Taylor had a long, proud history as a manufacturer of waste containers in the UK and a fantastic product. Its Continental 1100 was the market standard for 4-wheeled steel bins for over 20 years and still is. When we acquired the business in 2011 it had been through a period as an orphan asset, but for most of its 50-year existence Taylor had been owned by the Taylor family. We saw the opportunity to take the strong, loyal, family ethos and introduce commerciality into the revenue and controls into the manufacturing facility to enable growth. We believed the resilience of the underlying bin sales so transformed would then support development and growth. And we believed that growth was to come from building on that one symbolic product and extending to other products and other geographies to create a resilient, diversified, international waste containment provider.
Contraction in the UK economy and a drive by local authorities to consolidate and run down their fleets of waste containers meant the recent history on acquisition was flat for the core product, but the installed base gave strong cause to think the related growth would resume to follow the replacement cycle. Unfortunately asset sweating, historical over-purchasing and changes in refurbishment usage meant the core £20m product revenue for both Taylor and the market declined by over 30% within the first twelve months of our ownership.
Our response was complete and absolute. We acquired a bolt-on manufacturer, Sellers, to bring an alternative manufacturing site and new products – large, sea-container style waste containers for county recycling sites. We actively overhauled the production process, changing everything from supplier dependencies to shift patterns and manufacturing techniques. We installed a new team at first and second-level management which transformed the commercial thinking in the business – within a few years Taylor’s revenues were back to pre-acquisition levels with the revenues filling the 30% shortfall comprised of: new self-manufactured products; new re-sold products utilizing Taylor’s relationships; services and rental income; international sales; international operations and overseas offices; and, technological innovations to up-sell the core product and provide standalone sales. The creation of over £7m of revenue from these changes in addition to margin improvement in the residual core left a diversified business unrecognizable from both the one we acquired and the one left standing after the initial market downturn.