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Edward Atkin -

Atkin, 63, is the man behind the Suffolk-based Avent baby feeding products company, sold for £300m. The Atkin stake was worth about £212m, and we value the family at last year’s figure to allow for tax and reinvestment.




FEATURE: Cover Story - I'll have what Edward Atkin & Celia Atkin are having

by Real Business - Thursday, 30th August 2007

Most entrepreneurs feel a sense of loss when they sell their business, especially when they’ve put 40 years of loving service into turning a small family firm into a global consumer brand.

And sure enough, in June this year, just days after completing the £300m sale of Cannon Avent to private equity firm Charterhouse, Edward Atkin saw one of his former company’s baby bottles in his local Hampstead Tesco. “I felt terrible. It was like seeing a baby again whom you’d put up for adoption.” But for this proud British manufacturer, the feelings ran deeper than mere nostalgia.

“I could write a whole book on why I am doing as I am doing,” says Atkin, who raked in a £225m windfall for him and wife Celia. “But if all the trends of the last five years are extrapolated for the next five, where will UK manufacturing be? If the state continues both to proscribe and prescribe, where does that leave an entrepreneur who only trusts his own judgment?”

The agonised questions-cum-challenges are typical of one of the most principled, passionate and deep-thinking entrepreneurs of recent history. Shortlisted for the Entrepreneurs’ Entrepreneur category at this year’s Growing Business Awards, he stands easily alongside another of the candidates, James Dyson, for his eloquence.

The Cannon Rubber Manufacturers was founded by Edward’s father David, the son of Latvian immigrants, in north London in the thirties. The original business made hot-water bottles in a factory built to manufacture billiard cues (hence the name, Cannon).

Edward joined in 1965, and over the next 40 years, he transformed it into a state-of-the-art manufacturer with exports accounting for 80 per cent of its £109m-sales (almost half of them from the US).

He was always an innovator, importing production techniques from Japan in the sixties and experimenting with Asian manufacturing in the seventies. And despite the sale, Edward is still optimistic about British manufacturing. “If you can keep your direct labour costs low, you can do what you like, where you like,” he insists. At Avent, these are only five per cent of overall costs; in each bottle’s 15 minutes in production, no human hand touches the product. At that level of automation, says Atkin, manufacturing in the UK has a real future.

Edward also obsesses about design excellence. Sheer, purist, never-accept-good-enough engineering quality lies at the heart of Avent. And it’s clear in all of its products how seriously Atkin takes his responsibility to the customer, as this ashen-faced new parent can attest after getting through the torture of breast feeding.

Its factory, Glemsford, is among the finest, most beautiful and efficient manufacturing plants in the world, with probably the highest density of robotics anywhere in the UK. Its architect, Keith Priest, is an unashamed fan: “The British economy needs thousands of Edward Atkins to invigorate this island. He’s a Victorian entrepreneur in the 21st century. He’s got energy, innovation and application, he’s not afraid of technology and always aims for the highest standards.” (During the construction of Glemsford, Edward Atkin regularly chastised Priest for arriving on-site in his family Mercedes: “You should drive a Porsche,” he would growl. “Much better engineered.”)

Just as Edward’s parents had complementary genes – his mother, Klari, was the Czech daughter of successful raincoat manufacturers – so Edward and his wife Celia are a business partnership made in heaven. Edward is the intense, driven tinkerer, able to identify the need for a better product and envisage the solution, from production requirements right through to shelf price. Celia, by contrast, is the creative, salesy feminist, whose determination to have a career and raise children – and ability to articulate all those inherent challenges, including feeding problems with her own first child – was behind the creation of a brand that speaks sympathetically to mothers all over the world. In fact, the team at Avent has done as much as anyone to empower working women. Remember, until the arrival of the Cannon Babysafe bottle, the only options for mothers struggling with breastfeeding were hard, narrow teats usually stretched over milk bottles.

