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Hepworth MD Stephen Brighton: ‘I want that sense of family’

"It’s not a philanthropic thing, but I am very much aware that I employ 55 people from the local town, help to support 55 families – that is something hugely important to me.”

Stephen Brighton, the managing director of Hepworth Motor Group, was preparing to cycle from Avelin, France, to Huddersfield in aid of the Yorkshire Air Ambulance and Huddersfield Town Football Club’s charity, when AM visited.

The gruelling challenge – 282 miles in just four days – was his seventh in as many years as part of fund-raising efforts that have so far raised £1.7 million.

Brighton’s charitable work is, in many ways, reflective of the way he approaches the family business.

He said he wants the business founded by his father – Frank Brighton, who died on December 3 – to thrive, but it is clear that the ambition to grow will not threaten what he sees as a key employment provider in the area.

“My dad was the entrepreneur, but I am a manager,” said Brighton.

“I don’t know whether it is what happened to me and my family in the space of three very tough months last year or not (Brighton’s mother, Hilda, died in October), but I am very conscious of the 55 people – 55 husbands, wives and families – that we support as a business and I want that sense of family to be very strong throughout the business.

“We have growth plans. We’re bringing Mitsubishi back into the group and we are obviously pushing to improve profitability, but we have no ambition to add more brands, more franchised sites.

“My long-term ambition is to maintain a profitable business that supports a happy workforce and helps to provide for the local economy and community.”

Apart from the considerable trauma of losing both parents in such a short space of time, Brighton said his father was also an extremely influential figure in his working life.

Stephen had been completing a BSc in industrial studies at Sheffield Polytechnic (now Sheffield Hallam University) while on an apprenticeship when his father, then in his mid-40s, began to suffer from heart problems. This drew him into the business  and he took the helm in 2002.

Brighton said he often felt like he had been “playing with my dad’s train set”.

Born in Wakefield in 1940, Frank Brighton spent his entire working life in the motor trade.

Starting as a technician, he then joined Wakefield Garages – at the time part of the Thomas Tilling Group – where he rose to the position of sales manager.

“During this time he also taught at Leeds Technical College, which enabled him to start his own business,” said Stephen.

Brighton’s Car Centre opened in Featherstone in 1970 and Frank sold used cars from the site until 1981.

In 1980, he had purchased a Honda dealership in Kirkburton, Huddersfield, and began a career as a franchised retailer.

 

The silver lining in re-franchising

That near-40-year relationship has generated almost as much loyalty from Brighton towards Honda as the brand gets from its customers in West Yorkshire (Brighton said aftersales retention within the group was more than 90%, thanks to Honda’s subsidised service plans).

Even the fact that Hepworth is to lose one of its two Honda franchises, in Halifax, fails to test that loyalty.

“Cut me and you’ll find I’m Honda through and through. That remains the case now because the brand has been extremely supportive throughout the process,” said Brighton.

“Honda wanted to shrink its network by around 10% and we featured in their plans.

“Now we have the opportunity to re-franchise that Halifax site with Mitsubishi, a brand which we don’t feel overlaps with the Honda product at all, and we think we will be able to grow our market share and profitability as a result.”

Hepworth will re-unite with Mitsubishi from June 4, following an absence of 11 years, having withdrawn from the brand in Huddersfield and Bradford in 2007.

Hepworth has also experimented with other brands in the past, with mixed results.

Hepworth Group turnover graph 2008-2016 In the mid-1980s, it traded in Daihatsu and very briefly with Dacia, which was a very different manufacturer back then.

Brighton recalled that the group had Dacia cars for just seven days, after evidence of poor build quality prompted a swift change of heart.

However, he is looking forward to the return of Mitsubishi. Hepworth’s technicians are already multi-brand qualified, as the Huddersfield Honda dealership on Leeds Road also serves as an official Mitsubishi aftersales facility, already helping the group to a respectable overhead absorption figure of 70%.

