Transcript Hull Roadshow Presentation 2014

Finance Yorkshire
Welcome
www.finance-yorkshire.com
Finance Yorkshire
Jennie Adams - Director
www.finance-yorkshire.com
Finance Yorkshire
Why are we here this morning?
• Strengthening relationships with stakeholders,
partners, intermediaries and clients
• Demonstrating how we are working in partnership
with our LEP to support business growth
• Looking to the future
• Dialogue and questions
www.finance-yorkshire.com
Finance Yorkshire
Agenda
• Jennie Adams, Director, Finance Yorkshire
• Alex McWhirter, Chief Executive, Finance Yorkshire
• James Trowsdale, Local Enterprise Partnership
• Gerard Toplass, Frillo Ltd – Seedcorn Investee Company
• Neil Bangham & Richard Stow, Weedfree Limited – Business Loans
Investee Company
• Mark de-Villamar Robers, Envirodoor Ltd - Equity Linked
Finance Investee Company
• Questions & Answers
www.finance-yorkshire.com
Finance Yorkshire
Alex McWhirter – Chief Executive
www.finance-yorkshire.com
Finance Yorkshire
What we are…
£90m Venture Capital and Loan Fund
Finance sourced from:
£30m European Regional Development Fund
£15m UK Government
£45m European Investment Bank
www.finance-yorkshire.com
Finance Yorkshire
Our business approach…
• To fully invest the £90 million fund through helping SME’s
constrained by finance to grow
• To create a sustainable fund
• To be recognised and respected as a key participant in the
SME business and professional sectors
• To stimulate demand for finance in our key market segments
• To realise good returns for investors and value for money
www.finance-yorkshire.com
Finance Yorkshire
Our investment performance so far...
• 543 investments totalling over £67.5 million
• On track to meet economic targets; jobs created &
safeguarded; increase in turnover; business starts and
private sector leverage
• On track to achieve full investment by December 2014
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Finance Yorkshire
Investment Profile
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Finance Yorkshire
Investment Profile
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Finance Yorkshire
Investment impact...
• Created or safeguarded 6608 jobs
• Over £140 million Private Sector Leverage, resulting in
£2.12 levered for every £1 invested
• Generated £84m in increased turnover
• Legacy fund to be invested in region’s businesses in line
with original objectives - to be utilised after 2019
www.finance-yorkshire.com
Finance Yorkshire
Investment performance by location...
The Humber
LEP Area - Activity
Enquiries
Number
Applications
% of total Number % of total
Investments
Amount
(£000)
% of total
Kingston upon Hull
156
36%
37
42%
£
1,405
34%
East Riding
177
41%
39
44%
£
2,575
63%
North East Lincolnshire
47
11%
7
8%
£
15
0%
North Lincolnshire
50
12%
6
7%
£
80
2%
Total
430
100%
89
100%
£
4,075
www.finance-yorkshire.com
100%
Finance Yorkshire
Investment performance break down...
Location
Amount
Investments
Invested
(%)
£000
Amount
Invested
£000
Seedcorn
The Humber
£
450
11%
Amount
Investments
Investments
Invested
(%)
(%)
£000
Business Loans
£
2,175
53%
Equity
£ 1,450
36%
www.finance-yorkshire.com
Finance Yorkshire
Investment performance by sector...