By creating the squat bottle, perfecting the teat’s liquid silicone rubber moulding, and creating much of the paraphernalia of modern parenting, the Atkins, along with Beth Christie (now CEO) and overseas sales director Giovanna Latimer, should be judged by history as true social pioneers.

In some ways, the sale of Cannon Avent was a no-brainer. Edward Atkin turned 60 this year; he knew he had a buyer (Malcolm Offord at Charterhouse had invested ?5m in 1994 while at 3i, and the two men had stayed in touch); the business was in fine shape; Celia was keen to devote more time to new projects; scarred by an ownership dispute with his brother Robert, Edward would never countenance passing the business on to his children; he certainly wouldn’t have shifted manufacturing overseas; and, let’s face it, the price wasn’t bad. But the real tipping point was a Today programme interview one Monday morning in February.

“Celia and I had had a fantastic week in the Caribbean, celebrating our wedding anniversary,” Edward recalls. “We got back on a cold, damp Sunday night to be greeted by nose-to-tail traffic on the North Circular.

“The next morning, I woke up to Patricia Hewitt (then trade secretary) telling me how much my business would benefit from offering 12 rather than nine months’ maternity leave.

“It finally made me crack. We employ a lot of extremely talented women, in very senior positions, but this maternity leave is no joke. To believe that it will benefit my business is Alice in Wonderland stuff.”

Edward Atkin is no moaner. Beneath the strong opinions is a generous, thoughtful, sometimes exasperated entrepreneur who hates to see talent and innovation stifled by here-today-gone-tomorrow politicians and regulators.

So, that day, with the support of his wife, Edward made the call. Within a few minutes, he had a deal with Offord. Within four months, the details had been nailed and a new chapter was opening. First stop, a holiday. A long one. “We deliberately spent eight weeks away,” says Edward. “When you’re away that long, you really do lose touch with the business. Even if I wanted to, I couldn’t get back in the loop now.”

The cash was one of the biggest individual gains from such a buyout. Both describe it as an “onerous responsibility.” Celia: “Beforehand, the money was inside the company being used fruitfully to employ people, delighting women and contributing to GDP. Now we must deploy it to make the world a better place.” For her, that means supporting and campaigning for NOFAS, a charity that highlights the dangers of drinking alcohol during pregnancy. As a one-time impresario (in 1981, she wrote and staged a feminist West End musical called I’m Getting My Act Together and Taking it on the Road), she also plans to back young theatre producers and directors.

As for Edward, he recently gave a speech to the MBA students of London Business School. While the world (and airport bookshops) are hardly short of “top tips for success”, Atkin’s are pure gold. There’s not room to print them all, but here are my favourites. First, “by far and away the most important point about business”: “You must be passionate about your product or service. If you do not really believe what you are offering is the best in the world, then it is most unlikely that anyone else will. Only make or sell what you yourself would want to buy or use and never, ever use the phrase ‘good enough’.”

And his final, life-saving tip is on funding: “Only try to raise money when you can walk away if the terms are not right. This is the only way you will be offered anything like fair terms. When borrowing money, don’t ever put your house on the line or give personal guarantees. Whether you live in a flat in the East End or a mansion in Holland Park, personal guarantees are simply not needed. Remember, it’s far easier for a bank to repossess a house than close down a business.”

Caspian Publishing group editor Matthew Rock is a former editor of Real Business. Caspian Publishing group editor Matthew Rock is a former editor of Real Business.




Blood brothers - Edward Atkin

by Real Business - Thursday, 30th August 2007


We start with the amazing (and rather sad) tale of one world-beating UK family firm...

Edward Atkin has done his old man proud. Cannon Avent, the company founded by his father 65 years ago, is currently worth at least £100m*. Last year, group turnover was up by 20 per cent to £73.7m, while operating profits rose by a similar percentage to £11.4m, making Cannon Avent one of the UK's fastest-growing companies profitswise**. According to our own research, it's among Britain's family-business elite (see our list below). The icing on the cake was not one but two Queen's Awards for Enterprise.

