The Sunday Times July 5, 2020 i

BUSINESS

Chief executives study thetheory of crisis managementbut most hope they neverhave to put it into practice, sothe coronavirus pandemichas been a rude awakening.The virtual boardrooms ofthis year’s 19th annual Sun-day Times HSBC Top Track100 companies have been

grappling with challenges few could havepredicted. “Unprecedented” is the over-used word of the moment. It is also true.

Our league table ranks Britain’s 100biggest private companies by their salesand, prior to the outbreak of Covid-19,the vast majority were in good health.Seventy-four reported sales had risenyear-on-year to take the combined totalto £237bn — up 8%, and a record for the 19years of Fast Track’s research. Ebitda hita record of £28.2bn, up 7%, although forsome, these profits serviced significantinterest payments on combined debts ofmore than £126bn.

The health crisis that befell the UK inMarch and the dramatic economic down-turn that followed have taken their toll.

3 Greenergy £15,925mFuel supplier and forecourt operatorGreenergy has played a critical role in maintaining the UK’s fuel supply during the lockdown. It sold 20 billion litres of petrol, diesel and biofuel worldwide last year and has terminals across the UK. Customers include oil firms, fuel forecourts, supermarkets and logistics companies. Chairman Andrew Owens, 57, founded the company in 1992 and, in 2017, led a buyout backed by Canadian asset manager Brookfield Business Partners, which acquired a majority stake. Last September, Christian Flach, 52, became group chief executive and, in February, Greenergy acquired Canadian fuel and forecourt retailer BG Fuels. Its sales include fuel duty.

4 Swire £10,580mConglomerateSwire is the largest shareholder in Hong Kong airline Cathay Pacific, which reduced passenger capacity by 96% during 2020 as the global lockdown took effect, and last month raised £4bn from the Hong Kong government. The group has operated in Asia for more than 150 years, with its publicly quoted arm, Swire Pacific, listed on the Hong Kong stock exchange. It has donated millions to help the territory combat Covid-19. Barnaby Swire, 56, is the sixth generation of his family to run the group, which was founded in Liverpool in 1816. Its interests now range from shipping, property and agriculture to cold storage and soft drinks.

5 John Lewis Partnership £10,151mFood and general retailerDame Sharon White, 53, took over as chairman of this employee-owned retailer at a time of unprecedented challenge. A week before her appointment in February, the managing directors of its two divisions — John Lewis and Waitrose — had left, and were recently replaced by Pippa Wicks and James Bailey. Its staff bonus was cut to the lowest in 67 years and by March 23 all 50 John Lewis stores had shut, 14,000 staff were on furlough, and Waitrose had implemented social distancing. John Lewis began reopening its department stores from June 15, but some will reportedly stay shut. It has borrowed £300m from the Bank of England.

FAST TRACKTop Track 100 ranks Britain’s biggest private companies by their latest sales. The league table is produced by Fast Track, the Oxford firm that researches Britain’s top-performing private companies, and runs invitation-only networking events.

Details on sales, profits and staff all relate to before the coronavirus struck. We hope this Covid-19 edition recognises the impressive performance of these companies, their contribution to the economy and their responses to the pandemic.

For full ranking criteria, see page ii

Strong historic sales and profits belie expected falls this year for many, write Matt Elliott and Richard Tyler

Protecting staff and customers has beenprioritised, and many of this year’s com-panies have helped the most vulnerable,as well as NHS and other key workers. JCB(No 10), one of three companies in thetable to have secured loans of between£300m and £600m directly from the Bankof England, has distributed 35,000 freemeals in Staffordshire and a further175,000 in India, where it has three plants.

A relative newcomer, online retailerTHG (No 59), valued at £3.25bn, created a£12m aid package for the vulnerable andreserved its two Manchester hotels forthe use of police and NHS staff. Iain Fennof Linklaters details on the next page fur-ther examples of how private companieshave acted as good corporate citizens.

Such acts are evident irrespective ofownership structure. Thirty-four of thisyear’s companies are owned by privateequity firms, including Arqiva (No 73),which, to help local radio stations sur-vive, has waived payment of several mil-lion pounds of fees owed it.

