Tayside civils business moves to employee ownership model

Athole McDonald and Richard Kilcullen

A Tayside civil engineering contractor is adopting employee ownership in a move described as ‘guaranteeing’ the future of 130 jobs.

Kilmac Limited is being placed in an Employee Ownership Trust (EOT) by its founders Athole McDonald and Richard Kilcullen, 18 years after the company was founded.

With an annual turnover of £20 million, Kilmac’s current projects include the transformation of Perth City Hall and the latest development phase of the James Hutton Institute in Dundee.

The process of moving the business into employee ownership has been supported by Kilmac’s accountants Azets, legal advisors Thorntons Solicitors, and employee ownership specialists Ownership Associates.

Owners Athole and Richard, both civil engineers who started the business in 2004 after meeting earlier at Dundee Institute of Technology, plan to remain in place for at least the next three years.

Athole McDonald said, “We have to look to the future and by creating an EOT, Kilmac will be in the safe hands of our excellent senior management team. It’s good news for Tayside, with the vast majority of our staff living in Dundee, Perthshire and Fife, and it ensures the company will continue to provide stability for our customers and job security for our employees.”

Kilmac acts as a main contractor for local authorities, universities, local health services, road network authorities, council direct labour organisations and private clients.

From a first-year turnover of around £800,000, by 2018 Kilmac had achieved revenues of £10 million, and with a strategy of expanding its operational footprint beyond its traditional Tayside heartland, the company’s next financial results will show profits of £1.3 million on a £20 million turnover.

Athole added, “We have come a long way from the days when our biggest headache was getting the photocopier to work and stop the kitchen worktop being covered in ink. We knew what we wanted to deliver and have remained true to our principles. We could have found a buyer for the business but we have an experienced and talented team who are more than capable of taking on the reins over the next few years. The structure is being created to take the business forward, provide clarity to our staff and customers and to avoid unnecessary disruption.”

Carole Leslie of Ownership Associates provided employee ownership support for the project and assisted on communication with the new employee owners and other stakeholders. Carole said, “The employee ownership business model is an excellent succession option for business owners who want to persevere their legacy while protecting the future of their employees who have helped shape the company.

“Under the ownership of Athole McDonald and Richard Kilcullen, Kilmac is well-established as one of the most successful and forward-looking civil engineering businesses in Scotland, and by opting for an EOT they have ensured that an enterprise they started over a kitchen table will continue to thrive, and to provide rewarding employment for more than 100 staff.”

Kilmac joins a number of other local businesses that have opted for an employee ownership trust structure.

Finance manager Julie Scobie said, “Kilmac has always felt like a big family and it’s comforting for everyone to know that Athole and Richard have full confidence in their staff to be able to hand the legacy of their company into employee ownership as they navigate their next steps.”