Taking a £2m business out of administration to one with ambitions to hit £100m

Growth | Manufacturing | South West

Taking a business out of administration and from a £2m turnover to more than £30m in only fourteen years is no easy task, but it’s exactly what the management team at Offsite Solutions has achieved.

As the name suggests, the business manufactures bathrooms offsite for use in a range of sectors including hotels, hospitals, apartments and student accommodation.

Richard is Executive Director and is part of a leadership team with James Stephens as Managing Director.

Tough start

Richard explains the history of the business: “In 2004 we bought the business out of administration – It had a great concept, but it was struggling with cash flow. The business had some strong existing contracts with developers of student accommodation  and the Ministry of Defence (MOD) but couldn’t deliver them because of cash flow restrictions.

“Fast forward fourteen years and we now turn over more than £30m. We employ 260 people across three factories and make the widest range of bathroom pods in the UK, from GRP composite to premium steel-framed pods with ceramic-tiled finishes .”

Challenges

Richard says that the two main challenges faced in growing the business have been the recession and of course Brexit.

On the recession, he explains more: “The recession impacted demand for our products, but we had made a conscious decision pre-2008 to maintain our GRP offering – despite previously discussing stopping production of this type of pod – and this was a pivotal decision, as it provided us with a product that sustained the business during this challenging period.

“Since the recession, demand for our products has radically increased year on year and we now manufacture around ten thousand units annually.  Since the referendum, there has been significant  wage inflation in urban centres due to a lack of availability of construction skills, partly due to many overseas workers returning home and the fact that the UK hasn’t upskilled its own population with sufficient apprenticeships.

“That said, this trend is not being seen as much outside the major  urban centres. But what has also happened is that the cost of building major construction projects has increased and caused time delays. These factors have actually been positive for our business, as we manufacture offsite and these delays are avoided because of the greater certainty of factory production and a more stable, multi-skilled workforce.”

Brexit

Offsite Solutions has a significant migrant workforce and imports a large volume of products annually. So, what does Richard think of the current situation?

He says: “I’m cautiously optimistic as we have a shortage of housing supply and once we have clarity on the Brexit deal, that will help.

“Unfortunately – though, what we did see after the referendum was that there were a number of more speculative projects that were pulled or pushed back by six months. I believe that until the end of March there is going to be caution in the market.

“Additionally, about 50 per cent of our component products and materials are imported items – GRP is made from oil derived products; and we import Spanish tiles and German brassware for example. So, we may see an impact here but so will our UK competitors, which means we’re in the same situation.”

The future

On the future, Richard says that demand in the bathroom pod market is huge and once there is clarity around Brexit – they will be looking to build a fourth factory.

He explains: “The market is many times where we are now, and housebuilding is another area for potential growth. We’re also  developing other part-modular components that can go into buildings such as kitchens and utility pods, so these are new innovations we’re considering for the future. But as a pure bathroom pod manufacturer, we can be a £100m business.

“As a business we are very committed to innovation and recently delivered a product first for a building in Canary Wharf, with the launch of steel and concrete pods. We have supplied pods to universities in the US and Europe and also for natural resources projects in countries such as Kazakhstan where they require relocatable accommodation for the duration of a drilling or mining project.”

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