But the dynasty won't extend to a third generation. "I don't want my children to come into the company, period," says Cannon Avent's managing director, 56-year-old Edward Atkin. "I really don't think commerce should necessarily be handed down from one generation to the next." Why? Because it isn't fair to load parents' expectations on children's shoulders, says Atkin. And the odds of finding a child with the same qualities as that parent are, in his opinion, pretty low.

"I have a little personal Atkin law of heredity," he says. "In every generation there is a 10-1 chance of the next person being suitable to do what the previous generation did. So, if you take from my father to myself as a 10-1 chance, if you go from my father to my son, you're talking a 100-1 chance. And, if the company was in the family for four generations, it would literally be a 1,000-1 chance that there would be four people in line, all of whom were as good as the first person who started the business in the first place."

Events have proved this theory true, claims Atkin: "My father had lots of entrepreneurial friends, all of whom had their own business and most of whom left it to their sons. And I think there's me and one other that are still running them out of about 20."

Edward Atkin lives every day with the memory of a bitter power struggle that he fought and won in the late eighties. When his father died suddenly in 1972, the company passed to Atkin and his brother, Robert, in equal shares. The two decided Edward should take responsibility for running the manufacturing operation; Robert would handle sales.

The business ran moderately well for around ten years, says Atkin, but then "sterling went up to unprecedented levels very quickly in the early eighties and we started falling out among ourselves. It was my fault because I couldn't make the stuff cheap enough and it was his fault because he couldn't sell the stuff."

The brothers did try to resolve their arguments by introducing a non-executive chairman and bringing in the company's accountants to adjudicate on disputes. No luck. The dispute became increasingly bitter and would have ended up in court, but for a settlement that saw Robert sell his shares to Edward. The two brothers have not spoken since.

This year is shaping up as another record year for Cannon Avent. First-quarter sales were more than 40 per cent up on the same period in 2000. Atkin, however, isn't in favour of working with family. "There are lots of family firms and they've almost all succumbed to problems of that ilk," he says. "I would advise everybody never, ever, ever to get involved with family in business if they can avoid it. And the worst of all is for the various members of the family to have parity, to have stand-off, in terms of shareholding. If there are ever people who are considering anything, I would say give one 60 per cent and the other 40 per cent and make it up with property or something. Never have a 50-50 stand-off."

Everything must change
Atkin absolutely refuses to consider passing on the reins of management to his children. Yet he disproves his own "law of heredity". He has managed to fill his father's shoes, why couldn't one of his children fill his?

Put simply, Atkin is going to be a much tougher act to follow than his dad. Cannon Avent's managing director hasn't simply built on his father's legacy; he's reinvented the company.

Back in 1936 The Cannon Rubber Manufacturers Limited had started off making hot water bottles. But by 1965, when Edward first got involved in the business, it had diversified into a myriad of rubber products, including bottle teats, bathing hats, car mats, shoe soles, household products and toys. Looking to carve out a niche of his own within the company, Edward took an interest in plastics and started making bottles to go with the rubber teats.

The loss of the founder in 1972 proved a catalyst for change. "After my father died, the only things that I wanted to do were the car mats, because I liked cars, and the baby products, because I was involved in the plastics," says Atkin. "Gradually, we dropped all the other bits and pieces."

Ten years later came the birth of Atkin's son. This had a profound effect on the company. "For the first time, I started actually using the baby products we made and I realised they left an awful lot to be desired. It was that first-hand experience that completely changed everything, because then I went back to the drawing board and, with a clean sheet of paper, started to design the right sort of things for feeding babies."

Quality and focus have been central. Cannon Avent's baby products have grabbed a 40 per cent market share in the UK - almost triple that of its nearest rival - and have broken into a string of foreign markets. (Some 62 per cent of Avent sales are now made outside Europe, the US providing the biggest slice with 42 per cent.)

