Chip Paints Ltd

They sale specialist paints - such as those used on boats, cars and industrial machinery. This sector of the market had the downside of requiring increased capital expenditure on specialist equipment and a highly skilled (and more costly) workforce. On the upside, however, it had less competition and enjoyed much higher gross margins than general paint products.
Currently, six years on, the company has steadily reduced its turnover from £200 million to £120 million but has improved its gross profit margin from around 12% at the time of the MBO to around 30% today. Net assets over the same period have, however, increased from £20 million to over £25 million; and the workforce has been reduced from around 500 to around 350 employees.

Mission statement

CPL aims to manufacture paints and allied products that are expertly formulated to meet the highest international standards, using the best available technology for end user consumers. We employ a team of highly experienced, dedicated and customer-oriented employees to ensure process and product excellence.
We will operate to the highest standards of business ethics in dealing with customers, suppliers, employees and the wider community.
We will also operate our business in a sustainable manner; reducing our impact on the environment wherever possible, and using recyclable materials as a matter of course in all our products whenever feasible.

Accounting and other information technology (IT) systems

The financial accounting system was originally an integrated part of Ashstead’s tailored IT systems and therefore had to be immediately replaced at the point of the MBO.
For the sake of speed, keeping costs low and ease of installation it was decided to use Microsoft Excel spreadsheets rather than buy a more sophisticated integrated package. The actual account ledgers were bought as a tailored system for the company....