Inside Newsletter - Print

INSIDE PRINT

2023 Issue 1

Business Sentiment Index

Diving into the surveyed statistics of the Print industry

Long-term vision for growth enabled by new printers

Close Brothers Asset Finance has provided funding for independent book and journal printer

I’m delighted to bring you the latest business news from the Print division.

As always, this issue of Inside Print focuses on the current issues affecting Print SMEs, whilst also showcasing how Close Brothers Asset Finance supports businesses within the Print industry and will continue to do so.

We start this issue on page 3, with a case study looking at a refinance deal for a Print business, who found their growth was being restricted without the release of available capital.

We pride ourselves on not only knowing about asset finance and being able to tailor suitable financial solutions, but our specialists have also worked within the industry themselves.

By working closely with businesses, our team of industry experts see the potential for growth and provide straightforward asset finance solutions to support this.

Asset finance is an alternative form of funding used by businesses to obtain the equipment they need to grow. In effect, it utilises the residual value in an asset to either pay for or put down a deposit on another piece of kit. Our experts consider all aspects of a customer’s business and then recommend asset finance solutions that best suit their cash flow and long-term goals.

Common examples of the asset finance products we offer are Hire Purchase, Refinancing (Capital Release), Finance Lease and Operating Lease.

To find out more about any of the finance options we have to offer and how they could work for your business, contact the team today on 020 8003 0744

On pages 4 and 5 you’ll find our Business Sentiment Index; our confidence tracker based on business owners’ views and thoughts on the industry. This update will look at how confidence has remained steady

within the Print & Packaging industry.

On page 6 we have a case study featuring a company who had a vision for growth which involved the purchase of new printers, these were financed by Close Brothers Asset Finance using a Hire Purchase agreement. Finally, on page 7 we have our ‘Meet the Expert’ feature. Kirstie Hulls-Smith is the Business Development Manager within our Print team. In this edition you can find out about her work history and the favourite part of her role.

We hope you enjoy the read and as always, we look forward to working with you in the future.

Paul Philbrick Managing Director, Print

Sustainability and what it means for Close Brothers

Acting sustainably isn’t a choice – it’s imperative. At Close Brothers, behaving responsibly is integral to our actions and decision-making and this is reflected across sustainability objectives we set ourselves, including:

• Supporting our customers, clients and partners in the transition towards more sustainable practices

• Reducing our impact on the environment and responding to the threats and opportunities of climate change

We are committed to meeting the goals of the Paris Agreement to achieve net zero by 2050. We are conscious that the emissions impact of the assets and sectors that we finance can contribute to climate change, and as a financial services provider we recognise the role we have to play in supporting the transition to a more sustainable future. This includes supporting our customers and partners with their own transition journeys.

Our efforts to reduce the impact of our operations on the environment continue at pace, and we strive to take actions that make a positive contribution to the world around us. Careful consideration of environmental factors and potential risks now plays an integral role in the actions we take, alongside thoughtful evaluation of where opportunities may arise for us to make a meaningful difference through our business decisions.

Today, our Renewable Energy team has funded around £1.3bn of onshore wind, solar and battery storage projects. This figure doesn’t include the smaller-scale projects, which account for another significant sum, making us an important player in the renewable finance sector.

Case Study: Refinance deal releases funds for Print business

Having growth ambitions but being unable to realise them because of a lack of available capital is a problem many firms face. Find out how the Print team at Close Brothers Asset Finance used a refinance

deal to help

their customer…

Customer background

Our customer is a print and signage specialist - over the past few decades they have grown to become one of the largest in their sector in the UK, providing both printing and packaging services to various key industries.

Opportunity

One of our customer’s primary sectors had experienced significant recent growth and an opportunity to introduce more sustainable packaging was identified.

A number of reasons required them to bulk buy to ensure a minimal impact on production timings while also meeting their expansion plans.

We met with the customer to understand their needs and look at options to ease cashflow while releasing capital into the business to make the necessary purchases.

Solution

A refinance deal to settle an existing agreement was proposed, which also raised significant capital. The refinance deal also took into account the value of a printing press the business already owned.

Outcome

Through refinance, our customer was able to maximise the value of their high value asset back into the business, giving them extra cash flow to help with their growth plans

Adam Baldwin, Area Sales Manager, said: “It was a pleasure to work with them to free up cash flow from their current assets, which helped with their growth and expansion plans. I look forward to helping them and other firms grow in the future.”

Customer quote: “When we asked Adam for an extra cash injection to help with the uplift in raw material costs he was able to see the opportunity to restructure the existing agreement against our Heidelberg Press to release the capital and maintain payments at the current level. This has enabled us to manage outgoings to a level allowing us to re-invest in new equipment in the new year to continue our expansion and growth.”

confidence remains steady for Print & Packaging

Business sentiment across all key sectors – bar Print & Packaginghas continued to subside – although not as dramatically as was seen between March and April last year.

Our data reveals that over the past year, positivity has fallen significantly from record highs to levels not seen since the first lockdown – and what we are seeing for the first time is the sectors aligning around a smaller spread of figures than we usually see; it’s clear the pain of the rising cost of doing business, recession, interest rate rises, energy prices and inflation is being felt across all industries.

