Staff to take control of £20m civil engineering firm set up from kitchen table

Staff at one of Scotland’s best-known civil engineering firms are to take control of the business in a move that guarantees the future of 130 jobs.

Tayside-based contractor Kilmac is being placed in an employee ownership trust (EOT) by founders Athole McDonald and Richard Kilcullen 18 years after they set the business up from a kitchen table.

It has grown to an annual turnover of £20 million and has worked on high-profile projects including the transformation of Perth City 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 had met at Dundee Institute of Technology, intend to remain in place at the business for at least the next three years before handing over the reins. Mr McDonald said the move was a positive development for the firm 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 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.

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

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

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

Carole Leslie of Ownership Associates said the employee-ownership business model was an attractive option for business-owners who want to preserve their legacy while protecting the future of 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,” she said.

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

From a first-year annual turnover of around £800,000, by 2018 Kilmac had achieved revenues of £10m. The company’s next financial results will show profits of £1.3m on a £20m turnover.

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

Statistics show that employee-owned businesses consistently outperform other ownership models in terms of profitability, productivity thanks to higher levels of engagement and enhanced employee wellbeing, as well as improved business resilience during 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 specialising in website and app delivery, serving customers across government, transport and HR. Clients include FirstGroup, Tesco Bank, Cosla, Audit Scotland, National Transport Authority Ireland, Imperial College London and Bristol Airport.

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