Inside Newsletter - Print - March 2024

INSIDE PRINT

Business Sentiment Index

Diving into the surveyed statistics of the Print industry

Meet the Expert

Meet our industry specialist, Nick Aust, Sales Director

Welcome to Inside Print

I’m delighted to bring you the latest news from the Print business. As always, it focuses on the current industry trends and how they are affecting SMEs, whilst also demonstrating the support Close Brothers Asset Finance has offered to businesses within the industry.

We start this issue on page 3 with a piece of research which looks at how UK SMEs believe that apprenticeships could be a solution to the current UK skills gap crisis.

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 sentiment amongst Print SMEs has continued for the third consecutive research period.

On page 6, we have two case studies, the first looks at Data Mail Solutions who have been able to invest in a new Canon Inkjet Colorstream with the help of an agreement provided by Close Brothers Asset Finance. The second case study features EcoFlexibles,

one of the UK’s leading sustainable packaging firms. This Northampton based business was able to purchase a state-of-the-art Fujifilm FP790 jet press, the first of its kind to be installed outside of Japan, with the help of an agreement provided by the Close Brothers Asset Finance Print team. We pride ourselves on our ability to provide tailormade finance agreements that are suitable for individual businesses. Our teams are specialists in their field, with many having worked within the Print industry themselves. By working closely with you to understand your business, our team of industry experts see the potential for growth and can provide straightforward asset finance options to support this.

Asset finance can help businesses of all sizes get the equipment, vehicles and machinery they need. All without having to pay the full price upfront. It can be used for both new and secondhand assets, or as a way of releasing the value from those you already own.

Common examples of the asset finance products we offer include Hire Purchase, Refinance/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 8033 0744.

Finally, on page 7 we have our ‘Meet the Expert’ feature. Nick Aust is the Sales Director of our Print team. Here he discusses his predictions for the next 12 months across the industry and the favourite aspect of his role.

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

Paul Philbrick Managing Director,

UK’s SMEs believe apprenticeships are the solution to the UK’s skills gap crisis

The findings in this release are taken from the latest independent research* commissioned by Close Brothers Asset Finance and Leasing, and are in support of National Apprenticeship Week (NAW), which highlights the positive impact that apprenticeships make to individuals, businesses and the wider economy.

According to Government figures, 1.72 million employees in the UK workforce were judged by employers to have a skills gap (i.e. considered by the employer to be lacking full proficiency), an increase of 45,000 when compared to 2017. Overall, 15% of employers reported skills gaps, up from 13% in 2017.

A third of responding firms report having an apprenticeship scheme of their own, with many (58%) stating that if financial assistance was available from either the government or the private sector to help contribute towards wages and/or training, they would put someone from their company forward to participate in an apprenticeship scheme.

The National Apprenticeship Service states 96% of employers with apprentices have experienced at least one benefit from taking on apprentices, and most can count at least eight benefits. In addition, 74% of employers say that apprentices improved

products or service quality, and 78% say that they improved productivity while 73% say that staff morale is improved by having apprentices.

Steve Gee, CEO of Close Brothers’ Asset Finance’s Industrial Equipment Division, said: “As a funder of a number of sectors that rely on apprentices, we’ve long seen the need – and value - of apprenticeship schemes, which encourage new talent into industries that really need them.

“As part of our commitment to the SME community, we’ve been funding an apprenticeship scheme since 2015, in partnership with the University of Sheffield’s Advanced Manufacturing Research Centre (AMRC). Under the scheme, we contribute strongly towards the wages of the apprentices in both the first and second years, with all training costs also covered.

“The reality is, it’s not cheap for an SME to invest in apprentices – and it’s important small business owners see it as an investment and not a cost. Handled correctly, apprenticeships can help an SME flourish and at the same time develop the individual apprentice.

“I believe we all have a duty to look at where, as ‘UK PLC’, we need to concentrate our efforts and money. I would strongly encourage firms to support apprentices – we know

first-hand what a hugely positive impact they can have.”

Nikki Jones, director of the University of Sheffield AMRC Training Centre said: "At the AMRC Training Centre, we're transforming lives through apprenticeships. We combine classroom learning and shop floor industrial experience to equip new, young talent with all the skills they need to become the advanced engineers of tomorrow.