According to our research, Print & Packaging business owners’ top five concerns were:

1: Energy costs

2: Inflation

3: Interest rates 4: Materials supply 5: Cash flow

Skills shortages and energy costs were seen as the largest inhibitors of growth for the UK’s Print & Packaging SMEs. This runs counter to other sectors, whose primary concern is the cost of energy.

Business sentiment index – December 2022

How the sectors have fared

The Print & Packaging sector BSI remained very consistent and did not see the level of falls suffered by other sectors.

Appetite for investment

On a positive note, over four fifths of Print & Packaging firms are still looking to seek funding for investment in the next 12 months, up from July’s 79%.

Q Does your business plan to seek funding for business investment in the next 12 months?

Missed opportunities

The number of Print & Packaging companies missing business opportunities due to a lack of available finance was the highest of the sectors tracked, at 51%. With pressure on cash flow, most ambitious businesses rely on additional finance to enable them to invest in growth.

QHave you missed a business opportunity in the last 12 months, due to lack of available finance?

Economic outlook

Business owners are, unsurprisingly, more negative than positive about the macro-economic outlook and it’s this indicator that has contributed most to the decline in the BSI.

Predicted business performance

Predictions about future business performance is largely unchanged, except in Print & Packaging, where expansion expectations nearly halved from 34% in July 2022 to just 19% in December of the same year.

Score calculation

QIn general, how do you expect your business to perform over the next 12 months?

The BSI is based on the views of 900 business owners and senior members of the UK’s business community and calculated from data charting their:

• Appetite for investment in their business in the coming 12 months

• Access to finance and whether they’ve missed a business opportunity through lack of available finance

• Views about the UK’s economic outlook

• Thoughts on their likely performance in the coming 12 months

Case Study: Long-term vision for growth enabled by new printers

Trust and loyalty are the hallmark of any good funding partnership, with support provided throughout the economic cycle.

Despite many of their competitors struggling to adjust to changing demands, our long-standing customer was going from strength-to-strength, this is how the Print team at Close Brothers Asset Finance helped them grow.

Customer background

Our customer is an independent book and journal printer, supplying high quality products across the UK and servicing many hundreds of their customers by printing major publications for them.

They have been investing heavily over the last few years, including through acquisition.

Opportunity

Our customer wanted to purchase two new large-format presses that would allow them to

increase their capacity and play a key role in meeting current and future demand.

Solution

Following a series of meetings, funding was agreed for the two machines, utilising standard Hire Purchase (HP) terms.

Outcome

The two machines were delivered on time and have already made a huge difference, driving our customer to new levels of both service and delivery.

According to our customer, they bought the machines to make everyone’s lives easier and are already saving a great deal of time because they’re in the fortunate position of getting busier and busier.

They also stated that they wanted to work with a funder who understood their business and was able to react quickly, while also providing expert advice and offering deals that work for all parties, and thanked the Close Brothers Asset Finance team for their help and support.

“Given our strong working relationship, it made sense for us to work together with them on acquiring these two new presses. They knew what they wanted to achieve, and had clear goals; being their financial partner continues to be exciting, and dealing with them remains a pleasure,” said Nick Aust, Sales Director of the Print team.

Meet the Expert:

Kirstie Hulls-Smith Business Development Manager

Kirstie Hulls-Smith is a Business Development Manager and industry specialist within the Print team. Here she shares her journey to Close Brothers and the favourite part of her role.

Tell us about your role and your current responsibilities…

My current role involves me proactively building the number of prospects and calling those prospects. I also follow up on any campaign activity across the team. A big part of my role is building relationships with both internal and external customers.

What was your journey to Close Brothers?

I worked as a Halm Jet Press Operator in the print industry for over nine years. I worked for different print companies but, unfortunately, I was made redundant from my last job in 2015. I decided that a change was needed, so I moved to work for a charity that supported older adults with learning disabilities, after this I went to work for the NHS.

I then received a call to go and meet Roger Aust in 2019 to discuss a role as a Business

Development Manager within the Print team at Close Brothers and the rest is history.

What is it about working for Close Brothers that is different?

One of the differences I’ve found working at Close Brothers is that I’ve had the opportunity to work on several projects with colleagues. These projects are currently in testing or have already been implemented. I never thought I would be given the opportunity to do other things like projects, which has built up my confidence a lot.

What’s your favourite part of your role?

I find the best part of my role is that I never know what one day will be to the next, the variety keeps things interesting!

Give us an example of how you’ve helped a customer…

I recently had a potential customer who

was having an issue that they needed help with. The best way I could help was listening to their issue and discussing how we as a business could help. I was then able to give them detailed information on how Close Brothers could assist with their issue, giving them an idea of a way forward.

Tell us one thing people may not know about you…

A thing people may not know is that I have done several charity events in the past to raise money for Alzheimer’s research. This is a cause close to my heart as it has impacted members of my family.

Our teams are specialists in their fields and experts in asset finance. Contact Kirsty and the team today by calling: 020 8003 0744