CASE STUDY: ENCORE ENVIRONMENT
“THE TEAM DREW UP A TWO-YEAR PLAN THAT’S PUT US IN A REALLY GOOD PLACE. NOW THEY’RE HELPING US TO VISUALISE WHAT IT’LL LOOK LIKE WHEN THE TIME COMES FOR US TO EXIT THE BUSINESS”
Rachel Rowley, Encore Environment
Encore Environment’s one of the country’s leading waste management and environmental consultancies with economic, environmental, and social value at the heart of their business ethics. Their work’s a clear example of how ethical and profitable values align.
In the last six years, the company’s grown from a small start-up with big ideas, to a revered team of waste management, environmental and Building Research Establishment, Environmental Assessment Methodology (BREEAM) experts. They provide the big players in the construction industry, with a strategic approach to waste continuity that challenges the traditional routes of waste disposal. This offers construction companies alternative, data-driven methods of waste management which delivers social, economic and environmental value, as well as waste cost savings on projects. With national awards under their belt, and UK wide press and broadcast media covering their projects, they’re what you might call a ‘trailblazer’ in the industry. And, they’re not shy to ruffle feathers and challenge myopic processes in what can be a challenging industry for smaller suppliers.
This isn’t to say it’s been an easy ride. The company’s had financial challenges along the way including the changing working capital requirements of a growing business and the effects of Covid-19.
UNBLOCKING CREDIT FOR GROWTH
They’d initially turned to TC Group for its accounting expertise. Rachel Rowley, Managing Director of Encore Environment said: “We’re quite high maintenance when it comes to bookkeeping, because there’s a mandatory paper trail for every step when waste’s moved and delivered.”
Then, as the company grew and new challenges were presented, TC Group was able to help Encore explore additional sources of credit, to support their growth and help level out any potential financial pressure points within their business. Rachel continued: “TC Group reaffirmed our goals of spreading the risk, which gave us the mindset to increase our portfolio of customers from a smaller number of big clients in 2018, to over 30 clients by 2020. This was to ensure we didn’t have all our eggs in one basket. For example, our biggest client now makes up just 10% of what we do, whereas it was previously 60!”
CASH BOOST IN HARD TIMES
The pandemic’s impacted everyone and with the initial lockdown stopping construction in March 2020, this had a knock-on effect for all suppliers to the industry. However, Encore wasn’t a company to bow under the strain of the situation. They were smart. They did a short-term plan that would see their team through the restrictions and prepared their services, so they were ready to move as soon as the restrictions were lifted.
Rachel said: “Our directors have a background working on the corporate client-side, so we understand what our clients’ needs are and we prepared accordingly, with a 100-day plan for getting services back up and running. However, cash flow was tightening so we needed TC Group’s expertise and advice to help us understand what options we had to cover the lockdown period.”
They came up with a handy windfall. “We’d always been told that our rateable value meant we weren’t eligible for a small business rates relief grant and we’d never questioned that,” said Rachel.
But with a little digging, the TC Group property team discovered this wasn’t the case. They successfully applied on the firm’s behalf for backdated relief and the related Covid-19 grant. In total, over £32,000 was secured, which was a huge benefit in tough financial times. This was in addition to the Bounce Back Loan Scheme (BBLS) they were eligible for.
PUTTING THE SQUEEZE ON OVERHEADS
The team also devised a plan to help the Northamptonshire-based firm to maintain a forensic focus on costs. Efforts to broaden the client base had involved some travel and entertainment expenses that proved fruitful, but also expensive.
“We needed to reduce our costs, that was a given.” said Rachel. “In terms of our travel and entertainment, this was easy to reduce because we actually weren’t allowed to conduct our relationship management activities as usual, and this all moved online. However, we also needed to streamline other parts of the business to make us healthier and more nimble. As such, we closed the London office temporarily, and co-ordinated all services through our head office in Northampton, which gave us much lower overheads.”
TC Group has now drawn up a two-year plan for Encore, which has put them in a really good place with a positive outlook for the future. Rachel added; “our plan’s to improve our margins this year, which we’ll probably achieve despite the pandemic, and then look towards achieving £5m turnover as per our 2-3 year growth trajectory.”
AN EYE ON THE END GOAL
Encore Environment stands out among its peers for its focus on social value. They’re not just seen as a service supplier for waste management but a trusted advisor influencing environmental and sustainability best practice and can actually bring dynamic innovation to the table. This is exemplified by their award-winning, data driven web-based software, Project DIVERT, which facilitates the diversion of reusable waste to social enterprises and communities in need. And also an initiative aptly named ‘Waste Wise Kids’, a non-profit venture that provides UK primary schools with an educational programme that teaches children (aged 4-12) about the waste hierarchy and its impact on the environment.
With ambitions to capture a much bigger slice of the £1billion waste management sector, the business is, in many ways just getting into its stride. “We still have a lot to do with growing the business and building awareness of Project DIVERT and Waste Wise Kids, however we also look to the team in Northampton to help us visualise what it may look like when it’s time to exit the business. In terms of trusts, pensions and property, TC Group’s future outlooks are invaluable to the company owners,” stated Rachel.
For now, the business remains a source of passion. “We’re very fortunate in that we only work with people we like – and that definitely applies to TC Group.”
Rachel’s especially impressed that TC Group’s Relationship, Manager Antonia Aldridge-Brown, is always on hand to offer advice. “I know I can pick up the phone whenever I need to. As the leaders of our business, we always make ourselves accessible to our customers, and I value that.”
“Gavin Pilcher and I both come from corporate backgrounds, so we know how to run a business. The gap in our company’s that we don’t have a specific person in a commercial role, and it can be difficult to stay on top of the ever-changing legislation. We need TC Group to reassure us about the overall direction and help deliver on the detail. It’s so good to have advisors who are like-minded and offer value, whether that be professionally or personally.”
FROM START-UP TO SUCCESS
“Encore are incredibly passionate about what they do and why. I just really like their commitment to the wider cause. Of course they want to make money and secure their family’s future, but Rachel especially’s also focused on the environmental side.
When Covid-19 hit, business rates relief was one of the points we checked, to ensure none of our clients were losing out. Encore had just been lumped into the higher rate, but our research told us that was wrong. Our property team followed up and it was an incredibly quick process for them to get a backdated application and refund approved by the local authority.
The next thing we’re working on is helping Encore achieve more structured management information, to provide a clear picture of what’s making them money every month. If they can get a real handle on that, they’re well placed to grow fast.
Their aim’s to reach a turnover of £20m. I think that’s admirably ambitious, but with the right support behind them, they could definitely get there. And their not-for-profit work will continue to boost their profile and drive their sustainability message further.”
Antonia Aldridge-Brown, Associate Director