PKF Francis Clark client Suttons Seeds has a remarkable story to tell and it’s not just its 200+ years of providing high quality seeds, bulbs and other horticultural products, nor its royal patronage which dates back to 1858 and still exists today or even its passion for gardening and the unstinting support it gives to both professional and amateur gardeners.
What is remarkable about the Suttons Seeds story is its resilience, its will to survive, adapt and improve and the collective support from all parties that allowed the management team to acquire the business from its multinational owners with incredibly inspiring results.
Suttons Seeds, which was founded in 1806 in Reading, relocated to Torquay in 1976 and on to Paignton 1998, four years after becoming a subsidiary of French multinational cereal business Limagrain. In recent years the business was ailing and losing money and became superfluous to the French owners’ core business.
There was real danger of the business either being sold and moving away from Torbay or even going out of existence. However, in a remarkable deal brokered by PKF Francis Clark corporate finance and Foot Anstey’s legal teams, Suttons was acquired by its management team of David Robinson (now managing director) and operations director Rufus Roberts.
What set this deal apart was the support for the buy-out given by Limagrain who remain an important trading partner for Suttons and by Torbay Council and Torbay Development Authority who facilitated the MBO recognising the importance of the business as a significant employer with an iconic brand. All parties worked hard to make the deal happen in an environment where non-aggressive MBOs are pretty rare.
There were, however, challenges for the new owners, not the least of which was cutting overheads and introducing new products to ensure a financially secure future. At the time of the MBO, David Robinson said: “Suttons have plans to launch innovative and new products, for both our faithful as well as new and budding customers, as we continue to focus on both direct to consumer and retail markets. Suttons is an exceptional household brand widely recognised for quality. Watch this space….innovation is the key”.
And innovation is what they have delivered. Innovation in products, investment in R&D including collaboration with Exeter University, a new range of seeds, plants and branded garden equipment, upgraded software and a new phone system committing £600,000 in capital projects.
They have rationalised their operation, re-racked the warehouse and sub-let 35,000 sq ft of their Paignton facility. Other business developments have included restructuring the way they supply retailers, increasing product shelf-life, the sourcing of new products and investment in PR.
They have also begun recruiting again including taking on celebrity gardener Rob Smith winner of BBC 2’s Big Allotment Challenge who is bringing fresh ideas and has a publicly recognisable face which will help the growing PR and marketing drive. Management is also encouraging staff to move between roles and supports them to work flexible hours
The business’ commitment to corporate social responsibility is manifested in its investment in a rooftop array of solar panels enabling Suttons to be a net energy exporter, the creation of more green space including planting a patch of wild orchids and an environmentally friendly waste disposal policy all of which have also had a positive impact on the bottom line.
The outcome has been a real turnaround for the business. Having leaked as much as £6 million in losses in recent years, Suttons returned to profit in 2015. The lowest wage rate has been increased by 14% since the MBO and a bonus of £250 was paid to all staff at the end of the first year and this was doubled to £500 at the end of year2.
Perhaps most significantly, David and Rufus have created a happier place to work and a positive working environment through their commitment to change, improved communications, listening to employees’ new ideas and suggestions for innovation and by providing the “opportunity to thrive”.
Today Suttons Seeds employs 109 people and turns over c. £13 million with two thirds of the business being direct to consumer through internet and catalogue sales and the rest to retailers. It has plans to grow both organically and by acquisition and intends using PKF Francis Clark specialist M&A expertise at the appropriate time.
David Robinson said: “Our aim has been to create a leaner and fitter operation where we eliminated the parts of the business that weren’t adding value and focussed on the details. It has been a case of simplifying the process – invest in the product and market it well.”
“We started with driving down overheads but in the process of consolidation and rationalisation including the way we pick, package and supply, we were prepared to reduce turnover and sales to increase margins and boost profitability while also benefiting our retail customers, suppliers and employees.”
“We feel we have got through the worst of it all but recognise there remain challenges and a lot of hard work ahead but, with the fantastic support from our staff, we can achieve our ambitions for the business.”
David and Rufus were introduced to PKF Francis Clark’s Corporate Finance team when the MBO was first considered and have since become audit clients of the firm. Mark Greaves and Nick Woodmansey handled the deal negotiations. David Robinson commented “Right back in the summer when this all started it was not at all clear how the deal could be structured in order to give us both the control that we were seeking and the financial backing that the business needed. Now we find ourselves with each of these objectives fully met and we are both very grateful to PKF Francis Clark for that. Mark and his team have been helpful and calm throughout and have made the process as easy for us as it could have been.”
“We subsequently appointed PKF Francis Clark as our auditors and they help prepare our corporation tax returns. On a day to day basis we are looked after by partner Chris Hicks and senior manager James Huxtable.”