Dai Powell, HCT Group

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Dai Powell, HCT Group

  1. 1. Social Enterprise: Going for growth Dai Powell Chief executive, HCT Group 2 November 2011
  2. 2. HCT Group: Origins <ul><li>Founded in 1982 as Hackney Community Transport </li></ul><ul><li>“ To deliver social change through enterprise, empowerment and partnership” </li></ul><ul><li>In 1993 we won our first commercial transport contract </li></ul><ul><li>“ To be a sustainable social enterprise, we must also be an effective enterprise” </li></ul><ul><li>A business model for hundredfold growth </li></ul><ul><ul><li>from a turnover of £202k in 1993 </li></ul></ul><ul><ul><li>to a turnover of £28.1m in 2010/11 </li></ul></ul><ul><ul><li>630 employees and a fleet of 325 vehicles </li></ul></ul><ul><li>Surpluses reinvested to support the core mission </li></ul>
  3. 3. Our enterprise model
  4. 4. Our social model
  5. 5. Social impact <ul><li>Profits reinvested in the communities where they are earned </li></ul><ul><li>Transport for community groups </li></ul><ul><ul><li>deeply discounted accessible minibus hire </li></ul></ul><ul><ul><li>93,000 passenger trips in 10/11 </li></ul></ul><ul><ul><li>39% of groups say they would fold without it </li></ul></ul><ul><li>Transport projects </li></ul><ul><ul><li>812 community bus </li></ul></ul><ul><ul><li>YourCar </li></ul></ul><ul><li>Training for transport projects </li></ul><ul><ul><li>nearly 400 qualifications for hard-to-reach unemployed </li></ul></ul><ul><ul><li>74 job outcomes (10/11) </li></ul></ul><ul><ul><li>often delivered in partnership </li></ul></ul>
  6. 6. HCT Group – A growth story <ul><li>A conscious ambition of rapid growth </li></ul><ul><li>Growth driven by trade </li></ul><ul><li>Eliminates dependency on grants </li></ul><ul><li>20% per year, every year </li></ul><ul><li>An industry that rewards scale </li></ul><ul><li>“ The more we grow the business, the more we grow our social impact” </li></ul>
  7. 7. Geographical Growth
  8. 8. Turnover growth
  9. 9. Growing away from grants
  10. 10. Profit reinvestment outstrips grants
  11. 11. Governance for growth <ul><li>For-profit company board legal duty: </li></ul><ul><ul><li>Maximise shareholder value </li></ul></ul><ul><li>Traditional charity board legal duty: </li></ul><ul><ul><li>Minimise risk to the charity </li></ul></ul><ul><li>Creates a ‘can’t do’ culture </li></ul><ul><li>HCT Group board culture (within legal constraints): </li></ul><ul><li>“ Maximise the good that we do” </li></ul>
  12. 12. A culture for growth <ul><li>A focus on growing the business </li></ul><ul><li>Celebrating business wins </li></ul><ul><li>All staff know what success looks like </li></ul><ul><li>Tomorrow won’t look like today </li></ul><ul><li>Invest in growth </li></ul><ul><li>Stay hungry! </li></ul>
  13. 13. Investment for growth <ul><li>Cost of grant-seeking vs investment-seeking </li></ul><ul><li>Social investment a key part of our story </li></ul><ul><li>Social investors seek both social and financial returns </li></ul><ul><li>They will need you to measure both – building your capabilities </li></ul><ul><li>“ When charities invest their reserves, do they also seek a mission-based social return?” </li></ul>
  14. 14. The Social Loan <ul><li>Adventures in high finance </li></ul><ul><li>£4m raised to finance expansion in 2010 </li></ul><ul><li>Quasi-equity – based on turnover growth </li></ul><ul><li>Covenants based on social impact </li></ul><ul><li>Allows investors to share in success </li></ul><ul><li>Controversial? </li></ul>
  15. 15. Questions? Comments?

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