"We have relatively few products, which we keep improving all the time," says Atkin. "I would liken it to what Rolex do or BMW do: they stick to their last and they just make it better and better and better all the time. And they spend a reasonable amount of money informing the public why it's better and why people should be prepared to pay a premium for the product."

As for his main rivals, they "tend to bring out new stuff and then throw all the old away. They never actually get to make any of their products any better. They used to rely on a lot of character merchandising and things that take away from the inherent quality of the product and the brand. They just confuse the customer."

"Business is terribly simple and people who try to make it complicated are missing the main point," says Atkin. "If you just make the best product you know how to make, everything else looks after itself, because the costings will always come right in the long term as the volumes grow. We make everything up ourselves. We don't farm out manufacturing. So, as we become more successful, the volumes grow, we put more automation in and more mass production. We can afford finer tolerances and better-quality machines and better-quality tooling and better-quality everything, so the quality gets better again. The costs come down, we can spend more money on marketing, we sell more, the costs come down even more and so on. So it's a virtuous circle."

Bringing in outsiders
Atkin has invested heavily in a new factory building in Suffolk. "The bare bones," says Atkin, "was about £10m, which was the factory, the services, the installation of the first batch of machinery. By the time it's finished, it will have absorbed at least £20m."

That sum will come principally from retained earnings; Cannon Avent's gearing is just 21 per cent. Atkin is no fan of big borrowings - the company struggled in the early nineties when it was hocked to the rafters. This was not through choice, however: Atkin had been obliged to turn to a lender when the venture capital deal that was supposed to finance the purchase of his brother's shares fell through because the venture capital company tried to renegotiate the deal at the eleventh hour.

At the time, the high gearing didn't seem a problem. "Interest rates were seven or eight per cent, so you could imagine paying back a large amount of money and paying the interest as well," remembers Atkin. "But no sooner had we paid the money over to my brother than interest rates went up to 15 per cent, or something like that, and the whole world fell apart. Had I known then what I subsequently became aware of in the two or three years after that, I might have been rather more reluctant to say no to the venture capital company."

Cannon Avent managed to pull through. And it was from a position of genuine strength that Atkin negotiated a new - and much improved - venture capital deal in 1994 that saw 3i take a 22 per cent stake. The company hasn't looked back since. "We wiped out the gearing and that meant we could really start motoring," says Atkin. "We could then start to take greater risks and expand into more markets and more of everything else and that's really when the whole thing took off."

Atkin may have had his fingers burned, but he's a strong advocate of venture capital. "I would definitely recommend people who don't even need venture capital to consider getting it in, because it brings in disciplines that most family businesses ought to have," he says. With venture capital on board, "you're responsible for other people's money as well as your own and you can't be so self-indulgent."

Atkin dismisses the idea that VCs just want to control companies. "That's just an excuse for people who actually didn't live up to what they said they were going to be able to do," he says. "On the whole, venture capitalists don't want to do anything they don't have to. In the end, they just want to sit around and take the cheque."

That said, Atkin cautions extreme vigilance when negotiating with venture capitalists. Most people looking for venture capital tend to be "virgins and they all get fleeced as a result," he says. "It really pays to have done a couple of deals beforehand... Otherwise, it's a very, very one-sided playing field." Just as important, "You mustn't do the deal when you're desperate for the money. You've got to do it on the basis that you can walk away."

This should be another record year for Cannon Avent. But Atkin has fears for the future. "The education system in England - and it has been so for the last 30 or 40 years - is not doing companies like us a great service," he says. "It might be doing the legal profession a great job but, the fact is, people aren't coming out of school with the right ambition and the right skills and the right mindset to work in our sort of industries."

Atkin's options are also limited by his refusal to bring his children into the company. But when the Atkin era comes to an end at Cannon Avent, there will be no regrets, says its managing director: "If you see how much damage it's done to the family already, it's not a tough decision at all. It's almost the only decision."

