four such transfers have taken place since 2020: Creigiau Travel, Shuttle Buses, Stephensons of Essex, and now Berrys Coaches. There may be more. Others have held that status for longer, Alfa Travel among them.
The structure of an employee ownership trust is clear; shares are held in trust and do not become the ‘property’ of staff, although dividends are forthcoming once the previous owners have been paid out of profits.
Capital gains tax relief (at least for now) is no doubt an attractive part of the transfer to an employee ownership trust, and as Creigiau Travel has previously explained, taking that route can be attractive when retirement nears and release of funds is desirable.
The age-old matter of succession planning is also highlighted by at least one of the coach and bus operators that have transitioned to an employee ownership trust in recent years.
Many independent coach and bus businesses execute succession planning that maintains a steady ship; such names roll off the tongue, as do those where the next generation has enabled the company to push on and develop further. Employee ownership sits alongside that in some instances.
But others have not been in that position. Around 10 years ago, a string of disastrous sales to a long-defunct Midlands buyer that also supplied new coaches showed what can happen in the worst of cases, and disposal to a large group is not for everyone. Moves on a ‘coaching cooperative’ look likely to increase options in that field, however.
The succession planning piece warrants extensive examination of its own, but fears that few young people want to enter the industry are overblown.
In celebrating its 40th anniversary this year, the Guild of British Coach operators, a highly exclusive organisation, notes how younger leaders from among its members have been looking towards the next four decades.
Up-and-comers are in no short supply elsewhere across the sector. Arguably, it will become a more attractive career choice as social and environmental awareness continues to build among those leaving education.
The employee ownership trust approach is cited as having benefits to succession in how it engenders belonging and pride among staff. Dividends (once they come) without having to put up capital in the first place will always be a strong incentive to remain with an employer.
The natural conclusion to be drawn there is that staff will stay around for longer, giving greater scope to mould them into the leaders of tomorrow. And a stable workforce with no revolving door means a stable business that is well placed to seize opportunities.
Deciphering the almost innumerable factors that influence employee ownership and how it might or might not work for an organisation and its current owners is no doubt a long-term task that requires huge care.
But the operators that have chosen it are mature businesses that are unlikely to rush into something without the necessary due diligence. Perhaps Berrys will not be the last coach or bus business to announce its transition into an employee ownership trust.
