Transcript www.finance-yorkshire.com

Finance Yorkshire
Welcome
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Finance Yorkshire
James Newman - Chairman
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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
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Finance Yorkshire
Agenda
• James Newman, Chairman, Finance Yorkshire
• Alex McWhirter, CEO, Finance Yorkshire
• Neil McLean - Leeds City Region LEP Chair
• Seedcorn Case Study – Chris Hanson, Xeros
• Business Loans Case Study – Sam Moss, Leeds Brewery
• Equity Linked Finance Case Study – Philip Crick, The Black
Hole
• Questions & Answers
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Finance Yorkshire
Alex McWhirter - CEO
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Finance Yorkshire
What we are…
£90m Venture Capital and Loan Fund
Finance sourced from:
£30m European Regional Development Fund
£15m Yorkshire Forward/Business Innovation and Skills
£45m European Investment Bank
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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
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Finance Yorkshire
Our investment performance so far...
• 338 investments totalling over £37 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 impact...
• Created or safeguarded 5620 jobs
• Over £64 million Private Sector Leverage, resulting in £2
levered for every £1 invested
• £44.2 million in value added sales
• Legacy fund to be invested in region’s businesses in line
with original objectives - to be utilised after 2019
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Finance Yorkshire
Investment performance by location...
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Finance Yorkshire
Investment performance by location...
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Finance Yorkshire
Investment performance by sector...
Sector Analysis – All Funds
Sector
Application Process (%)
Investments (%)
Business Services
12%
18%
Engineering / Industrial products / Materials
24%
25%
Financial Services
1%
1%
Healthcare / Pharma / Bioscience
14%
7%
ICT / Software / Telecoms / Media
21%
12%
Leisure / Hospitality
1%
2%
Renewables / Energy / Cleantech
6%
7%
Consumer / Food & Drink
6%
10%
Other
15%
18%
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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
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Finance Yorkshire
Three portfolios
• Seedcorn Finance
• Business Loans
• Equity Linked Finance
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Finance Yorkshire
Seedcorn Finance
• Start up or early stage innovative businesses
• Involves strong technological ‘know-how’ and credible
founders
• First products or services developed with potential for rapid
growth
• Can invest up to £780,000 over the lifetime of the business
through equity-based, tranched investments
• Investments of £2m+ when syndicating with other funds
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Finance Yorkshire
Case Study – Carlton Manufacturing
 Start up that develops sustainable
construction materials
 £675,000 Seedcorn Fund investment
 Company moved premises and expanded
workforce as a direct result of investment
 The company has rapidly growing revenues
and has plans to develop new products
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Finance Yorkshire
Business Loans
• Fixed rate loans typically between £15,000 - £150,000 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
Case Study – Silchrome Plating
 Offers a wide range of metal finishes
and treatment processes to
engineering, aerospace, defence, oil
and gas industries
 £60,000 Business Loan to help them
install new processing lines and
increase production
 Plan to grow the business and
increase the workforce
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Finance Yorkshire
Equity Linked Finance
• Equity-linked investments from £100,000 to £2m and
Mezzanine loans
• Some start ups, largely growth, development capital or
expansion
• Work alongside other finance providers to invest in larger
transactions
• Tailored deal structures to give maximum benefit to the
investee companies
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Finance Yorkshire
Case study - Silentair
 Offers a design, manufacture and
installation service for its ‘super quiet’
and energy efficient air conditioning
units.
 £525,000 Equity Linked investment to
be used to enhance market
penetration, and secure further IP
protection
 Looking at overseas opportunities
including Europe and Asia
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Finance Yorkshire
Portfolio performance to date..
