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Buy in growth

Allister Moorcroft, MD of H Docherty Limited talks about the growth of his business and the challenges of acquiring other businesses.


Tell us about the background to your business

Docherty Group is a family-run business which manufactures flues and chimneys and distributes a range of products, including renewable appliances. I’ve been Managing Director for 15 years, during which time we’ve seen substantial growth, principally through acquisition. This has seen our annual turnover go from £1.5 million 15 years ago to £20 million today. We have 150 employees across nine locations, manufacturing from two sites, and distributing from seven other distribution branches throughout the UK. The business was originally started by my mother and father 50 years ago and I took on the role of Managing Director when my father retired. What has


What has been your vision for the business?

I have a background in accountancy, while my father was a salesman. We worked well together, but when he retired, I was able to develop my own strategy for the business. That’s when we went further into the distribution side: we were already manufacturing flues and chimneys and distributing them locally from the Newbury site, and sometimes nationally, but we decided that we really wanted to develop our own branch network. So we bought other distributor businesses around the UK, such as a distributor in Surrey, but also another manufacturer of flexible chimneys in Scotland.

We measure the profitability of the business by monitoring our management team’s KPIs – such as customer satisfaction.

Allister Moorcroft Docherty Group


What has been the main driver for your business’s growth?

We’ve expanded the business really through distribution and over the past couple of years through a major acquisition of one of our competitors, MMF, which introduced another six branches to the company. The last two acquisitions weren’t planned, but I’ve been in the industry for such a long time that I’m always aware of opportunities that come up.


How has Haines Watts helped you with the acquisitions?

Haines Watts provided us with good background data on the target companies – they have been invaluable in helping us to assess which businesses we should acquire. Our Haines Watts Partner Michael Davidson has been able to support us both legally and financially by organising the finance and some of the due diligence. Without his assistance I don’t think the deal would have happened.

Acquisitions take a long time – the last one took 10 months – but Haines Watts’ support ensured that we had good quality management information that gave the banks confidence. Michael has also since helped us to restructure the group, so five trading companies became one legal entity, and this has brought savings because the taxation is simpler and we no longer need to report on five companies.


How did you manage the acquisition process?

At first we thought it would be a simple acquisition, taking three to four months. But it became clear that because there were three retiring directors from the other side of the business it was more complex. It was important that the acquisition had my full attention, so the directors and management team took over responsibility for Docherty Group during the 10 months. It was a real challenge and I was glad when it was over so I could get back to running a chimney company.


What other challenges did you encounter?

There was unsurprisingly a big cultural difference between the two businesses, which meant we had to lose a couple of key members of staff who culturally couldn’t move over to the way that we operate as a company. We were also running two different computer systems and price books, sometimes to the same customers, and it took us well over a year to move everything over. Eighteen months on, our new IT system means we can start using the data that we’re getting to really start driving the business forward.


You have a training facility – why did you decide to open this?

Government requirements for HETAS training for solid-fuel installers meant there was a real opportunity for us to support and offer our customers training through our own facility. We invested over £100,000 in a facility in Derbyshire, and we’re now fully HETAS approved.


What are your short-term objectives?

The next two years will be about focusing internally on cost savings we can make and how we can improve our customer service. We’re examining all of our products.


How do you measure your business’s performance?

We measure the profitability of the business by monitoring our management team’s KPIs – such as customer satisfaction. We believe this is what will differentiate us from our competitors, so we’ve surveyed 100 customers to benchmark our current performance and measure improvements.


How important are your people to the business?

Our staff separate and define us from the competition, which is why we invested in our training facility. We use that to do a lot of our own internal training. We also have a great retention record, with staff members who have worked for us for over 37 years. My main personal assistant has been with us just over 30 years now. But we also like to bring on our own staff as well – in fact we’ve recently got an award for apprenticeship training from the West Berkshire Training Consortium.


How do you deal with threats to the business?

We’ve committed as shareholders to leave our money within the business as we really want to be in the position where we don’t actually have any bank borrowing. Therefore if we ever hit a difficult period, we’ll be strong enough to come through it.


What are the main challenges for your sector?

One of the biggest challenges over the past 10 years has been our competitors’ products becoming available online.

We’ve developed a business-to-business ‘web shop’ which we launched in March, but we won’t deal directly with the public as we believe it doesn’t deliver the service that the public requires.


Has Haines Watts performed over and above expectations?

Haines Watts has provided a consistent service – our Partner Michael Davidson has been my accountant for the past 10 years and we have a great working relationship. We also have a long-term relationship with the Haines Watts audit team, where we’ve been working with the same people for the past six years – and this continuity is a real advantage. We know exactly what we need to provide and we find each year that it just gets better and better as we’ve got to know the people and what’s required. Whether you are doing a merger or acquisition or need tax advice, you need specialists in that field, and because Haines Watts is a larger group, it has that expertise in-house.

Haines Watts Partner view

What I like most about Allister is that he’s pragmatic, self-deprecating and has an in-depth knowledge of the business and the industry.

Initially, Allister wasn’t sure which direction the business was going in, simply that he wanted to help his father exit successfully and make his own mark.

We started by helping him to work ‘on’ rather than ‘in’ the business, as he had a tendency to be too focused on accounts. He has since built up a management team and put his trust in them to make decisions – a brave move, as there will be mistakes, but he will end up with a team that has learned from those mistakes and will have the confidence to take the business forward.

Allister has acquired four competitors ‘opportunistically’, and we have helped him to prepare business plans and access financing prior to the purchases, and to restructure to bring them ‘under one roof’ afterwards.

We have also provided financial planning advice to Allister to ensure he extracts wealth efficiently from the business and that he manages his assets sensibly.

Michael DavidsonGroup Managing Partner

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