Founders and entrepreneurs ownanother 34 companies, including SirJames Dyson: Britain’s wealthiest personaccording to The Sunday Times Rich List,having created a £16.2bn fortune. A fur-ther 26 companies are family-owned.

It will take time to see the full, detri-mental financial impact of the crisis onthese companies, although some havealready announced significant job cuts,such as McLaren (No 42), Clarks (No 43)and Ovo Energy (No 70). A survey by FastTrack found that 68% of respondentsanticipated a “negative” impact on salesin the current financial year, 22% feared a“very negative” hit and only 10% said itwould have no impact overall.

At the same time, with home-workingbecoming more widespread and e-com-merce booming, change is in the air.Amanda Murphy of HSBC, below,explores how Top Track 100 companiesare finding opportunity in disruption.They have shown they have what it takesto help the UK weather this storm.

Private giants dig in to battle pandemic

1 Ineos £25,000mChemicals manufacturerPlaying its part in combating the Covid-19 pandemic, petrochemicals giant Ineos built six hand sanitiser plants — each constructed within 10 days — this spring across the UK, France, Germany and America. Each is capable of producing one million bottles a month of medical-grade gel. These were distributed freely to some of the world’s hardest-hit hospitals.

Britain’s largest private company isEurope’s biggest producer of the two key ingredients used to make hand sanitiser — ethanol and isopropyl alcohol — which it redirected from industrial to medical applications to address the critical shortage during

the pandemic. Having proven a lifeline to hospitals, its plants are now also producing small, personal bottles available for sale through supermarkets.

Ineos produces 60 million tons of chemicals a year across its 183 plants, refineries and gas fields spanning 26 countries, to be used in everything from paint to insulin. It provides the chlorine necessary to keep the UK’s household water supply safe to drink; phenol, used in aspirin and paracetamol; and chemicals used in antivirals, antibiotics and Covid-19 testing kits.

Sir Jim Ratcliffe, 67, who is worth £12.15bn, according to The Sunday Times Rich List 2020, owns 60% of the company, with partners John Reece, 63, and Andy Currie, 64, each owning 20%.

Ratcliffe set it up in 1998 with a £40m buyout of BP’s chemicals division, and stunned the industry in 2005 by acquiring BP’s petrochemicals business, Innovene, for £5.1bn, placing Ineos among the world’s largest chemical manufacturers virtually overnight.

Ineos has now topped the Top Track100 for six consecutive years. It reports worldwide sales, including joint ventures, of $60bn (£48bn). However, league table companies are ranked on their sales minus joint ventures, but Ineos does not make this split publicly available. We have therefore added together Ineos’s four main entities with published accounts (Ineos Group Holdings, Ineos Enterprises, Ineos Industries and Inovyn) to arrive at our

estimated £25bn in sales and £4.4bn in ebitda for 2018.

Ineos remains ambitious, and announced last Monday that it is buying BP’s aromatics and acetyls business, consisting of 15 sites globally as well as 10 joint ventures, in a $5bn deal. It also plans to expand into China.

It sponsors Ineos Team UK for theAmerica’s Cup, the yacht sailing competition, as well as the Mercedes-AMG Petronas Formula One team, having snapped up six-times Tour de France winner Team Sky — before collecting a seventh title as Team Ineos — and two football clubs. Ineos is also designing a 4x4 off-road vehicle to be made in Wales. What will be next?

Ineos is launching a consumer healthcare business following its rapid construction of six factories making sanitiser gel, supplied free of charge to the NHS

2 EG Group £17,604mFuel forecourt operatorBlackburn-born brothers Mohsin and Zuber Issa, both 48, have donated £350,000 to hospitals in east Lancashire and offered free coffee to NHS workers using the group’s petrol stations. The pair run Europe’s largest independent fuel retailer, backed by TDR Capital, which operates thousands of BP, Esso and Shell sites across Britain and the Continent. In 2018, EG began acquiring convenience stores in America, and now owns 1,700 sites across 31 states. It also purchased 600 petrol stations from Australian firm Woolworths for £900m in 2019, and in March of this year it acquired 146 KFC outlets in the UK and Ireland. Its sales include fuel duty.