*The Sunday Times Rich List
**FT/PricewaterhouseCoopers Fast Track 100

Dominic Egan is a business and legal journalist. He is the author of Irvine: Politically Correct?, an unauthorised biography of the Lord Chancellor.

Britain's best family businesses

We have identified the UK's top 20 privately owned "family" operations. Our selection criteria were: £5m-plus profits, profit margins of ten per cent or more, low borrowings, strong net assets and a good credit rating. The companies needed to be predominantly family-owned (all are 100 per cent owned by a family or individual, bar Cannon Avent). After passing all these tests, we have ranked the companies by profit margin. Four companies in our list - Datel, Granwood Holdings, Steelite International and the British & Foreign Trading Company - are owned by an individual rather than a whole family. However, they exhibit the highly profitable, low-key, niche-driven success that characterise the group.
Our top 20 are all in rude financial health. Each produces £5m-plus profits. In fact, average profits top £11.5m. Average margins of nearly 18 per cent show a group of companies that understand their niches and know where the rich pickings lie.

Take Euro Packaging and Steelite. The Midlands-based companies operate in the unfashionable areas of packaging and tableware. For them, major investments in new plant has paid off in hefty profits. Martin-Baker, which makes ejection seats, has stuck to specialist skills. Lagan Holdings, too, focuses on airport runways contracts.

Financial independence has also contributed to success. None of our 20 are quoted (although Ipeco dabbled with the stockmarket, only to delist). Average net assets of £44.5m means that our 20 have strength in depth. Average gearing of just ten per cent helps, too. Eleven of the top 20 have credit rating scores of 96 per cent; the average is over 90 per cent. The banks don't call the shots here.

Only six are based in the south-east. The Midlands and north feature strongly. Half of our 20 are in "old-fashioned" industry. And they make a major contribution to local communities (on average, our top 20 employ 730 staff apiece). If only there were more...

1 Codemasters
Warwickshire-based computer games company

Family tree: Launched in 1986 by brothers David and Richard Darling while they were in their teens. Father Jim Darling is chairman. Family ownership gives a crucial edge in a cut-throat business, as it protects company strategies from rivals. This company is 80 per cent family-owned.

Financials: Pre-tax profits of £25.3m on £69m sales in 1999. Margins of 36.7 per cent. It has net assets of £15.7m and 195 employees.

Reckoned to be the best computer games developer in the world, Codemasters has turned out a string of hits such as TOCA Touring Car and Colin McRae Rally 2. The company has the margins and low borrowings to stay clear of the City, while still investing heavily in staff and new facilities. "As long as we keep on doing the same as we have always done - making good games, controlling our finances and not getting into debt - there's no reason we can't be a world-beater without floating," says Jim Darling.

2 Granwood Holdings
Chesterfield-based floorcoverings, adhesives and sealants company

Family tree: One hundred per cent family-owned. Michael Pass is boss.

Financials: £13.4m pre-tax profit on £38.5m sales in 1999. Profit margins of 34.9 per cent. Net assets of £37m, a credit rating of 96 per cent and 380 employees.

Granwood Holdings owns the highly profitable National Floorcoverings operation. Granwood's profits rose sharply to £13.4m on £38.5m sales in 1999, giving a 34.9 per cent margin.

3 Ipeco Holdings
Southend-based specialist manufacturer for the aviation industry

Family tree: The Johnson family took Ipeco back into family control in 1997 after a stockmarket flotation in 1997. It is now 100 per cent family-owned.

Financials: A profit margin of 25.4 per cent, in 1999 it made a £7.7m pre-tax profit on £30.4m sales. It has net assets of £20.8m and a credit rating of 96 per cent. It has 485 employees.

The company makes pilots' seats for civil airlines from its base in Southend. When a report from the Farnborough Institute of Aviation highlighted the poor standard of air-crew seating in civil airliners, business took off at Ipeco. It makes up to 2,000 seats a year including all those for Boeing.

