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Two years ago Fox Brothers turned over approximately £16m as a Lancashire haulage and earthmoving contractor. Now, thanks to a series of acquisitions and a strong rebound from the Covid crisis, it is on course to turn over nearly £100m next year.
Paul Fox took over the family business on the death of his grandfather Harold (also known as Barney) Fox in 2007. Paul was just 23 years old. The business had been founded in Blackpool in 1932 by Harold’s father Jack. It grew from haulage origins into construction plant hire and earthmoving and even, for a while, mobile crane hire.
Young Paul Fox might always have been ambitious; five years ago his ambition started to manifest itself.
John Flood, who joined the company in September 2020 as a director and minor shareholder, recalls a conversation he had with Paul Fox back in 2017. Flood was a client and Fox confided his aspirations to grow the business.
Growing businesses was something Flood knew about. He had worked for Lancashire utilities contractor ARM Services throughout the 1990s, through its merger with Lancashire Enterprises in 2000 to form Enterprise and through the 2007 acquisition of Enterprise by investment firm 3i. He was commercial director when 3i sold Enterprise to Ferrovial for £385m in 2013. Flood had helped grow the business from around £30m annual turnover to £1.1bn.
Flood and Fox had conversations about working together to build up Fox Bros. When the arrival of the Covid pandemic shut down large parts of the UK economy in spring 2020, Flood had time on his hands to offer business support. In September 2020 he formally joined the board of directors – the same month that Fox Bros closed the transformational acquisition of Clive Hurt Plant Hire, down the road in Leyland. The deal included Clive Hurt’s Welsh business, CMP Plant Hire, based in Anglesey.
However, the Clive Hurt Plant Hire deal had already been in the works for a year or so before Flood officially came on board.
At a meeting in 2019 Clive Hurt and Paul Fox discussed how it would make sense for the two companies to join forces. The two companies were a similar size – both family-owned and with similar heritage, with a close correlation between customers and revenue streams. It was Hurt’s suggestion that, as Fox was in his mid-30s and Hurt in his late 60s, the younger man might like to buy the older man out.
It probably did no harm that Paul Fox’s partner is Caroline Hurt, Clive’s daughter and a director of the Hurt family business.
The onset of Covid slowed completion of the deal but for Fox Bros the initial lockdown was only temporary. The nature of its business – lone workers in lorry or excavator cabs – meant it was back up and running again in May 2020 with full social distancing and Covid compliance. With the commercial experience of John Flood now in the room, the deal was resurrected and completed by September.
With this deal, the newly formed Fox Group now had a combined fleet of 150 wagons (70 from Fox Bos, 80 from what is now Hurt Plant) and 400 construction machines.
As with all subsequent acquisitions, Fox has kept Hurt Plant as a standalone entity with its own branding, premises and management – Clive Hurt moved on after three months of bedding in and his son Richard after five; but Caroline is still there.
The expected synergies were rapidly found. In the 12 months post acquisition, the year to 31st August 2021, Hurt Plant made a pre-tax profit of £3.0m on £33.8m turnover, compared to £1.9m profit on £18.6m turnover the previous year. Even allowing for a post-Covid rebound, there was substantial organic growth in there too, thanks to early cross-pollination of the two businesses.
Fox Bros had only recently closed its plant division and had sold the assets in 2019 – the company lacked the personnel to make it effective, Flood explains. Not only did Hurt Plant come with inventory and customers, but it also had a strong management team, with experience of running both operated and no-operated plant.
But the Hurt acquisition was just the start. A quarry and landfill site in Bacup that Hurt Plant operated (but didn’t own) was purchased in March 2021, to avoid being over-reliant on other people’s quarries and landfill sites. This was followed between August 2021 and May 2022 with the acquisitions of JJ O’Grady, Blackledge Plant Hire, Cotswold Roller Hire and Woods Waste.
In each case the common factors were that they were successful family-owned businesses with a good customer base. And in most cases, Paul Fox already knew the families.
Preston-based JJ O’Grady had been set up by husband-and-wife team Seamus and Katherine O’Grady in 2006, taking on minor civil engineering and utilities works. Fox Bros already had a contracting division – earthworks and muckshifting mostly – but this bolted on complementary capabilities. The O’Gradys had been looking to sell and had already seen one deal fall through.
John Flood said at the time: “The acquisition makes perfect strategic sense for our business as JJ O’Grady adds a number of different services and different customers, including local authorities.