Sector Analysis – All Funds
Application
Process (%)
Business Services
13%
Engineering / Industrial products / Materials 25%
Financial Services
2%
Healthcare / Pharma / Bioscience
12%
ICT / Software / Telecoms / Media
19%
Leisure / Hospitality
1%
Renewables / Energy / Cleantech
6%
Consumer / Food & Drink
7%
Other
16%
Sector
Investments
(%)
17%
27%
2%
5%
12%
2%
7%
10%
18%
www.finance-yorkshire.com
Finance Yorkshire
Investment criteria…
• A business with growth potential
• A new start or growing business
• A business unable to source its full funding requirement
from the commercial market
• SME’s paying business rates in Yorkshire and the Humber
or relocating to the region
www.finance-yorkshire.com
Finance Yorkshire
Three portfolios
• Seedcorn Finance
Up to £780k
• Business Loans
£15k - £250k
• Equity Linked Finance
£100k - £2m
www.finance-yorkshire.com
Finance Yorkshire
Seedcorn Finance
• Start up or early stage innovative business during the fund’s
early period, but now focussed on more mature innovate
businesses that are self-sustainable with our investment
• Based on strong and unique technology, know-how or
content that will usually be protectable
• Have potential for rapid growth and multiple returns of the
original investment
• Based in or have significant activity in Yorkshire and
Humber
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Finance Yorkshire
Seedcorn Finance
Where investment made a difference
• Carlton Manufacturing - Moved to larger premises and radically changed its
manufacturing process following Finance Yorkshire investment
• Xeros – Finance Yorkshire invested a total of £1.45 million over three funding
rounds. Market capitalisation of £80m when admitted to AIM in March 2014
• Faradion – Latest round of funding included investment from trade partner
Haldor Topsøe. The investment will enable the company to further develop
its technology as well as to do small scale production of their next
generation battery materials
www.finance-yorkshire.com
Finance Yorkshire
Business Loans
• Fixed rate loans typically between £15,000 - £250,000 as
syndicated or complete financial packages for businesses
• Financial packaging with other forms of debt finance
including the banks
• Range of investments include; Working Capital, Capital
Expenditure, Investment in Premises and development
capital
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Finance Yorkshire
Business Loans
Where investment made a difference
Green Peas Solutions - Business Loan enabled company to invest in
research and development and expand its innovative packaging range.
William Beckett Plastics – Business Loan enabled the company to do a
comprehensive refurbishment programme of three machines that mould
its range of packaging.
Broder Metals – Business Loan to assist with a move to larger
premises and to enable them to refit and refurbish the premises to
their requirements
www.finance-yorkshire.com
Finance Yorkshire
Equity Linked Finance
• Some start ups, largely growth, development capital or expansion
• Types of investment packages include:
Loans with Profit Participation - for established businesses
generating turnover of over £5m
Mix of Loan and Equity - for younger businesses with turnover of
less than £5m
Equity only Investment - for early stage businesses with
plans for rapid growth
www.finance-yorkshire.com
Finance Yorkshire
Equity Linked Finance
Where investment made a difference
 MTP Innovations - Using the £400k investment to expand its product
range and customer base
 Noel Village – Using the £750k investment to invest in new heat
treatment
 Magnomatics – Using the £1.1m (part of £2.5m package) to develop
products, create new jobs and expand its global customer base.
www.finance-yorkshire.com
Finance Yorkshire
Portfolio performance to date..
Finance Yorkshire has:
• Completed 543 investments
• Invested a total of £67.5m
Seedcorn Finance – 62 investments totalling £12m
Business Loans – 408 investments totalling £25.5m
Equity Linked Finance – 73 investments totalling £30m
www.finance-yorkshire.com
Finance Yorkshire
Our Investment approach
Working alongside the commercial market;
• Maintaining and developing relationships with financial
intermediaries to promote awareness and dealflow
• Market making effect, making deals happen by spreading
the risk with other investors and lenders
• Co-investing with other lenders and funds
www.finance-yorkshire.com
Finance Yorkshire
James Trowsdale
Humber
Local Enterprise Partnership
www.finance-yorkshire.com
James Trowsdale
Humber LEP
Investment Manager
About the Humber LEP
• Role: To attract new investment and generate growth
for existing businesses
• Area: North Lincolnshire, NE Lincolnshire, Hull & East
Riding
• Business-led
• Board of 16 provides leadership and direction
• Chaired by Lord Haskins of Skidby
• Supported by a small core staff and partners
Realising potential of Energy Estuary
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Enterprise Zones – 484 hectares
Regional Growth Fund - £66m+
Business Loan Fund - £8m
EU Structural & Investment Funds – c£87m
Strategic Economic Plan – £62m request in 15/16
Realising potential of Energy Estuary – Good
news stories since November…
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Siemens
Able Marine Energy Park
Hull – Selby line electrification
Hull: City of Culture 2017
Expansion of Assisted Areas (to cover Scunthorpe)
Enterprise Zones extended until 2020
City Deal
Growth Hub
Humber LEP Business Loan Fund
Business Loan Fund
• £8m+ allocated to the Humber through the growing
places fund
• Loan funding for stalled capital projects
• Open for applications
• Process = EOI submitted & reviewed by Investment
Board, best projects invited to submit full applications
with supporting information. Due diligence carried
out on shortlisted project. Contracts agreed.
