By Ian McConnell
INVERNESS-based Carlton Bingo, which employs 209 people and has 10 venues around Scotland, is moving into employee ownership following a “positive rebound” from the impact of extended closures amid the coronavirus pandemic.
Ownership Associates, one of the advisers on the deal, said that the bingo company had become Scotland’s “largest employee-owned firm”.
The four major shareholders, Chris Barr, George Carter, Brian King and Peter Perrins, decided to transition the business into employee ownership after considering their succession options and “acknowledging their staff’s loyalty and commitment”, according to Ownership Associates.
Asked about the basis for its calculation that the company had become the largest employee-owned firm in Scotland, the adviser replied: “Carlton Bingo is the largest in terms of employee numbers at the time of transition – [the] largest employee takeover.”
Carlton Bingo, which has venues in Inverness, Stirling, Livingston, Dunfermline, Buckie, Elgin, Fraserburgh, Dalkeith, East Kilbride, and Partick in Glasgow, is said by Ownership Associates to have achieved a “positive rebound after the challenges and closures brought about by the pandemic”.
Several venues are trading ahead of their pre-pandemic performances in 2019.
Accounts filed with Companies House show Carlton Bingo made a pre-tax profit of £1.76 million on turnover of £14.4m in the year to March 2020. In the year to March 28, 2021, during which the venues were open for an average of only 70 days, Carlton Bingo made a pre-tax loss of £3.39m before exceptional items on turnover of £2.06m.
In their strategic report on the accounts for the 12 months to March 2021, the directors said that the group had “regrettably…made the decision to close the Dumbarton premises during the year as trading was not viable at the premises under continued restrictions”.
They added: “Similarly, the group was forced into reducing staff numbers to ensure viability at the significantly lower level of trading and in advance of the anticipated end of furlough at 31st October 2020. Furlough was then extended at the last minute from 1st November 2020.”
The company, which has its headquarters in its original home town of Inverness and has an operations office in Stirling, has now put its shares into an employee ownership trust, which gives staff a controlling stake in the business.
Mr Carter said: “It might sound like a cliché but we are very much like a family business here. The sale to an EOT fitted exactly with what we wanted. We have to wait a few years to realise our full value, but we judged that to be a risk worth taking to preserve all that’s good about Carlton for our customers and our staff. A management buyout was a real possibility – our management team are hugely respected within the business – but that really only defers the problem of succession. By transferring the shareholding to an EOT, the future of Carlton Bingo is secure for our loyal staff and customers.”
Managing director Mike Watret said: “We have recovered well from what was a challenging time. Eight of our 10 locations exceeded their targets for March and several are outperforming their 2019 results. This is testament to the hard work and loyalty of our staff, who have done a sterling job in ensuring a safe and welcoming environment for our customers.”
He added: “If I had any doubts that this was the right way forward, they were banished when we delivered the news to the employees. There are challenges ahead, but with our great team here I’m confident that we’ll overcome them.”
Finance director Leslie Ross, who has worked at Carlton for nearly 30 years, highlighted the length of service dedicated to the bingo group by many of the employees, declaring: “The combined company length of service stands at over 1,500 years. We recently celebrated a 40-year service anniversary for one employee in Dunfermline. Carlton has a great culture that fosters commitment and long service.”
Carole Leslie of Ownership Associates, who worked with Carlton’s directors on the programme of employee communication, said: “It was a fabulous experience meeting so many employees who are so loyal to their company and genuinely enjoy their jobs.
“The idea of employee ownership was largely unknown by most of the staff but, once explained, was recognised as a generous gesture by the former shareholders.”
Douglas Roberts, a partner at legal adviser Lindsays, said: “We were delighted to assist the team at Carlton Bingo in what is a significant step for EOTs in Scotland. It’s encouraging to see a company of the scale of Carlton Bingo adopting employee ownership, proving it’s an option that fits with businesses of all sizes.”