Bestowing a special recognition award to a personality who many in the room at the Forecourt Trader Awards ceremony might not be familiar with might not seem an obvious choice. But there are many reasons that Nakendram (Theepan) Piratheepan, founder of 31-site operator Sterling Petroleum, was chosen by a group of 11 judges to succeed industry legend Sej Sejpal of Platinum Retail as the winner of this prestigious category.
Piratheepan, who is also a commission operator for nine petrol stations, has been quietly building his network over the past six years – acquiring underperforming or closed sites that nobody else wanted. He has a progressive business model, in which he leases such businesses with an option to buy the freehold at a pre-agreed price.
His ambition is to increase from a £5m profit on a £100m turnover, to a £100m net profit in the next five to 10 years. This, he hopes, will be with a private equity backer on board, although he maintains: “I am in no rush for anything at the minute.”
But the quality that impressed the judges most was Piratheepan’s commitment to share opportunities with those on the journey with him. In fact, over this time, he has helped tens of his staff to become commission operators, removing for them barriers that he faced when he tried to make the jump from store manager to running his own site.
As well as running a performance linked bonus scheme tied to annual reviews, when the group disposed of five sites Piratheepan shared a percentage of the profit with his employees.
And his generosity extends further. He donated £100,000 to the charity Pennies earlier this year, with a commitment to continue putting aside 10% of his net profits to good causes in what he sees as “a social responsibility to share some of what we make”, arguing that “We take what we need first, then give to society”.
So who is Piratheepan? He is 40, and lives near Cardiff with his wife and four-year-old son. He moved to the UK from Sri Lanka in 2008 to study finance in Bristol. At that time he took a job as a cashier at a petrol station, where he was promoted to store manager. Eventually in 2014 he became a contract manager, now termed as a commission operator, for Rontec.
In 2019 he met Sajikumar – Saji – Muthiah, going on to purchase his first site, Mid Glamorgan Service Station, in 2020 with his business partner at the time. And that was the start of Sterling Petroleum, which now employs more than 300 people.
The business partners – often still seen at events together, continued building their empire until the spring of this year, when their ambitions to be independently successful saw the pair go their separate ways in an amicable split that saw Muthiah take 10 of the sites to set up his own company Atlas Retailers.
The formula for the success of Sterling Petroleum is to appoint commission operators at almost every one of its sites. But Piratheepan’s approach is slightly different. Initially, when the business takes on a site it employs its own staff, identifying the most promising and then training them to run it.
Sterling operates the site directly through that manager for a year or two, before setting them up as a commission operator in their own right. In so doing, it loans them the shop stock rather requiring them to finance it outright, removing one of the biggest barriers commission operators face when taking the leap from employee. Theepan has created 20 small-business owners this way.
Over the years, Piratheepan says he has learned from the best, gaining insights running sites for Rontec’s Sir Gerald Ronson and Platinum Retail’s Sej Sejpal. It is experience that helps him turn his own forecourts into thriving, community-focused businesses, with investment, operational improvement and long-term vision.
Some 18 of his 31 sites are leased. He focuses on mid-tier fuel brands, with 10 Gulf and 10 Murco sites, six Morrisons Daily, and 20 Londis shop fascias. He says that staying loyal to the fuel brands was repaid with the partnerships opening doors to more sites, so that “Sterling and its suppliers grew together”.
Using debt capital raised against the trading performance, to improve his acquisitions, Piratheepan was able to quadruple fuel volumes and increase shop turnover fivefold at some locations. That first derelict site he acquired, Mid Glamorgan Service Station, for instance, grew to a volume of 3.5mlpa of fuel, and a weekly shop turnover of £30,000, before he sold it to Platinum Retail.
While each development has different priorities, when it comes to site makeovers, Piratheepan generally puts valeting high on the agenda, along with a new 24-hour shop with the right offer and off-licence, and super grade fuel. He then installs a commission operator “with a genuine stake in the outcome”. When looking for sites, his preference is for locations with space for a car wash or jet wash, and a minimum 2,000sq ft store.
Once he has created value in sites he has been in a strong position to sell. “The risk is all taken at the front end,” he explains. “Taking on closed sites that the rest of the market had written off, and backing ourselves to trade them back to life, is where the exposure sat,” he says.
“Because the option price was fixed at the start, every pound of that uplift accrued to us. By the time we came to exercise, the freehold was worth a multiple of the option price, because it was now being valued off the trading business we had built rather than off an empty forecourt.”
But the really clever part comes at the end. Piratheepan finds a buyer for any leased site he wants to sell before exercising the option to buy, with solicitors timing both legs of the transaction to complete back-to-back on the same day. It means the business is never required to fund the freehold purchase out of group cash or draw on facilities to do it.
Piratheepan will undoubtedly become a face that more people with recognise at events in coming years. He appreciates that with success comes greater exposure and while he may not be able to operate under the radar any longer, he is grateful for being recognised for his achievements in the Forecourt Trader Awards.
As the nominee explained in their entry for Piratheepan to be considered for the Special Recognition Award: “His contribution to the forecourt and retail industry has been exceptional, not only through his own hard work and commitment, but through the encouragement, guidance and opportunities he has given to others. He has helped bring people up within the industry, sharing his knowledge and supporting those around him to grow, progress and succeed. His impact is felt by many, and I believe he is truly deserving of this recognition.”
