Inside Newsletters - Print - September 2023

INSIDE PRINT

Business Sentiment Index

Diving into the surveyed statistics of the Print industry

Meet the Expert

Meet our industry specialist, Ryan Coughlan, Regional Sales Manager

2023 Issue 2

Welcome to Inside Print 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 piece looking at Print SMEs attitudes to funding. A key finding from this survey is that nearly half of Print firms are not aware of asset finance, meaning many haven’t unlocked the benefits this can bring.

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.

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.

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 the cautious return of confidence for Print and Packaging SMEs following

the challenges of rising inflation, increasing energy costs and higher interest rates.

On page 6 we have a case study featuring Inspired Print who were able to grow their business with the purchase of a new SignRacer, this was financed by Close Brothers Asset Finance using a Hire Purchase agreement.

Finally, on page 7 we have our ‘Meet the Expert’ feature. Ryan Coughlan is a Regional Sales Manager and industry expert within 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, Print

Close Brothers Asset Finance launches 4th Sales Academy Close Brothers Asset Finance is delighted to announce the return of its highly successful and industry-leading Sales Academy, which is designed to attract new and diverse talent into the sector from across the UK. There are six positions available in this year’s Sales Academy, and in keeping with previous criteria, experience in finance or sales is not a prerequisite. Close Brothers Asset Finance is looking to attract enthusiastic candidates from a range of backgrounds who want to build a successful career in sales and become specialists in one the many sectors the funder supports, including Renewable

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Energy, Engineering, Print and Agriculture.

Steve Gee, CEO of Close Brothers Asset Finance’s Industrial Equipment division: “We are very proud of our specialist business model and want to build on the outstanding success of the first three Sales Academies, which has seen many of the previous ‘graduates’ fully integrated into the Asset Finance and Leasing sales teams and leading very successful careers in their chosen sectors.”

“This is an incredible opportunity to be trained by an industry leader and mentored by an experienced Sales Manager for 'on the road' training. Following their training

period, successful applicants will concentrate on building a customer base, territory and business plan, with full assistance from a mentor.”

Attitudes to funding At Close Brothers Asset Finance we regularly survey business owners in the sectors we fund, including Print.

Taken from our latest survey, in this piece we focus on attitudes to ‘funding’, finding out, for example, if firms are planning on seeking funding, and if they’re confident about getting access to the loans they need to grow their business.

A key finding is that nearly half of Print firms are not aware of Asset Finance, meaning a large number still haven’t taken advantage of the many benefits to be gained from leveraging value from their existing assets.

Access to funding

Cost of borrowing

Nearly a quarter of Print business owners say getting access to funding is a ‘major challenge’ and more difficult now than it was a year ago.

The increases in the cost of doing business has had a major impact on businesses in all sectors, including Print.

60% 28% 82% 48%

tell us it’s a ‘moderate challenge’ and as difficult now to access finance as it was a year ago.

admit to having been declined access to finance by a bank in the last six months.

of Print firms, despite the challenges are planning on seeking funding for investment in 2023.

have missed a business opportunity in the last 12 months because of a lack of available finance.

Interestingly, 44% of Print SMEs are confident the economy will grow in the coming 12 months, against 54% who expect a further slowdown of economic activity. The rest anticipate no change.

62%

have seen an increase in their cost of borrowing.

42%

of Print SMEs have switched funders because of increased interest rates.

58%

have considered alternative forms of finance because of increased interest rates.

36%

of those surveyed think interest rates have peaked.

Unfortunately, 56% of Print respondents to our survey have had to increase their prices to cover the increased cost of borrowing.

For more industry insights, please visit closeassetfinance.co.uk

closeassetfinance.co.uk

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Cautious return to confidence for Print and Packaging SMEs Close Brothers Asset Finance’s Business Sentiment Index (BSI), which measures SME business confidence, has risen for the first time since September 2021 following three consecutive falls, and a low at the end of 2022. These were caused, in the main, by rising inflation, energy cost increases and higher interest rates.

Despite the headwinds still being faced by small and medium-sized firms and inflation stubbornly remaining in double digits, wholesale energy prices have fallen from their summer 2022 peaks, and there appears to be more certainty about where interest rates rises are headed, all of which is helping firms plan with more assurance.