Brighton said: “Like many Honda retailers, we were geared towards a UK volume of over 100,000 vehicles and the brand is doing less than half of that now.

“The result is that we have a large aftersales facility here and we were able to become an authorised Mitsubishi facility with minimal extra outlay.

“Mitsubishi never replaced us after we left the brand in Huddersfield the last time, so we’ve done well out of the aftersales side and it feels like the right time to go back.”

Another part of Brighton’s thinking is that he sees an opportunity in offering customers alternative fuel vehicles (AFVs).

Mitsubishi’s success with its Outlander PHEV and the expected arrival of a plug-in hybrid version of the Eclipse Cross compact SUV contrast sharply with Honda’s approach to alternative drivetrains in recent years, a mistake acknowledged by David Hodgetts, Honda’s UK managing director, in May’s AM.

Hepworth Group operating profits graph 2008-2016Brighton said: “It is disappointing. Honda were at the front of the hybrid curve at one point and then they withdrew right when people started to want them. I’d rather they’d have stuck with the old technology as a stop-gap at least. We have customers coming in and asking about hybrids and EVs quite a lot now.

“I’m really pleased to hear that the Urban EV is coming, but it was worrying to hear David Hodgetts say that they would probably be expensive.”

One brand that has proved a hit with Brighton and his Yorkshire clientele is SsangYong.

Brought into a former Robins & Day used car facility on Low Lane, Horsforth, near Leeds, in November 2012, the brand was the ideal add-on to a business with  a reputation as pre-owned specialists.

“It’s a site that works for us on two levels, but we’ve been really impressed with SsangYong,” said Brighton.

“It feels like it’s exactly where Mitsubishi was maybe 10 years ago. There’s a constant flow of new product and real promise in the brand.

“Volumes are down a little this year, but we sold 115 SsangYongs in our best year, 2016, and under the new management there’s less focus on tactical registrations and more on profitability, so it’s going well. There is good margin to be had from the brand.”

Hepworth Honda sold 350 new cars during 2017 and about 500 used cars.

The SsangYong site totalled 80 retail vehicles and 350 to 400 used car sales during the same period.

Always open to learning Brighton’s three younger siblings have pursued career opportunities away from the family business, and while Brighton said having “just me” running Hepworth made things more straightforward, he acknowledged that he is not as hands-on as some managing directors.

Hepworth’s management structure features three other directors – Mark Brook, a former sales executive, is sales director; Paul Walsh, who started work as a technician at Hepworth in 1988, is service and aftersales director; and Richard

Pickersgill is general manager at the SsangYong franchise and Hepworth Select used car dealership in Horsforth.

It is clear that Brighton trusts his team to steer the business.

A regular attendee at AM events, he believes it is vital to absorb as much industry know-how as possible to inform business decisions.

Brighton said too many smaller operators can be closed to wider industry trends and market knowledge that could help them improve their businesses.

“Ultimately, it is just me at the helm, but I have a great team and that means I can afford to keep an eye on wider trends and I certainly embrace good advice.

“I take some help from (former JCT600 operations director) Phil Southern and the FD Centre and I get support from the national dealer council too – people like David Cox and John Hughes. I have people to talk to and I value their advice.”

The FD Centre is a Swindon-based business that provides “affordable, experienced financial directors” on a part-time basis for businesses with a turnover of £2m-£50m.

“It’s good to have an independent perspective on our performance and longer-term strategy,” said Brighton.

Despite Hepworth Honda’s experimentation with different brands and territories neighbouring its Huddersfield heartland in the past, its turnover has remained near-static in recent years.

In its last published financial results, to the year ended December 31, 2016, it recorded an annual turnover of £18.2m, down about 3.7% on the previous year’s £18.9m and 9.5% on £20.1m in 2010 – its best result for the past decade.

Operating profits have peaked in years with a smaller turnover, however, with the £348,026 achieved in 2009, when turnover was just £16.8m, a stand-out performance.