4 Steelite International
Stoke-on-Trent based manufacturers of high-quality hotel tableware

Family tree: Another 100 per cent family-owned outfit, with David Johnson at the helm.

Financials: With 727 employees, it made £7.1m pre-tax profits on £34m sales in 1999. Its profit margin is 20.9 per cent and has net assets of £17.2m

In 1998, Steelite International launched a new £6m factory extension. The extension put the Stoke-on-Trent based manufacturer and distributor of hotel tableware at the forefront of technology in the Potteries. Some of the new equipment that went into the extension was the first of its kind in the world. It reflected the philosophy of founding chairman, David Johnson, to make healthy profits and plough them back into the business for more profit in the future. Exports are 50 per cent of sales value, reaching 100-plus countries.

5 Euro Packaging
Birmingham-based manufacturers of plastic carrier bags for supermarkets

Family tree: Set up by Abdul Alimohamed, who arrived in Britain from Malawi in 1974. His son, Afzal Majid, now runs it.

Financials: It made a £16.7m pre-tax profit on £84.3m sales in 1999. It employs 309 people and has a profit margin of 19.8 per cent. It has net assets of £21m.

The company makes up to seven billion plastic bags annually for supermarkets. "If you don't innovate, your competitors will," says Afzal Majid, joint managing director of Euro Packaging. To prove his point, the family-owned company invested £750,000 and built up its own design team to come up with a plastic bag dispenser that acts like a box of tissues. It worked, and its new dispenser cuts wastage at leading supermarkets by 30 per cent.

6 British & Foreign Trading Company
London-based textiles and furs business

Family tree: One hundred per cent owned by Michael Potel.

Financials: It has a 96 per cent credit rating and made a £5.1m pre-tax profit on £27.7m sales in 1999. Its profit margin is 18.4 per cent and employs 506 people.

Fast footwork has boosted the profits of British & Foreign Trading, which supplies suede and leather clothes to the high street. Within three weeks of Posh Spice's appearance in a leather biker jacket, British & Foreign's owner had designed a jacket and had them manufactured in India and China at competitive prices.

7 Bettys & Taylors Group
Harrogate-based catering and confectionery business

Family tree: Frederick Belmont created Betty's Cafe in Harrogate 80 years ago. Still a family-owned business run by Belmont's great nephew, Jonathan Wild.

Financials: Employing 709 people, its credit rating is 96 per cent. In 1999, it had £7.2m pre-tax profits on £44m sales.

The operation has expanded to five teashops and its tea barns of Yorkshire tea, of which nine million cups are consumed every year. One secret of its success is its investment in its staff - around 20 per cent of the staff have worked with the business for 20 years.

8 Datel Holdings
Staffordshire-based computer games accessories outfit

Family tree: One hundred per cent owned by Michael Connors.

Financials: With 239 employees, it made a £5.4m pre-tax profit on £33m sales in 1999. Its profit margin is 16.3 per cent, with net assets of £8m and a credit rating of 71 per cent.

Datel is one of the largest manufacturers of video games accessories in the world. With hefty investment on state-of-the-art manufacturing and top-flight distributors in the US and Japan, the company stays ahead of its rivals. The business is run and owned by 46-year-old Mike Connors, who started in the early eighties importing radios in kit form. A new factory and healthy margins show the way forward for others in the beleaguered British electronics industry.

9 Martin-Baker (Engineering)
Uxbridge-based manufacturers of aircraft safety and escape systems

Family tree: Sir James Martin, with Captain Valentine Baker, set up the company in 1929. It is now owned and run by the Martin family.

Financials: In 1999, it made a £14.6m pre-tax profit on £90.4m sales, with a profit margin of 16 per cent. It has net assets of £61m, a credit rating of 96 per cent and 749 employees.

