Case study: CET

29-01-2023

Becoming a market leader in home emergency assistance – CET supports home emergency policies for one in eight UK households, providing specialist property services to the insurance sector. They are a leading provider of home emergency, drainage and subsidence investigation services nationwide.

A shared belief in growth potential – CET was founded in Castle Donnington in 1989. At the time of our investment, the business was part of a larger group, including Construction Testing Solutions (CTS).

When we met the team in 2018, we were impressed with how the company had developed under Peter’s stewardship. We saw an excellent opportunity to grow the business through a buy-and-build strategy and accelerate the investment programme through continued technological innovation.

We invested £15.8m, and Palatine partners Tony Dickin and Richard Thomas joined the board as Non-Executive Directors.

Going for growth with added value

De-merger – The business was part of a larger group when we invested. During our partnership, we supported management in formally separating the two companies, enabling us to execute two distinct strategic growth and exit plans. There were no apparent synergies or operational reasons for the businesses to remain together, so we completed a full corporate and operational separation of the company, including building a separate management team.

Performance optimisation – During our investment, the business made material improvements in all major operational KPIs, which was supported by recruiting a dedicated subcontractor network manager, who significantly improved service levels and network coverage. We also helped transition contact centre operatives to home-based working, which saved costs and allowed team members to work flexible hours.

Digitalisation – We supported the successful development of an in-house, end-to-end claims management system, Simplifi. We hired a CTO to oversee the development and rollout of the system, which generated operational KPI improvements, including reduced calls per claim and improved contribution margin. The introduction of auto job deployment sped up the time needed to resolve emergencies, enhancing the customer’s experience.

New contract wins – During our investment, CET won several contracts with major insurers, expanded existing claims volumes by 60%, and diversified into additional services such as boiler servicing. We also supported the management team in embedding an acquisition completed before our ownership.

ESG – CET made an ESG hire, which allocated dedicated resource to progressing ESG performance. An ESG committee was also established, providing opportunities for passionate and talented staff to support the business.

The business achieved a 50% carbon footprint reduction year on year through route optimisation and a regional spread of engineers and introduced a paperless office system to reduce waste generation.

CET also launched an apprenticeship scheme and piloted a programme to support recruiting and retaining people with disabilities.

The results – We made a successful partial exit from CET Group with the sale of its tech-enabled insurance claims management division to HomeServe plc for £53m. During our investment, revenues grew from £12m to £32m, and EBITDA more than doubled.

I am very proud of what the team have achieved over the past three years with their focus on our clients and their customers. The technology has become a real differentiator for us and combined with our skilled home-based staff and our professional contractors we have been able to grow significantly and scale effectively.

Palatine have been an excellent and supportive investor in CET, and we have achieved a great deal in partnership together.

Peter Eglinton

CEO of CET