Inside Newsletter - Transport - May 2024

Business Sentiment Index

Diving into the surveyed statistics of the Transport industry

Meet the Expert

Meet our industry specialist, Gavin Martin, Area Sales Manager

I’m delighted to bring you the latest news from the Transport division. 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 case study looking at Station Hire Limited. Our team worked closely with this vehicle hire company to combine their existing finance agreements into a single Hire Purchase arrangement which has improved cash flow for the business.

We pride ourselves on our ability to provide tailor-made finance agreements that are suitable for individual businesses. Our teams are specialists in their field, with many having worked within the Transport 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 vehicles, equipment and machinery they need. All without having to pay the full price upfront. It can be used for both new and second-hand 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 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 among Transport and Haulage firms has continued to rise for the third consecutive research period.

On page 6, we have a case study on J&J Ward Ltd. This well-known haulage

firm recently undertook a significant fleet expansion with the assistance of Close Brothers Asset Finance

Finally, on page 7 we have our ‘Meet the Expert’ feature. Gavin Martin is an Area Sales Manager and industry expert within our Transport 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.

John Fawcett CEO, Transport & Rentals Division

Case Study: Rental company releases capital to fuel further growth using Hire Purchase agreement

Station Hire Limited is a thriving car, van, and minibus rental company that was founded in 2020 by Lee Morgan, with the aim of providing cost effective rental options to private customers and businesses.

Multiple agreements

The Pembrokeshire based company had Hire Purchase agreements for several vans and a minibus, with different providers, resulting in varied monthly outgoings. To optimise their financial efficiency and release capital for expansion, Lee was looking to merge these agreements into a single Hire Purchase arrangement.

Streamlining the finances

In pursuit of a solution, Lee contacted Close Brothers Asset Finance. Working closely with the business we were able to structure a comprehensive single Hire Purchase agreement. By

combining the existing agreements, the business was able to utilise one payment schedule that aligned with their growth strategy.

A solid position for growth

The consolidation of the Hire Purchase agreements was a pivotal move for Station Hire Limited. The business experienced a significant reduction in monthly outgoings, providing extra capital that enabled them to invest in additional vehicles. This has helped position the company for sustained growth in this competitive market.

Close Brothers Asset Finance commented: "Collaborating with Station Hire Limited to consolidate their Hire Purchase agreements was a rewarding experience. Our tailored solution not only optimised their financial structure but also empowered them to fuel their business expansion. It's a testament to the positive impact

strategic financial planning can have on growing enterprises."

"Consolidating our Hire Purchase agreements was a strategic decision to streamline our finances which, not only reduced our monthly outgoings but also released capital for further investment. Working with Close Brothers Asset Finance was instrumental in achieving these financial goals and I would be happy to work with them again if I were seeking further finance in the future." Lee Morgan, Director of Station Hire Limited

Sentiment among Transport and Haulage 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 Transport and Haulage also sector maintaining its upward trajectory.

BSI scores – June 2020 to January 2024

Appetite for investment

Transport and Haulage firms’ appetite to invest increased from an already high 72% to 77% for those intending to seek funding for investment in the next 12 months.

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 41% (Sept 2023: 26%), Transport and Haulage saw the biggest difference in sentiment, when compared to the previous research period.

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 Transport and Haulage - 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.

QHow would you best describe your business's economic

the coming 12

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

John Fawcett, CEO of Close Brothers Asset Finance's Transport & Rentals 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: Transport business expands fleet with Scania Trucks using a Hire Purchase agreement

J&J Ward Ltd, a well-known transport company with a rich history spanning 60 years, recently undertook a significant fleet expansion with the assistance of Close Brothers Asset Finance.

Rich History:

J&J Ward Ltd was founded six decades ago by Jim and June Ward. Initially, the company specialised in collecting and delivering agricultural products needed by or produced by Yorkshire Dales farmers. Over time, J&J Ward Ltd has expanded its operations to handle a diverse range of dry bulk products. The company operates from multiple locations, including Middlesbrough, Penrith, Leeds, Newcastle, and Bedale.