Business Loan Fund
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Open to all businesses of any size and sector
Aim to create jobs as quickly as possible
Contribute to Humber economy
Ideally planning permission in place
Interest rate determined by EU Reference Rate
Capital projects e.g. Infrastructure & buildings
machinery
Business Loan Fund – Project Supported
Europarc Village
• £500,000 loan provided to build new access road,
drainage and utility services
• 6.5 acres of land opened up for development of hotel,
restaurants, a public house (Greene King), nursery,
gym
Business Loan Fund – Project Supported
Paneltex
• £500,000 loan provided to acquire new plant and
machinery, refurbish existing equipment and factory
enhancements.
• 34 jobs created
Growing the Humber RGF Programme
Growing the Humber (RGF3 programme)
• £30m from the Regional Growth Fund (RGF3)
• £20m - Humber wide Business Investment Grants for
priority sectors and their supply chains
• £10m - South Humber Bank Renewables Programme
• Aims to create 1500 new jobs and lever £125m of private
sector investment by March 2015.
• Additional £1m from Growth Hub bid (part of £2.5m bid)
• Complements RGF programmes in
• North Lincolnshire (£10m)
• Hull & East Riding - Green Port Hull (£25.7m)
Decision making process
• EOI submitted to Humber LEP – LEP/NELC Officer check for eligibility
• If eligible – Full application form sent
• Upon receipt of application checked by LEP/NELC Officers and
appraised by Officer group from each Humber local authority*
• Appraisal summary, application and supporting documents sent to
Investment Board *
• In principle decision made
• Contract documents drawn up by NELC
• Monitoring/claims by NELC
* Due diligence potentially requested
Business Investment Grant - Key stats
• 400+ EOIs received (250+ invited to full application)
• 150+ full applications received
• 52 projects ‘live’ - £10.1m RGF, 850 jobs, £56m
investment levered
• 22 projects in contracting
• 17 projects approved with conditions/due diligence
• Funding still available
Investment Levels and appraisal tests
• Programme Investment ratio of 1 to 4. Therefore every £50,000
grant requires £200,000 investment from other sources.
• The minimum level of grant which can be requested is £20,000
(£5,000 for renewables projects in N & NE Lincs).
• The maximum level of grant is £2.5m –most applications to be
substantially lower than this.
• The level of grant is determined by state aid rules – this depends on
location, type of business and size of company.
• Assisted Area plays key role is determining grant level
• Is the project viable and deliverable?
• Spend must be in 2014
Business Investment Grant – Burgess Pet Care
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£80,473 grant (£804,734 total project cost)
35 new jobs
Pet food manufacture
Project is to purchase and install a full packaging line offering
more efficient production
Business Investment Grant – Summerbridge
Doors
• £334,000 grant (£3,880,000 total project cost)
• 35 new jobs
• One of the UK's leading manufacturers of MDF vinyl wrap doors
and accessories
• Factory expansion from 45,000 sq ft to 83,000 sq ft.
Business Investment Grant – Cablepoint
• £21,600 RGF grant (£108,045 total project cost)
• 5 new jobs
• Manufactures bespoke cable assemblies, wiring
looms, and control panels for a variety of industries
such as Military, Medical, Automotive, Domestic and
Agricultural
• Purchase a machine that will remove the necessity to
cut and tin wires by hand
Business Investment Grant –Dong Energy
• £1.1m grant
• Supports the firm’s £11.5m plan to establish their offshore engineering and
operations and maintenance bases at the Port of Grimsby and the Royal
Dock on the Humber’s south bank.
• An estimated 100 direct jobs are expected to be created by March 2016
• Another 100 to come later as part of ongoing developments.