"It is crucial to invest in apprenticeships and support employers to take on apprentices to help close the huge skills gap in the industry currently. We're proud of our relationship with Close Brothers and acknowledge their constant support in delivering apprenticeships throughout the years, helping apprentices kick-star their careers."

*All figures, unless otherwise stated, are from a Censuswide survey conducted in January 2024. The survey canvassed the opinion of 907 SME owners across the UK and Ireland and across several industries on a range of issues affecting their businesses.

Sentiment among Print firms continues to improve

Close Brothers Asset Finance’s Business Sentiment Index (BSI), which measures SME business confidence, has risen modestly for the third consecutive research period, with the Print sector maintaining its upward trajectory.

BSI scores - December 2022 to January 2024

Appetite for investment

Print firms’ appetite to invest dipped slightly from a high of 82% in September 2023 to 77% in January 2024, but despite the slight dip, it is still among the highest of the sectors we track.

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

Missed opportunities

The number of companies that have missed business opportunities because of a lack of available funding continued to fall and this latest figure is in line with the more normalised levels achieved for this question, last seen in May 2022.

At 37% (Sept 2023: 48%), the Print sector’s responses are very much in line with that of the UK, as a whole.

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

Economic outlook

Confidence in the macroeconomic outlook among SMEs – including those in Print - has incrementally improved, achieving positivity for the first time in around two years, but it’s worth remembering that in November 2021, 75% of respondents were positive about the economy – by January 2024 this had reached just 46%, which is itself an improvement.

Q How would you best describe your business's economic outlook for the coming 12 months?

Predicted business performance

Reflecting the overall BSI result, predictions about future business performance rose slightly. What hasn’t changed is that most firms expect to continue treading water in 2024, with their prospects remaining unchanged.

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

Our view

Paul Philbrick, Managing Director of Close Brothers’ Asset Finance’s Print Division, said:

“The recovery in confidence, albeit cautious, among the UK’s small and medium business owners continues, is clearly positive news.However, our research reinforces the feedback we’re getting from the stakeholders in our key sectors that the recovery in sentiment very much depends which industry they operate in."

“Our commitment to the SME community is that we will continue to work with firms through the cycle, providing expert advice and building long-term relationships, as we’ve always done."

Case Study: Data Mail Solutions invests in new Canon Inkjet Colorstream

Our Print team has provided funding for long-term customer, Data Mail Solutions (DMS), to purchase a new state-of-the-art Canon Inkjet Colorstream as the firm looks to significantly boost its sales.

Based in Crawley, DMS is a print and direct mail agency, producing and delivering direct marketing campaigns, now employing around 40 people. Following significant growth over the past two years, they recently relocated to a significantly larger space to accommodate their expanding operations.

We have partnered with DMS for over 15 years, transacting multiple deals in that time. Driven by a strong business

plan and clear decision-making, they have grown their annual turnover to around £9m.

Nick Aust, Sales Director at Close Brothers Asset Finance’s Print division, said: “Data Mail Solutions is a real success story and it’s been a privilege to work so closely alongside them for so long and to witness firsthand their incredible growth over the past few years.

“This latest deal for the Canon Inkjet Colorstream will, we are confident, keep DMS firmly on their growth trajectory and we look forward to continuing to be part of their journey.”

Simon Smode, CEO at Data Mail Solutions, added: “The new Canon, along with our other investments, is opening up new markets and has allowed us to become more efficient with print and variable data being applied in one pass. Many of our customers describe us as a very safe pair of hands, which is a very nice compliment.

“I’m really pleased to again have Close Brothers Asset Finance as our funder because with their personal approach and long history in print and packaging, we know we’re working with the right supplier. They made every effort to make things as straightforward and simple as possible, structuring the deal to suit us.”

Case Study: Sustainable packaging specialist invests in state-of-the-art flexo machine

Close Brothers Asset Finance’s Print team, working with broker partner Sheppex Asset Finance, has funded a state-of-the-art Fujifilm FP790 jet press for EcoFlexibles, one of the UK’s leading sustainable packaging firms, as the firm builds out its manufacturing capabilities.

The machine – the first of its kind to be installed outside of Japanis particularly suited to short run, high-speed turnaround of sustainable packaging.

Based in Northampton, EcoFlexibles supplies eco-friendly and sustainable packaging for UK food manufacturers. Their primary markets are those where

repeat purchases are frequent and the need for packaging to present, preserve and protect the foodstuffs inside is a necessity.