Upgrading the Fleet:

As J&J Ward Ltd continue to grow their business, they recognised the need to enhance their fleet. The expansion

required reliable, high-performance trucks capable of handling various cargo.

The Solution

Mark Wilson, Regional Sales Manager, worked closely with J&J Ward Ltd throughout the process and tailored a Hire Purchase agreement for the fleet expansion. Utilising Hire Purchase has provided the business flexibility, enabling them to spread the cost of the Scania R450 Trucks over fixed monthly repayments.

Driving towards success: As a result of the new finance agreement, J&J Ward Ltd has been able to acquire over 30 Scania R450 Tag Trucks. This large expansion has allowed the company to upgrade the fleet to the latest 2022 models, whilst meeting the demands of its diverse clientele.

Mark Wilson commented: “It’s been a pleasure to work with J&J Ward Ltd and assist on their fleet expansion. I look forward to continuing our partnership and supporting their future endeavours in the transport industry.”

Michael Ward, Group Board Director commented: “As a family business, we’ve come a long way since my parents founded J&J Ward Ltd. With the assistance from Mark at Close Brothers Asset Finance, we’ve expanded our fleet, positioning us for continued success in the future.”

Meet the Expert:

Gavin Martin

Area Sales Manager

Gavin Martin is an Area Sales Manager within our Transport 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 an Area Sales Manager for the Transport Division; I am based in Exeter with my ‘patch’ covering the whole of the South-West. My role is to provide tailor-made funding options to businesses looking to purchase vehicles. We can fund pretty much anything with wheels, including cars, vans and trucks, we can also offer funding for garage equipment and other transport related assets. A common form of finance we can offer is refinance, this involves releasing capital for businesses to reinvest using unencumbered assets.

My role sees me travelling the South-West meeting face to face with customers to better understand their ambitions and how we can help give them access to the assets they need. Being able to meet people in person helps me to better understand the needs of their business and how Close Brothers Asset Finance can help find a solution that fits both now and in the future.

What was your journey to Close Brothers Asset Finance?

The majority of my career has been spent in the transport industry. I have spent a lot of time in vehicle sales, starting with cars before moving into commercial vehicles, predominantly working with business and fleet customers. I also enjoyed stints

working in vehicle rentals and the travel industry. Towards the end of the pandemic, the opportunity to join Close Brothers Asset Finance presented itself. Knowing the company and its history of expertise and great service, it seemed like too good an opportunity to miss.

What’s the favourite part of your role?

It may sound cliché, but I really enjoy helping my customers. I love working with them to help them realise their businesses potential as well as watching their companies grow through the purchase of assets, they didn’t think they could afford. It’s particularly great when we get a repeat customer as it must mean they are happy with our service.

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

I have 3 small children who keep me pretty busy! I also like to travel as much as possible. When I’m not travelling or parenting, I unwind by cycling or hiking, I like to spend as much time outdoors as possible.

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

I have had several customers who were newly limited companies, these businesses had had contracts awarded to them but were unable to access the funding for the assets they needed to fulfil them, due to their

limited trading history. We worked closely with all these businesses to understand their goals and potential outcomes once they have access to the right assets. Once we have done this, our underwriting team and I are able to tailor the finance solution to suit the customer.

What assets are you finding the most ‘in demand’ at the moment?

I have found that vans are very consistently in demand, especially with me coming from a van sales background and remaining in touch with a number of people in the industry. The technology and conversions available on commercial vehicles are better than ever and I have found that I can source vehicles for virtually any application to suit the customers’ needs.

What do you think 2024 holds for your industry?

I think 2024 will be busier than previous years for the transport industry. We have the supply of vehicles returning to pre-pandemic levels and many businesses are thriving, meaning both access to assets and demand are both very high!

Our teams are specialists in their fields and experts in asset finance. Contact Gavin and the team today: North – 01283 808 731 South – 020 3393 9963