Finance Yorkshire has:
• completed 338 investments
• Invested a total of £37.22m
Seedcorn Finance – 42 investments totalling £7.50m
Business Loans – 267 Investments totalling £14.92m
Equity Linked Finance – 29 Investments totalling £14.80m
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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
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The Leeds City Region LEP
Neil McLean
Leeds City Region LEP Chair
The Leeds City Region
Functional Economic Area
3m population
106,000+ businesses
£54 billion economy
5%+ of UK GVA
1.2m+ homes
Priorities
1: Unlocking the potential of business and enterprise
2: Enabling a flexible, skilled workforce
3: Facilitating a low carbon economy
4: Creating the environment for growth
Focus for Growth
• Life sciences\meditech\biotech
• Digital and creative
• Advanced manufacturing
• Financial and business services
• Low carbon\energy
Finance
• £20m Business Growth Fund
• £36m Growing Places Fund
• Regional Growth Fund –£70 million obtained by private
sector projects rounds 1 to 3
• City Deal: £1bn transport fund= 20,000 jobs
• City Deal: £400m investment fund
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Working with Finance Yorkshire
• Co-investment for businesses projects
(Business Growth Programme grants /
Finance Yorkshire Loans)
• Signposting
• Cross reference of applications
• Co-promotion and marketing
• Advice on project appraisal
Business support
• Developed a comprehensive platform for business
support (see http://business.leedscityregion.gov.uk)
• Trade and investment and apprenticeship campaigns.
• LCR wide Planning Protocols for major applications 'single front door‘
• Super-Connected Cities: £10-14m secured from Gov't for
ultra fast broadband - This will benefit 88,000 homes and
over 16,000 businesses
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Future plans
• Regional Growth Fund Round 4 – endorsing
applications, seeking additional funding for Business
Growth Programme
• Continue negotiations for further devolution
• Deliver streamlined approach to investment
• Centralise investment funds in one pot
• Attract investment and increase exports
• Increase apprenticeships, mentoring and building links
with education
• Bridging the gap between skills shortage and the jobs of
the future
How to stay in touch
@leedscityregion
/leedscityregion
www.leedscityregion.gov.uk
Thank you
Finance Yorkshire
Seedcorn Fund Testimonial
Chris Hanson - Xeros
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Xeros Limited – The power of Polymer Bead Cleaning
• Formed in 2007
• Over £16m invested to
date
• 20 scientists and
engineers
• First product designed
and proven for launch
(inset)
• Presence established in
the US
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Xeros experience of Finance Yorkshire
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Investments by Finance Yorkshire in Xeros
• Oct 2010, Dec 2011 - £300k as part of a £3.5 million fundraising
• March 2013
- £400k as part of a £10 million fundraising
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SYIF investments in Xeros
• June 2009
- £250k as part of a £920k fundraising
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State aid, so certain requirements
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Process
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Ongoing support
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Overall impression
Finance Yorkshire
Business Loans Testimonial
Sam Moss – Leeds Brewery
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Equity Linked Finance Testimonial
Philip Crick, The Black Hole
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The Black Hole
Finance Yorkshire roadshow – Queens Hotel, Leeds
20th March 2013
A few facts about The Black Hole…
A direct response advertising agency, focused on results
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Steeped in DM and Digital experience - fanatical about the numbers for
more than 22 years
Independently owned – clients come first
Proven track record - established in 1991, currently a team of 27
Award winning
Have launched 40% of all US credit card entrants into the UK, including
MBNA
Some of our clients…
The Finance Yorkshire process – for us
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Introduced by a financial consultant
Prepared a detailed 3 year business plan
− History
− Objectives
− Reasons for investment
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Presentation to Finance Yorkshire
− Detail on the business and team
− Questions
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Official application and form filling
Appointed an Investment Manager to assist us through the process
Due diligence
Signed the contracts
Got the money
5 Months
Other outcomes
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Made us look in detail at our future plans and requirement for investment
Business questions from Finance Yorkshire highlights areas not previously
thought of
Creates good business practice – reporting, board meetings
Can bring useful contacts and learnings
Confidence boosting
Would we do it again?
Everyday of the week and twice on Sundays!
Thank you
Finance Yorkshire
Future work…
• Work collaboratively with the Leeds City Region LEP and
Local Authorities
• Creating the next gap fund for SMEs after 2014
• Develop the Finance Yorkshire brand and a recognised
provider of growth finance to SMEs
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Finance Yorkshire
Making an application
• Call us to make sure it’s eligible 0845 649 0000 or make
enquiry via website www.finance-yorkshire.com
• An Investment Manager will contact you to discuss.
• Complete Application Form & the supporting information
when advised by the Investment Manager.
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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 Neon Capital Partners 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 Services Authority.
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