• More than 475 indirect jobs are set to be created in vessel and offshore
related services
Key Information
• Information can be found on www.humberlep.org and
https://www.nelincs.gov.uk/business/regional-growthfunding/employment-skills-development
• Expression of Interest template
• Eligibility Criteria
• Programme Guidance
• Contact the LEP team on tel: 01482 485260 or NELC on (01472)
325949
• Email – [email protected]
Deadline for Expressions of Interest = Monthly deadlines
Finance Yorkshire
Seedcorn Fund
Gerard Toplass
Frillo Ltd
www.finance-yorkshire.com
Finance Yorkshire
Business Loans
Neil Bangham & Richard Stow
Weedfree Limited
www.finance-yorkshire.com
Neil Bangham – Managing Director
Richard Stow – Contracts Director
1967 – Weedfree
2002 – Weedfree-on-Track
2004 – Management Buyout (Railclear)
2011 – Finance Yorkshire (FY)
Introduced to FY by Brown Butler Chartered Accountants
Initial speedy application & acceptance process
Despite tough challenges FY investment managers been
extremely helpful
Seasonal finance provided by FY in Winter/Early Spring
during 2011, 2012, 2013 & 2014
From Mid 2012 we have gone from strength to strength
2013 very successful, 2014 trading very well so far
Would highly recommend FY services to other Companies
Finance Yorkshire
Equity Linked Finance
Mark de- Villamar Roberts
Envirodoor Ltd
www.finance-yorkshire.com
presentation by:
representing:
INDEX
1.
INTRODUCTION TO ENVIRODOOR
2.
BRINGING FINANCE YORKSHIRE ON BOARD &
TIMELINE TO INVESTMENT
3.
HOW HAS THE INVESTMENT HELPED THE BUSINESS?
4.
OUR EXPERIENCE OF FINANCE YORKSHIRE
5.
OUR FUTURE WITH FINANCE YORKSHIRE
Introduction to
a privately family owned group of companies
for over 40 years
“One
of the
World’s Leading Names
in
Specialist Industrial
and
Hygienic Doors”
………. based in Hull !!
Based in Hull, East Yorkshire and operating throughout the UK and
Ireland via a network of sales and field engineers
Specializing in providing solutions, manufacture, installation & aftersales preventative maintenance of specialist industrial and hygienic
door systems
Comprehensive service and repair business throughout the UK and
Ireland with rapid response times and 91% “first time fix”
Suppliers of unique rapid action (bi-parting and vertical), translucent
stacking, sectional overhead, hygienic and cleanroom doors
Over 40 years of research & development, manufacturing expertise,
market leadership across an array of sectors offering “Tomorrow’s
Technology – Today”
Our Scandinavian subsidiary company, Interdoor AB, based in Ystad,
Sweden is one of Europe’s largest manufacturers of hygienic GRP
doors and specialist steel doors
Product Range
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Acoustic doors
Cold store doors
Crash doors
Fast action doors
Fire doors
GRP Hygienic doors
Hangar doors
Hygienic Polyethylene doors
Specialist Industrial doors
Security doors
Sliding doors
Stacking doors
Steel doors
Swing doors
Waterproof / Wet room doors
Service and Repair
Experienced and highly trained door engineers
Qualified office based administration team
24 hour rapid response emergency visits
91% “first time fix”
Comprehensive knowledge of all industrial doors
Sectors
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Automotive
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Aeronautical/Aviation
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Food & Non-Food Manufacturing
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Warehouse & Distribution
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Energy
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Emergency Services
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Film/TV/Theatre
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Healthcare/Pharma & Medical
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Leisure
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Marine
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MoD
•
Retail
Some of our Customers
WHAT WAS OUR INVESTMENT FROM
INVESTMENT
WHAT WERE THE OPTIONS?
OWNERS’ REQUIREMENTS
•
Desire to “substantially grow” the business
•
Growth was only possible with significant investment
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Not to be “endlessly” repaying debt
•
Present a well capitalised business to the market
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No personal guarantees being offered
•
A genuine belief that owning a smaller percentage of a much larger entity is
better and more secure than owning a larger percentage of a smaller entity
MAINSTREAM LENDERS?