It has an excellent reputation, and we believe it has a great deal of potential to grow. That’s our aim, to want to continue to build and grow the business by taking advantage of synergies across the wider Fox Group.
“We will be able to offer clients a more complete solution from site preparation through to highways and street maintenance. Our focus is on providing a single source solution for local authorities, housebuilders, infrastructure, construction and civils contractors.”
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Blackledge Plant Hire, in February 2022, was another friendly acquisition. Established in the 1970s in Bamber Bridge, it was a second generation, family-run business with 40 machines and 14 trucks, turning over about £3m a year. “Relatively small but a good bolt-on acquisition cementing our presence in Lancashire,” Flood says.
Paul Fox, who already knew Keith Blackledge well, said at the time: “Blackledge is a well-run business with great people and has a track record of providing excellent services to a wide range of clients in the local area. It also means that we get a welcome boost to the group’s existing fleet of quality vehicles and plant.”
All acquisitions to date had been firmly in the local area. In April this year came the second transformational – or certainly potentially transformational – deal: Cotswold Roller Hire (CRH).
Although it had a depot in Wigan, CRH, as its name suggest, was Fox’s first acquisition outside of Lancashire. It has its headquarters in Evesham and depots from Durham in the north-east to Plymouth in the south-west, with Sheffield, Wigan, Essex, Andover and Bridgend in between.
CRH came with 1,800 machines – mostly compaction rollers – and all its own real estate. In 2020 it had made a pre-tax profit of £1.7m on £10m turnover. In fact CHR’s turnover had been consistently around £10m for the past decade, and consistently profitable too.
Once again, it was “a well-established, well-run family business that was strong financially”, Flood says.
At the time Paul Fox said: “The acquisition of CRH adds a large number of plant items and specialised transport to our already substantial fleet of plant, tippers and bulk haulage. The geographical spread of CRH’s depot extends the reach of Fox Group, hugely increasing our footprint across the UK.”
Flood confirms that the plan is to exploit the opportunities offered by CRH’s depots to offer other Fox Group services around the country.
And still the acquisitions keep coming. In May Fox acquired Blackpool-based Woods Waste, which specialises in inert waste disposal, recycling, soil supplies and aggregates. Once again Paul Fox knew the vendors, Andrew and Shirley Rayner-Porter, and knew they were looking to sell up.
“We have a very strong long-standing relationship with Woods Waste and them becoming part of our group makes perfect sense,” the Fox Group chief executive said. “They are a successful family-run business, employing great people. It allows us to build on our already strong Blackpool presence and their scope of services fits perfectly with us.”
After all of these acquisitions, Fox Group now has 650 employees, 1,700 items of construction plant, 300 vehicles and 2,000 active customers. Projected turnover for the year to 31st August 2022 is £81.2m. And on the basis of acquisitions to date next year it will be £94.9m, Flood reveals.
So is that it then? Has the growth ambition been satisfied? No, insists Flood. “There is more to come. We are in the middle of a journey. We are still in phase one,” he says.
Phase two will be more of the same, he adds. There will be no radical diversifications – no return to crane hire, for example – but CRH’s depot network opens up opportunities for regional expansion beyond the Red Rose heartland, taking what it does in Lancashire to other parts of the country: haulage, aggregates, groundworks, plant hire.
Fox Group has borrowed money to fund the expansion, but not extravagantly so, Flood says. Close Brothers has provided invoice finance, asset finance and term debt. Flood acknowledges that gearing is high “but a lot of the borrowing is asset-backed” he says. “We have not paid vast amount for goodwill.”
It has not all been about buying turnover. There has been organic growth too, often made possible by synergies being realised. Bringing together the Fox and Hurt contracting divisions has enable the group to take on larger and more varied contracts.
Last summer Fox moved into Cumbria, opening a transport depot in Brampton near Carlisle, and an office in Penrith.
In November 2021 it began stevedoring services at Glosson dock (near Lancaster) to bring aggregate into north-west England from a quarry in Anglesey that Hurt Plant/CMP manages. Flood says that the group is now exploring rail freight as a transport option – all part of a sustainability drive that has also started seeing the arrival of battery-powered lorries in the haulage fleet.
“In 2020 I said to Paul that we could make it a £100m business in three to five years,” Flood recalls. They’ve just about done it in less than three, and they’re not stopping.
“We’re still ambitious with our future growth targets,” Flood concludes.
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