Currently more than 6,800 fighter pilots round the world owe their lives to the Martin-Baker company, maker of the famous ejection seats. Since the first seat was tested in 1946, the Uxbridge-based business has grabbed 75 per cent of the world market. It is one of those areas of niche high-tech engineering where Britain excels. Originally an aircraft company, it moved into ejection systems after Baker's death in 1942 while flying a company prototype. The engineering required to make a seat that can safely eject a pilot from a jet aircraft is extraordinarily complex. But Martin-Baker has cracked it.

10 Walkers Shortbread
Banffshire-based manufacturers of bakery products

Family tree: The Walker family has been making shortbread at Arbelour on Speyside since 1898.Today, grandchildren Joseph, younger brother James and sister Marjorie run Walkers Shortbread.

Financials: Profit margin of 16 per cent and net assets of £42m. It has a credit rating of 96 per cent.

In 1999, the business saw its profits grow from £6.6m to £7.5m on sales of £46.8m. A new factory extension opened in 1990 and the company has the highest percentage of export sales in the British sweet biscuit trade - around half of its output. The company is a mainstay of the Highlands economy with 659 employees.

11 Cannon Avent
Suffolk-based manufacturer of baby stuff and rubber car mats

Family tree: See main article

Financials: £11.75m pre-tax profits on sales of £73.6m. It has a profit margin of 15.96 per cent, net assets of £21.6m and a credit rating of 75 per cent, based on 1999 figures. It employs 950 people.

12 Bisley Office Equipment
Bisley-based manufacturers and retailer of office equipment and furniture

Family tree: Started in 1931 by current owner and chairman Tony Brown's father.

Financials: Employing 967 people, it had a £10.9m pre-tax profit on £70.3m sales in 2000. It has a 96 per cent credit rating and a profit margin of 15.4 per cent. Its net assets are £51.3m.

You don't need to be a ruthless cost-cutter or bean-counter to make decent profits, even today. At Bisley Office Equipment, Britain's largest manufacturer of steel filing cabinets, the staff are on BUPA and in the company's non-contributory pension scheme after five years. The company, started in 1931 by Tony Brown's father in the leafy Surrey village that bears its name, originally repaired the bodywork of damaged cars. After the war, it diversified into waste paper bins and metal cupboards. But it was badly hit by the 1981 recession, so Brown, in an effort to stave off insolvency, turned to making metal filing cabinets. From its modern plant at Newport, it now turns out almost bespoke products for customers both home and abroad. The profit and sales growth in recent years show that Brown's diversification has been a stunning success.

13 Mabey Holdings
Reading-based steel fabrication and engineering business

Family tree: Mabey Holdings is run by the Mabey family.

Financials: It employs 1,134 people and, in 1999, saw a £14.6m pre-tax profit on £95.5m sales. Its profit margin is 15.4 per cent, has net assets of £65.5m and a credit rating 96 per cent.

Mabey Holdings' strength lies in its ability to deliver at remarkably short notice. Best known for prefabricated steel bridges, they are used in the developing world and disaster zones to replace destroyed infrastructure. In a highly competitive market, Mabey & Johnson exports 90 per cent of its output. Innovative designs and short delivery notice periods are critical. In Bosnia, for example, 25 bridges were supplied to help rebuild the shattered infrastructure with an average delivery time of only two weeks from time of order. Mabey Holdings, as the parent company, is still run by the Mabey family.

14 Cleveland Cable Company
Middlesborough-based company that distributes electrical cable

Family tree: Alastair Powell and his brother Michael run the company.

Financials: With a credit rating of 96 per cent it saw a £11.3m pre-tax profit on £75m sales in 2000. A profit margin of 15 per cent, it has net assets of £84.3m. It employs 294 people.

A private electrical contractor based on Teeside, it is one of the most low-key companies in Britain - but perhaps the Powells just do not want anyone else to know just how well their electrical cable distribution business is doing. Their secret is, however, deceptively simple. Most cable distributors will only sell larger drums, which means that there can be enormous waste for a contractor. The Powells offer what customers want in terms of offcuts and smaller lengths.

15 Dunelm Soft-Furnishings
Leicester-based retailer of soft furnishings

Family tree: Bill Adderley and his family have built up the operation to become one of Britain's most profitable retailers.