This change in confidence is better understood when looking more closely at Print and Packaging businesses’ priorities, which are achieving growth (33%; UK: 28%) and managing costs (16%; UK: 26%), followed by paying down debts (14%; UK: 9%) and investing in staff (14%; UK: 14%).

BSI scores - June 2020 to May 2023 Research Date

BSI Score UK

BSI score Print and Packaging

May-23

20

20.25

Dec-22

11.5

12.5

Jul-22

14.25

12.75

Appetite for investment Overall, the appetite to invest remains strong, as it was at the end of 2022, with 78% (UK: 75%) of Print and Packaging firms looking to seek funding for investment in the next 12 months. your business plan to seek funding Q Does for business investment in the next 12 months?

UK Print & Packaging

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Yes

No

May-23

75%

25%

Dec-22

76% 24%

May-23

78% 22%

Dec-22

83% 17%

Missed opportunities The number of Print and Packaging companies that have missed business opportunities because of a lack of available funding stands at 45% (UK: 45%) in May 2023.

While this is an improvement, these are historically ‘high’ figures – for example, in May 2022, 37% of UK respondents answered ‘yes’ to the question ‘have you missed a business opportunity in the last 12 months, due to lack of available finance?’.

It would appear businesses are concerned about impacting their cashflow by dipping into their reserves or taking out a standard loan and adding to their debt burden. you missed a business opportunity in the last 12 Q Have months, due to lack of available finance?

Yes

No

UK

45%

55%

Print & Packaging

45%

55%

Economic outlook Print and Packaging businesses are more negative than positive about the macro-economic outlook, and compared to the end of 2022, firms in the sector are slightly more optimistic than they were.

This indicator has contributed most to the decline in the overall BSI; for example, in November 2021 75% of respondents were positive about the economy – by December 2022 this had fallen to just 36%.

Confident economy Concerned will grow economy will slow UK

There won't be a significant change

May-23

43%

46%

11%

Dec-22

36%

55%

9%

Score calculation 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

closeassetfinance.co.uk

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Case Study:

Print business grows with funding for new equipment

Inspired Print Solutions was founded in October 2020 by Paul Romney. Paul has a lot of experience in the print industry and has long standing relationships with many clients stretching back 25 years. Since its inception, the business has become renowned for its quality and service, all whilst providing innovative solutions.

A growth requirement In May 2022, the business moved into new premises in Bingham to meet the growing demand for their services. With this growth, Inspired Print Solutions found it necessary to purchase extra equipment, including a SignRacer 2512 Flatbed High Bridge printer.

In order to purchase the SignRacer, Paul approached Matt Brown, area sales manager with Close Brothers Asset Finance for a funding solution. Matt had worked with Inspired Print Solutions on several finance agreements, so he understands the business well.

The perfect product Matt put together a proposal which utilised a Hire Purchase agreement to purchase

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the new SignRacer. Hire Purchase means the business can spread the cost of their investment into manageable monthly instalments, this will help the business manage their cashflow.

Continued growth As a result of the agreement with Close Brothers Asset Finance, the business was able to acquire the SignRacer in a timely manner. The new printer, which is the first of its kind in the UK has meant that Inspired Print Solutions have been able to expand their capabilities, continuing their holistic approach to client solutions.

Matt commented: “We have built a strong working relationship with Paul at Inspired Print Solutions. I’m glad that on this occasion we were able to help the business fund the new

printer. I look forward to working with Paul again in the future and seeing his business continue to grow.”

Paul Romney, Managing Director, Inspired Print Solutions: "Since we began trading in 2020 our business has gone from strength to strength thanks to our partnership-led approach and constant innovations. I’m pleased to see our customer base continue to grow and I’m grateful for the help of Close Brothers Asset Finance in funding the new SignRacer. I would look to work with Matt and the team at Close Brothers if I required finance again in the future."

Contact the team today by visiting closeassetfinance.co.uk/print

Meet our industry specialist

Ryan Coughlan Regional Sales Manager Ryan Coughlan is a Regional Sales Manager and industry specialist within our Print team. Here he discusses the favourite part of his role and his predictions for the sector over the coming 12 months.

Briefly tell us about your role and what you do…

What’s the favourite part of your role?