The Sunday Times Fast Track#HSBCTopTrack100

Events partner

July 5, 2020 Researched and compiled by Fast Track

BRITAIN’S BIGGEST PRIVATE COMPANIESTOP TRACK 100TOP TRACK 100TOP TRACK 100TOP TRACK 100

COVID-19 EDITIONCOVID-19 EDITIONTitle sponsor

Main sponsor

Britain’s best will embrace change and thrive againCBILS, CLBILS and CCFF, working with our customers to meet their short-term liquidity needs, sharing our insights and helping them form strategies for the coming months and beyond.

As finance directors at Top Track 100 companies will know, cashflow planning is key. They will be assessing how the lifting of the lockdown in the UK and overseas affects demand for their goods and servicesfor the rest of this year and into 2021.

They will also be lookingat their company’s capital structure, making sure that it is fit for purpose and flexible enough to allow them to respond to opportunities as they arise.

These are undoubtedly difficult times, but with change in the air, HSBC UK is confident that business leaders, such as those at the helm of this year’s Top Track 100, will rise to the challenge.

Amanda Murphy is HSBC UK’s head of commercial banking

companies found that 77% of respondents said they would allow for more home working after the lockdown was lifted. They include our customer Mott MacDonald (No 35), the international engineering consultancy, which has been investing in such agile working for the past two years.

“After the restrictions arelifted we will continue down the path of agile working, which had already started, with much more flexibility on working location,” said its executive chairman, Mike Haigh.

A second “new norm” isthe need for companies to get even closer to their customers. Life has changed for many people. Spending and saving habits have altered. Old loyalties cannot be taken for granted.

At HSBC UK, we are doingall we can to support our business customers during this crisis. This has included providing help to access the government coronavirus support schemes, including

their teams, for instance. But these can be overcome, the evangelists argue.

Home working is neithersensible nor practical for every industry. However, a poll by Fast Track of this year’s Top Track 100

permanent. Despite fears to the contrary, people working from home have remained productive. In future, significant office and travel costs can be reduced. Yes, challenges exist: how to ensure new joiners gel with

companies grow bigger, this energy can be lost. Now is an opportunity for all to rediscover and harness it.

Many of our clients in thetechnology sector tell us that the sudden shift to home and flexible working will become

Agile working: one of Mott MacDonald’s (No 35) projects is a children’s hospital in Leeds

“new norm” is emerging — one that the business community is embracing. I would like to highlight two changes in particular.

The first is that the country has found new reserves of energy in the face of adversity. The heroic efforts of our NHS and key workers, including those supporting the most vulnerable in our society, have inspired us all.

Millions of people have accepted the need for change by shifting to working from home — and making it work. Many traditional, often bureaucratic processes have been disrupted, some of which need never return. And time horizons have shortened and the pace of work picked up. For example, it took the petrochemicals giant Ineos (No 1) just 10 days to build each of its six hand-sanitiser plants constructed in March.

Such energy is more usually associated with tech start-ups, which are driven by their potential. As

As the country emerges from lockdown, the senior directors of Britain’s leading companies will be poring over their trading data and forecasts as they plan for a multitude of scenarios, any one of which may play out during the rest of the year.

Uncertainty and volatilityclearly remain watchwords, while significant challenges exist for many industries — not least aerospace, automotive, oil and gas, and leisure and hospitality. HSBC UK is working closely with its customers in these sectors to ensure that they

can access the liquidity and obtain the advice they need.

Yet in some parts of the economy, trading is almost back to normal. For example, our technology industry customers say that after an initial increase in hardware sales in March, as businesses invested to enable home working, private and public sector investment in tech and related services has held up well.

E-commerce has also continued to grow: look at the progress being made by Manchester-based THG, ranked at 59 and up from 72 last year, having broken the £1bn sales barrier for the first time in 2019. Its beauty division in particular continues to trade strongly, and the group is seeing huge growth in third-party retail demand for its technology services platform, THG Ingenuity.

It is becoming clear, however, that some areas will not return to the way things were. The pandemic has accelerated change and a

Trading remains challenging for many, but there are solid reasons to be optimistic

AMANDA MURPHY HSBC UKAMANDA MURPHY