Financials: Employing 1,301 people, it showed £10.3m pre-tax profits on £73m in 2000. A profit margin of 14.1 per cent, it has net assets of £22.9m and a credit rating of 95 per cent.

Started on a Leicester market stall in 1979, Dunelm Soft-Furnishings sells anything from dusters to pillows. Its 40 stores have a reputation for good value.

16 Albert, Bartlett & Sons
Airdrie-based firm growing and distributing fruit and vegetables

Family tree: Founded in 1945. Run by the founders' two grandsons.

Financials: It had £7.2m pre-tax profits on £52.9m sales in 2000. Its credit rating is 87 per cent and it has net assets of £17.4m. It employs 659 people.

In this cut-throat age, the Airdrie-based root vegetable company, Albert Bartlett & Sons, operates on trust. It has no contracts with suppliers, just gentlemen's agreements. Founded in 1945, it has grown from small beginnings selling beetroot to a major concern focused on growing and packing vegetables for supermarkets.

17 Fenwick
Newcastle-Upon-Tyne-based department stores

Family tree: Fenwick was started by a Victorian grocer's son in Newcastle, in the 1880s. The Fenwick family remain in charge.

Financials: With 1,900 employees, the company has a 96 per cent credit rating and made a £31.2m pre-tax profit on £250.7m sales in 2000. It has net assets of £234m and a profit margin of 12.4 per cent.

Fenwick has the sort of financial strength that would make an M&S executive weep. Borrowings are negligible, assets huge and the credit rating the highest possible, reflecting the way that the family-owned business has been managed for well over 100 years. Best known for its fashionable but discreet Bond Street store in London, the Fenwick family keep a low profile, letting the figures do the talking.

18 Turners (Soham)
Newmarket-based freight haulier

Family tree: Wholly-owned by one family, its MD is Paul Day.

Financials: It made £7.8m pre-tax profits on £72.2m sales in 1999 - a profit margin of 10.8 per cent. It has net assets of £35m, a credit rating of 92 per cent and employs 997 people.

Turners (Soham) is a family-owned haulage and warehousing group based in Newmarket. Founded in 1947, the business is one of those beautifully run medium-sized British companies that just gets on with its own business not beholden to its bank or the City. The controlling family, led by managing director Paul Day, takes little out of the company. It operates 700 vehicles from nine depots and several sub-depots across the UK with 60 vehicles operating in Europe. Customers include Sainsbury's, the US Air Force and HM Prison Services.

19 LB Plastics
Belper-based manufacturers of thermoplastic extrusions

Family tree: Started in 1930 by the current managing director's father.

Financials: £6.4m pre-tax profit on £62.8m sales in 1999, its profit margin is 10.2 per cent. It has net assets of £50.3m and a credit rating of 96 per cent.

LB Plastics, a family-owned plastics and extrusion group, was a pioneer in the manufacture of PVC window frames for double glazing in Britain. LB dates back to 1930, when the present managing director's father gave up working in the hosiery trade to make parts for the textiles industry. It went into plastic extrusion after the war when the company bought its first extruding machine.

20 Lagan Holdings
Belfast-based construction and manufacturing building materials

Family tree: Kevin Lagan is chairman and his brother Michael the other director.

Financials: It made £11.5m pre-tax profit on £128.9m sales in 2000, with a profit margin of 8.9 per cent. It has net assets of £47.6m, a credit rating of 74 per cent and employs 817 people.

Lagan Holdings is a highly profitable civil engineering services business based in County Antrim. The company has carved out a niche market in constructing airfield runways and taxiways. Recently it has worked on the new Hong Kong airport where it produced and laid more than 525,000 tons of asphalt concrete in 18 months. The Lagans own all the shares and they act as model directors, taking no dividends, and only drawing modest salaries. But they do not stint on investment and are building a new multi-million pound cement plant in Ireland.


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