My current role is Regional Sales Manager within the Print team, I manage a team of Area Sales Managers whilst also looking after my own customers. A large part of my role involves building my network of customer relationships across the UK, providing them with asset finance solutions. I spend a lot of time on the road visiting customers, being able to meet face to face works really well as it really helps us to understand their business needs, we can look at their biggest hurdles and pinch points so we can provide a tailor-made facility. I also spend a lot of time building relationships with industry contacts to continuously understand the changes in the Print industry. This also allows me to gain knowledge on new assets and new technologies which can both benefit and impact our customers.

The best part of my role is being able to immerse myself in an industry which has such a diverse range of businesses, from large entities or small SMEs to long standing family run business with vast histories. I have had the pleasure of meeting many incredible business owners, this has allowed me to see first-hand the day-to-day successes and challenges faced when running a business in these sectors.

Creating long-standing relationships where you assist customers on their growth journey is a very rewarding experience.

What was your journey to Close Brothers Asset Finance?

I started with Close Brothers after finishing my A-Levels, joining the Aspire school leaver programme in January 2014. The Aspire programme gave me the opportunity to work in various divisions of the bank, gaining experience in different departments. Following this, I began a sales support role in the print and packaging team, shortly after I joined the Close Brothers Sales Academy in 2017. I was an Area Sales Manager for 6 years before starting my current role as Regional Sales Manager. As I look toward 10 years at the bank in January 2024, I look back on my journey with a great sense of pride and gratitude thanks to the bank always encouraging internal progression and selfgrowth.

Give us an example of a deal structure that demonstrates how you can you help a customer We recently assisted a fast-growing specialist packaging company who were investing heavily into their production facilities. The investment requirement arose due to an increase in revenue the business was experiencing both during and after the pandemic. However, the fast growth not only required a large capex investment to improve overall efficiencies and output improvements, but the business required a large amount of forward buying stock, this would reduce costs and alleviate cash reserve pressures later in the year. Given that the business experienced seasonal revenue spikes due to the nature of their products, we were able to provide a flexible funding product with a ‘seasonal’ payment profile. This was done whilst also raising equity from their existing unencumbered machinery through a refinance agreement, this allowed the business to raise the cash to purchase stock upfront. These two facilities not only provided a solution to the business but were tailored to their needs,

protecting cash reserves, and matching their seasonal cash flow trends. This is just one example of where Close Brothers Asset Finance has provided a tailored facility to suit the customers specific business needs.

What are your top 2 predictions for your sector in the coming 12 months?

A large challenge many will face is inflation, the aftermath of the pandemic has resulted in rising costs of materials, energy bills and rent rises.

Inevitable cash flow has been a common topic for many businesses over the last year, which is where Close Brothers Asset Finance can assist with the many products we have available for SMEs. However, these challenges have resulted in businesses becoming more cost focused.

For some this has resulted in a need to invest to further increase efficiencies on their production, replacing older technologies with new to combat these pressures. For others, the need to streamline and restructure has forced changes and a new direction of focus for many. I see this continuing over the next 12 months.

We have also seen a trend in mergers and acquisitions within the industry as some businesses seek to consolidate and restructure.

However, for many others there has been a change in direction with regards to the products they produce. With wide format and packaging sectors displaying a lot of growth we have seen many of our traditional print customers diversify their portfolio to enter these growing markets whilst maintaining their original. This has led to many businesses investing in newer technologies and providing a wider range of printing capabilities. I would expect this trend to continue over the next 12 months.

closeassetfinance.co.uk

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SUPPORTING THE UK PRINT INDUSTRY WITH ASSET FINANCE With specialist industry knowledge and tailor-made support, we offer a range of finance options which can: • Unlock the value of your existing assets • Let you invest in new equipment • Create positive cash flow for your business

Contact us today, we’re here to help closeassetfinance.co.uk/print

Products and services are subject to eligibility, status, terms and conditions and availability.

All lending is subject to status and our lending criteria.

The right to decline any application is reserved.

Close Brothers Asset Finance is a trading style of Close Brothers Limited. Close Brothers Limited is registered in England and Wales (Company Number 00195626) and its registered office is 10 Crown Place, London, EC2A 4FT.