The 2016 accounts showed an operating loss of £153,002.

Brighton conceded that the business’s turnover has been “flat” and said he was aiming to achieve a return on sales of 0.6%, but said 2018 had already delivered better profits, up by 28% quarter-on-quarter and suggested that changes in the business would once again see turnover rise.

He said: “If there was an AM250 table, we may just feature in that. Our turnover in Q1 of this year is 28% up year-on-year and we want to see that rise to north of £20m for the first time since 2010 while achieving improved profitability.”

 

Going for organic growth

Hepworth Honda is not likely to expand outside Honda, Mitsubishi and SsangYong any time soon, but that does not mean it has no plans for expansion.

The business owns a strip of land, opposite its Leeds Road headquarters, which is currently home to a display of about 12 approved used Honda cars. Hepworth was granted planning permission in January for a larger, more permanent retail site.

The group plans to demolish a two-storey residential property on a fenced-off area of land behind the current display. It will then clear the land to make way for a new used car operation, complete with its own 200 square-metre, single-storey showroom.

Brighton said: “There will be 35 to 40 cars over there and we expect it to significantly add to the profits. It’s a great site on the A62, which most people locally have to pass each time they travel into Huddersfield to shop or visit the cinema or go to a football match.”

Hepworth’s used car stock already caters for a wide range of clientele. Its cheapest offering was a £2,995 Fiat 500 at the time AM visited.

Brighton said it is far from stretched in its stocking loans and trades “on assets, not liability”.

The business has been working closely with Honda UK to refine its stocking and used car operations and features a high level of part-exchange stock – the forecourt is filled with an abundance of used Jazz hatchbacks, in particular.

Brighton said: “There has been an added focus on stocking less and turning stock more quickly and it’s been generating real results during Q1.”

In an effort to boost Hepworth’s profile, both as a used car operator and franchised retailer, Brighton is placing a greater focus on digital marketing and flexible working, which he hopes will help customers and staff alike.

The group plans to increase its presence on Auto Trader as well as working with existing website provider Autoweb Design to offer greater online functionality, and with Moneypenny to deliver out-of-hours lead management.

The business wants to guarantee servicing slots for customers within two days of an enquiry and deliver more availability to customers demanding immediate engagement at a time when staff are also keen to enjoy a more favourable work/life balance.

 

A family-friendly family business

“I’ve had a lot of cause to take stock recently, but I think it’s clear that all employees want to be able to spend more time with their families,” said Brighton.

“If we can put measures in place that mean I don’t need six sales executives in the showroom twiddling their thumbs on a Sunday afternoon – a time when the expectation might be to sell just one car – then I want to make that happen.”

The emphasis on family seems to have benefitted staff retention.

In June, Brighton will take his 10 longest-serving employees to Wetherby Race Course for the day. The group has a combined service to the business of 275 years.

Brighton believes Martin Holbrook, who has worked for Hepworth since May 1, 1969, must be “one of the UK’s longest-serving technicians”.

Tracey Swallow, a receptionist,  completed 26 years’ service on May 17 and Brighton himself has spent 33 years in the trade, despite his initial reluctance to be part of his father’s operation.

A picture of Frank and Hilda Brighton hangs in an ornate brass frame in the Leeds Road Honda dealership.

Brighton sees his business as an extension of his family and it’s easy to see why – it’s his father’s legacy.

Asked if his own son or daughter may enter the business and carry on the family business, Brighton said: “My dad was a successful businessman and one of the things he wanted to do was pay for a private education for his grandchildren.

“I’d like them to follow their own path.”

Brighton said the eventual sale of the Hepworth business was his only likely exit strategy, but said it was not something he foresaw happening any time soon, not while he remains keen to transfer his industry learning into more innovative and profitable operating practices.

Frank Brighton’s business motto was “a small firm that tries harder” and it’s clear that Stephen Brighton is doing everything in his power to continue that ethos.

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