Today BHT, or at least its social enterprise subsidiary, BHT Enterprises Ltd., has bought local PR agency Blue Rocket and its sister agency, Green Rocket. The purpose of the setting up BHT Enterprises Ltd. (it was incorporated just before Christmas) was to allow us to undertake activities not permitted under our charitable objects, but designed to make some money. The profits of BHT Enterprises Ltd. are to be gift aided to BHT to support our charitable work, such as running First Base Day Centre that runs at a loss of over £100k each year.
I am proud that BHT has had the vision to set up BHT Enterprises Ltd. given how BHT and our services users will benefit from all profits generated.
Reaction to the announcement has been mixed. Some have said that it is an imaginative and bold step to take. Others have questioned why we have done this, given that over the last year we have reduced salaries within BHT.
For example, the Brighton Argus carried the headline “Charity under fire after PR buyout” and reported that “Unions (sic) hit out at purchase following job cuts”.
There have been no “job cuts” at BHT. Not a single job was lost, nor was there any service reduction when we took action to reduce our costs last year. Nor are pensions being cut. There was a temporary reduction in the employer’s contribution last year, but as a result of the savings achieved the full pension contribution has been reinstated from April.
As The Argus itself reported, on the very same day, the delayed impact of the recession on charities presents difficult financial challenges and many are being forced to cut jobs. BHT is one of the few organisations avoiding redundancies by making reasonable pay cuts and taking positive action to increase revenue for years to come.
Charities across the UK recognise that we cannot solely rely on government contracts at a time when public spending is decreasing. The acquisitions of Hastings Community Housing Association (HCHA), Blue Rocket and Green Rocket are part of BHT’s drive to diversify our revenue and become more self-sufficient.
These purchases have been made after 6 months of consultation and due diligence. Blue Rocket and Green Rocket are much-respected profitable businesses while HCHA is a well established provider of housing and specialist support services for young people in Hastings.
Blue Rocket has been successfully trading for more than six years and unlike most companies its committed team has won more lucrative contracts in the recession due to competitive pricing and good value services. The purchase price for the two companies was well below 1% of BHT’s £9.5 million annual turnover and the charity’s cash is protected by creating the new legal entity, BHT Enterprises Ltd.
The acquisition of HCHA gives BHT £4 million of new assets and additional expertise through its work with young people.
These purchases will pay for themselves over and over again.
These developments strengthen our ability to deliver our Mission of combating homelessness, creating opportunities and promoting change amongst the most marginalised and disadvantaged members of society. I am proud of what we have done.