And then there was one

The Kinetics Group is no longer a collection of businesses united under the one banner – but the
one unified company looking ahead to a strong future delivering for its clients

”It’s been an exciting journey, we’ve covered a lot of change, very quickly, so I am very impressed by what we have managed to achieve,” said Nick Murphy, development director for the Kinetics Group.

He speaks as a man with a corporate facilities management background – corporate both in terms of the former employers on his CV and in terms of the commercial clients those companies dealt with – so he admits it was an unusual set up he found himself working in, when he joined Kinetics a little over two years ago.

“When those companies bought a smaller firm, there was already a large structure to bolt them on to,” he added. “The strange thing, coming to Kinetics in December 2007, is that there was no large company – just a small ‘core’ that was Kinetics and a number of acquired SMEs.”

The small core was established in 2006, with the backing of venture capitalist Sovereign Capital. In a two year period, it acquired 11 largely family run businesses, ranging from construction companies, heating specialists, mechanical and electrical businesses, and so on, each enjoying turnovers from between £5 and £15 million. Each one was a successful going concern, but had reached their natural limit of growth as a family business.

Enter Kinetics, to extend their individual and subsequently collective reach to the next level. The intention was to provide the support and investment to manage the process of change, and thereby transform itself and its assembled businesses into the one unified whole. The process has been completed, resulting in a new company targeting a gap in the market between small companies and the large players servicing social housing.

Throughout this process of change, the key trick was to retain the family ethos of the old businesses as they were merged into the singular structure, to create a company with national reach but a local focus. The process required care and consideration, but it is one that Kinetics feels has been a huge success. And, as ever, it is the results that speak loudest.

For one thing, the acquisition and transformation process has seen little in the way of clients dropping away under the new ‘regime’. As Murphy explained: “In my experience, when you have a company that is on an acquisition strategy, it might buy in – as far as turnover is concerned – another £50 million per turnover with several different companies but end up with £35-40 million because clients go. But we have actually bought in companies and retained well over 95 per cent of their existing client base.”

Organic growth has also seen the Kinetics Group achieve a turnover of some £125 million – not far from the peak of around £175 million it sees as its natural operating niche. The growth has come in the form of new contracts with existing clients, such as increased business with major clients Liverpool Mutual Homes and Riverside, as well as new business with new clients. The formation of the singular Kinetics brand means that those original SMEs have seen their reach expanded, opening up new markets.

For example, the two construction companies that had been acquired in the North West have been able to compete for – and win – business in the South East. While conversely, the various HVAC companies acquired in London and the south coast of England have seen the North come into their reach.

Today, Kinetics directly employs some 1,650 people, and has 22 service centres throughout the UK, not including satellite offices. With the head office in Morden, Surrey, these service centres are located strategically in, for example, Benfleet, Essex; Enfield; Sutton Coldfield; Leicester; Speke in Liverpool; and Salford. They ensure that it is never very far from its clients’ properties, and it has a policy of co locating with clients wherever possible.

Of course, the businesses acquired by Kinetics no longer operate according to their original discrete structure, but have been merged into the three divisions that the company operates. That’s one of the reasons why maintaining the local, family feel was such a challenge to achieve. That the majority of the people working for these former SMEs – including many of the original owners – stayed on with Kinetics not only shows that the strategy worked, but undoubtedly played a significant role in achieving that success.

Kinetics divisions are based around core capabilities. Facilities Services, provides facilities and asset management, including the technical side of M&E installations, refrigeration, heating works and so on. Property Solutions provides a Decent Homes vehicle as well as handling responsive works throughout the UK. While the Partnerships division, the construction arm, provides works such as kitchen and bathroom installations, retrofit and refurbishment services.

The process of merging the 11 into one to create a Kinetics Group greater than the sum of its parts was completed in early 2009. For the last year, one might say that as the company has pursued growth, it has also bedded itself down into its new service. That has included tweaking and revamping services, to ensure that delivery is efficient for the benefit of clients.

An openness with both clients, residents and staff alike, has been an integral part of this process. For example, a rolling shift programme for its engineers and service desk was introduced following suggestions from residents. The new pattern means Kinetics is able to give a seven day response service, permitting residents to book appointments on weekends and evenings, which went down well.

Similarly, a query from one of its engineers about lengths of journeys led to the company creating a more efficient deployment of its staff. By looking at the locations of its engineers, clients’ properties, and so forth, it zoned the UK so that its staff operate within or close to their home postcode areas. This brought a number of benefits for all concerned. It reduced the drive time for engineers going between jobs, it reduced fuel costs and vehicle wear, and reduced Kinetics’ carbon emissions as well as improved its service delivery.

The company also engages heavily with training, constantly optimising the customer care skills of service desk employees and trades people alike. This is all part and parcel of the company’s desire to improve the “customer experience” going forward.

One aspect of its workforce that the company takes pride in is its local connection. This not only enhances the ‘family business’ feel of the company, but also means it reflects the cultural and ethnic tapestry of the communities where it works: an obvious boon when working so closely with people in their home environments. A lot of its tradespeople are also female. This helps Kinetics address the needs of residents where religious or cultural considerations may make the visit of a male employee problematic, or where people may simply feel more comfortable with a female operative. It also helps, of course, to get more women into the construction industry.

Kinetics has certainly been busy since it came into being and it has no intention of letting the pace slip. As it contemplates the future, it is looking to expand its responsive repairs, maintenance and other services to social housing as well as local authority’s corporate buildings, the education sector, and it is also moving into the maintenance and refurbishment of care homes.

“Decent Homes installations are getting to the stage now where they do need an element of repair,” said Murphy, “so we are looking to work more on our responsive side, providing a service to clients who have perhaps gone through their Decent Homes budget. That doesn’t mean we are turning away from the Decent Homes market – certainly not, we are actively pursuing such projects.”

Social housing will long stay one of the core markets for Kinetics as it seeks to broaden out; it is, after all, part of the ‘hearth and soul’ that has made it the company what it is today.