Boldon-based, HLA Group, a leading North East provider of full mechanical, heating, air conditioning, ventilation, LEV, Plumbing, water hygiene, electrical and facilities services, has appointed new leadership team members.
To coincide with the new structure and to reflect the company’s wide and specialist services capability, it has also been renamed from HLA Services to HLA Group.
11, long-standing employees have become additional shareholders, marking an important step in the company’s journey to create a sustainable, cooperative, multi-generational, employee-focused, structure.
Paul Smith, who co-founded the business in 2013 alongside Ian Rooks, Neil Henry and John Anson, and who has had sole ownership for the past three years, continues as managing director, alongside Wendy Duffy, finance director.
The new shareholders are Darren Gray, Marcus Thomson, Mark Charlton, Bruce Kirtley, Jonathan Wilson, Michael Oliver, Lee Kirby, Mark Herring, Gary Logan, Steve Grehan and Maxine Charlton. Each receive 6% of the shares in the business, with no external funding required. Paul, still remains the largest shareholder with 24% of the shares and Wendy, who has been with the business since its formation, has 10%.
The company, which celebrated its 20th anniversary in 2023, has transitioned toward a more cooperative, employee structure. Under this new model, the shareholders will receive an earn-out over the next 5-7 years based on the company’s performance. Crucially, shares cannot be transferred outside the business, reinforcing HLA Group’s commitment to its employees and internal opportunity for career progression.
With a headcount of 130, the company, which has satellite offices in Cumbria and a manufacturing hub in Seaham, works across healthcare, construction, manufacturing, retail, hospitality and education, including four of the North East’s five universities.
Paul Smith, said: “We’re moving into a new phase of our journey which we refer to as HLA 2.0. After several flattering and appealing offers by a variety of external suitors to buy the company in the past, I realised our unique brand of in-house services, as well as expertise in local exhaust ventilation and water treatment legionella control, which effectively made us a group of 10 internal businesses, would be a difficult fit for any acquiring company to absorb without the disintegration of the HLA brand and ethos. So, it wasn’t a difficult decision to politely reject the offers and come up with this tailored strategy for the future.
“I gave a lot of thought to a very personally tax-efficient employee ownership trust, where all employees are equal shareholders. That model works well for a company with just a few employees where responsibility is shared equally. However, I didn’t feel there would be enough incentive for the revenue creators and, as such, I believe the structure we have adopted will, ultimately, benefit all of my colleagues by incentivising the revenue creators to make sure there is plenty of work going forward for all staff.
“When myself and the original directors started the business, the only risk we faced was failure. It was important to me that none of the employees who have become shareholders had to finance their buy-in personally. I didn’t want to place any financial or mental burden on them. The new structure allows an earn-out over the next 5-7 years, based on the performance of the business.
“This incentivises them, as department heads or main revenue generators, to drive the business forward and keep it self-sustaining for many years to come. Shares cannot be sold outside of the business and it is my belief that by empowering our team in this way, we are creating a leadership model that reflects our core values and ensures HLA Group continues to thrive in the future.
“As ever, our mission is to provide best-in-class service to our customers and our new leadership model will allow us to further develop our already robust business model and elevate our offering to clients as we continue to grow. The future is bright and our ability to deliver excellence and pivot to meet market demand is unlimited.”