Staff will take over a £20million civil engineering business created from a kitchen table

The Tayside-based entrepreneur, Kilmac, is placed in an Employee Ownership Trust (EOT) by founders Athole McDonald and Richard Kilcullen 18 years after setting up the business from a kitchen table.

He has achieved an annual turnover of £20m and has worked on major projects including the transformation of Perth Town Hall and the latest development phase of the James Hutton Institute in Dundee.

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Civil engineers Mr McDonald and Mr Kilcullen, who met at the Dundee Institute of Technology, intend to remain with the company for at least the next three years before handing over. Mr McDonald said the move was a positive development for the company and its staff.

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He said: “We could have found a buyer for the business, but we have an experienced and talented team who are more than capable of taking the reins over the next few years. The structure is being created to move the business forward, bring clarity to our staff and customers, and avoid unnecessary disruption.

“By creating an EOT, Kilmac will be in the safe hands of our excellent management team. This ensures that the company will continue to provide stability for our customers and job security for our employees.

The process was supported by Azets accountants, legal advisers Thorntons Solicitors and employee ownership specialists Ownership Associates.

Kilmac directors Athole McDonald (left) and Richard Kilcullen are to hand over control of the business to their staff. Photo: Perthshire Photo Agency.

Carole Leslie of Ownership Associates said the employee ownership business model is an attractive option for business owners who want to preserve their legacy while protecting the future of the employees who helped shape the business.

“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 ‘a business they started on a kitchen table will continue to thrive and provide rewarding jobs for over 100 employees,’ she said.

Kilmac acts as prime contractor for local authorities, universities, local health services, road network authorities and private clients.

From an annual turnover of around £800,000 in the first year, by 2018 Kilmac had achieved revenues of £10 million. The company’s forthcoming financial results will show profits of £1.3m on sales of £20m.

There are now over 170 employee-owned businesses operating in Scotland, and over 120 of these are headquartered in Scotland.

Statistics show that employee-owned businesses consistently outperform other ownership models in terms of profitability, productivity through higher levels of engagement and better employee well-being, as well as improved resilience companies in times of economic crisis, including the Covid-19 pandemic.

Last month Glasgow-based digital agency Spider Online also became employee-owned. Founded by John Campbell and Tony O’Grady in 2004, Spider Online is a digital agency specializing in the delivery of websites and applications, serving government, transportation and HR clients. Clients include FirstGroup, Tesco Bank, Cosla, Audit Scotland, National Transport Authority Ireland, Imperial College London and Bristol Airport.

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