Paul Philbrick, Managing Director at Close Brothers Asset Finance’s Print division, said: “EcoFlexibles is right at the cutting edge of sustainable food packaging and we are delighted to have partnered with them to fund the new machine.

“They are an experienced team with ambitious – but realistic – growth plans, who have remained profitable despite the economic backdrop.

“We worked closely with the team to understand what they wanted to

achieve and offered them a solution we felt would suit all parties.”

Arthur Cook, F.C.A., Finance Director at EcoFlexibles, added: “The new machine has accelerated our manufacturing capability and we are already feeling the benefits. It’s also meant we’ve been able to adapt to our customers’ changing habits, who are demanding smaller quantities and shorter lead times.

“We are genuinely pleased to have Close Brothers Asset Finance on board as our funder because with their personal approach and long history in our sector, we know we’re in good hands.”

Nick Aust Sales Director Meet the Expert

Nick Aust is the Sales Director of our Print team. Here he discusses his journey to Close Brothers Asset Finance and what he thinks 2024 will hold for the industry.

Briefly tell us about your role and what you do…

I am the Sales Director of the Print & Packaging team within Close Brothers Asset Finance. My role involves managing a team of 10 salespeople who are based across the UK. I work with the team to support them in providing a range of finance solutions to a wide array of both Print and Packaging businesses.

What was your journey to Close Brothers Asset Finance?

After completing my Law degree, I worked in a variety of roles in the City before moving to HSBC, based in Canary Wharf. I joined Close Brothers Asset Finance in 2007 as a Sales Coordinator which involved me calling leads and arranging meetings for the Area Sales Managers. I was then promoted to Area Sales Manager in 2009. At the time I lived in Kent but my ‘patch’ was based in the Wales/ Bristol area, meaning I was driving around 40k miles per year! In 2015, I was a mentor for the first ever Sales Academy program. This gave me good experience of mentoring and supporting other salespeople which led to my promotion to Regional Sales Manager, where I managed a team of 4 people. Finally in 2022, I was promoted to Sales Director of the Print and Packaging team. I feel the past few years have been a challenging market within our sector however we have navigated it successfully and we continue to grow as a division.

What’s the favourite part of your role?

Even though I am now in my 17th year at Close Brothers Asset Finance, to this day my favourite part of the job is sitting down with customers, listening to their business journey, and working with them to create solutions that help them thrive. I have always been relationship driven when it comes to business, and I believe this culture within Close Brothers Asset Finance is key to its success.

Outside of work, how do you like to spend your time?

A variety of things, I am a keen golfer with my handicap varying somewhere between 1 and 20, though it is usually on the upper end of this spectrum! I love skiing, my favourite places to ski include the 3 valleys and St Anton. I also enjoy travelling as much as I can all over the world, some of my highlights are the Vineyards of Stellenbosch in South Africa and the jazz bars in New Orleans.

Can you give us an example of a time where asset finance has helped one of your customers?

This is hard to give just one example as every month we help dozens of customers using asset finance. However, as a small example, 5 years ago we were able to help create a refinance facility for a business that was losing around £3m per annum due to Brexit and challenging market conditions. As a result of the finance agreement, the business was able to

lower their outgoings and raise cash. That same business today has doubled revenue and is making around £7m profit per annum.

What assets have you found are the most ‘in demand’ now?

There has been a growing trend towards people purchasing things online with home delivery. With the pandemic only furthering this trend. As a result the packaging market has grown exponentially. This means that we have seen increased demand for any packaging equipment. We have also seen increased demand for wide format presses and finishing kit for the point-of-sale market, such as large banners for retailers.

What do you think 2024 holds for the Print industry?

I think the coming 12 months will be a year of consolidation. I expect we will continue to see an increase in Management Buy Outs (MBOs). The good thing is that Close Brothers Asset Finance is well versed with these types of agreements. In the past we have often been able to help businesses with a combination of asset finance, invoice finance and term loans to help facilitate MBOs.

Our teams are specialists in their fields and experts in asset finance. Contact Nick and the team today by calling 020 8033 0744

Very simply, it allows businesses of all sizes to get the equipment, vehicles and machinery they need. All without having to pay the full price upfront.

We understand the industries we work with and we offer a choice of finance options that best suit your needs. closeassetfinance.co.uk/print Contact us today Products