NO!
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Debtor book already taken
•
No fixed assets of any material value
•
No personal guarantees available
Therefore, no security to offer mainstream lenders which is a requirement
INVESTMENT
In order to
raise the required finance
AND
meet our requirements
our decision was
50% Equity and a 50% Mezzanine Finance
In total: £600,000
BRINGING
ON BOARD
AND TIMELINE TO INVESTMENT
TIMELINE
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Late May 2012 – contacted FY and met with Andrew Burton and team
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End June 2012 – Business Plan and Financials submitted
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Early July 2013 – Agreement in principle reached
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Mid July – introduced to Investment Director (Ash Chopra)
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End July 2012 – FY due diligence commences
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Mid August – Due Diligence Completed (incl DD on Swedish company)
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End August – Legal Process Commences
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End September 2012 – completion of investment
HOW HAS THE INVESTMENT FROM
HELPED?
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Investment made 1 October 2012
2012 Audited Accounts:
Turnover:
£2,590,000
Net Loss:
(£30,000)
•
Significant investment at end 2012 and beginning of 2013 made in resource
and marketing (resource and strategy)
•
2013 Audited Accounts:
Turnover:
Net Profit:
Growth since FY investment:
£3,800,000
£50,000
45%
THE NUMBERS SPEAK FOR THEMSELVES!
Could we have done this without investment?
… NO
EXPERIENCE OF
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General opinion that Equity Funders seek to “control” the business
What is our experience with FY?
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Initial high level of control (lasting 3 months)
Imposition of high level reporting - different to what we were used to
Once FY had seen the business was running well – very little control
•
Quote from Envirodoor’s FY Portfolio Manager:
“This is your business, not ours. You run it in the way you want it run. I just
want to make sure that we receive a return in 5 years and that you don’t go
bust in the meantime.”
FY’s Impact on business
New reporting measures - Initially a “pain” but only because it was “new” to us
BUT, once everyone in the business were used to the reporting systems:
FY’s requirements provided the business with:
• excellent reporting systems
• new KPIs to help run the business and assist it to grow
• easy analysis of key areas of the business using “dashboards”
• made the business easier to manage
Honest Appraisal:
“FY’s input and requirements have been
a huge help to the business and not a hindrance”
OUR FUTURE WITH
Need to repay loan and give return on investment!
BUT
IN ADDITION TO THIS:
Envirodoor has ambitious acquisition plans
“£1.2million available to Envirodoor in 2014 for further growth” from FY
It is hoped and intended that FY will support Envirodoor in both its strategic
acquisitions in 2014 AND its organic growth plans
Mark de-Villamar Roberts
Managing Director
[email protected]
+44 (0) 1482 659 375
Envirodoor Ltd
Viking Close, Willerby, Hull
East Yorkshire
HU10 6BS, UK
Telephone: +44 (0) 1482 659 375
www.envirodoor.com
Finance Yorkshire
Future work…
• Work collaboratively with the Humber Local
Enterprise Partnership and Local Authorities
• Develop the Finance Yorkshire brand and a
recognised provider of growth finance to SMEs
www.finance-yorkshire.com
Finance Yorkshire
Making an application
• Call us to make sure it’s eligible 0845 649 0000 or
make enquiry via website www.financeyorkshire.com
• An Investment Manager will contact you to discuss.
• Complete Application Form & the supporting
information when advised by the Investment
Manager.
www.finance-yorkshire.com
Finance Yorkshire
Q&A
Finance Yorkshire Ltd is a company limited by guarantee (Registered No 07075478). Finance Yorkshire Ltd (0845 649 0000) comprises three sub funds,
Finance Yorkshire Equity Fund, which is managed by Viking Fund Managers Limited, Finance Yorkshire Small Loans Fund, which is managed by EV Business
Loans Limited and Finance Yorkshire Seedcorn Fund, which is managed by Enterprise Ventures Limited. Each of these Fund Managers is authorised and
regulated by the Financial Conduct Authority.
www.finance-yorkshire.com