Nursery group converts to employee ownership

Nursery founders Paul and Sam Graveling have sold 70 per cent of their shares in the group, which has five settings, to an Employee Ownership Trust through cash reserves and a loan. Employees did not have to buy any shares, but they now effectively own the majority of the company.

The nurseries are all based in Leicestershire and offer more than 330 places across the group.

Lilliput Montessori Day Nurseries was launched in 1994 when Mr and Mrs Graveling could not find a suitable nursery for their child. They have decided to transition the business as part of their future retirement plans and to support their 100-strong workforce.

‘Having so many long-serving employees, our company has a family feel to it and we were reluctant to sell to a third party in case it destroyed that,’ said Mr Graveling.

‘It’s important that everyone benefits financially from the success of the company. We wanted the loan repaid over a short time but the repayments were quite a drain, so we decided to refinance and free-up cash so that more could be distributed to our employees.’

The nursery group worked with Unity Trust Bank to gain the new loan. Relationship manager at Unity Trust Bank Andy Ball commented that employee ownership can assist in a company’s profitability as well as producing an engaged and loyal workforce.

Childbase Partership was the first nursery group in the UK to become employee owned after staff voted for the move in 2017. It now owns 43 nurseries and is listed in The Sunday Times’ 25 Best Big Companies to Work For 2020.

Deb Oxley, chief executive of the Employee Ownership Association, said, ‘Businesses that give employees a stake and a say sustain their values and independence for the longer term by making employees custodians of the business for future generations.

‘This leaves the business in a better position to flex, innovate and adapt – key qualities for the UK to be able to Build Back Better.’