DAILY POST WEDNESDAY, FEBRUARY 11, 2015
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Deals A review of deals in 2014 across North Wales
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WEDNESDAY, FEBRUARY 11, 2015 DAILY POST
Deals Review
Looking forward to a bright future Mark Thomas, Editor of the Daily Post Wales, comments on the optimistic prospects for the North Wales economy
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HERE is every reason to look forward with real optimism to the prospects for the economy of North Wales over the next few years. As our economic recovery strengthens and confidence grows, we can look forward to more investment and jobs coming in, and the greater prosperity this brings should develop into a virtuous circle of growth, creating more business opportunities. We are more adept than ever at capitalising on our natural tourism and agricultural assets, but our growing reputation for excellence in hi-tech business enterprises is just as exciting for the future. The digital age has revolutionised almost every aspect of business life, perhaps none more so than the newspaper industry. The Superfast Cymru project, aimed at boosting broadband delivery to make Wales one of the most connected nations in the World by 2016, should deliver enormous benefits for our existing businesses and add to our attractions for new investors. The Deeside Enterprise Zone is starting to have a positive impact, with recent job and investment announcements, but we now need to see more signs that
●●Mark Thomas, Editor of the Daily Post Wales
the Anglesey and Snowdonia Zones will also deliver benefits. Despite some setbacks, the Energy Island plans for Anglesey represent a massive growth opportunity for the next decade and beyond. The outcome of the Scottish referendum has, of course, opened up the prospect of much greater devolved powers for the Welsh Government. It has already been agreed that control of business rates is to be devolved. Business rates are a major issue for businesses in Wales, and it is crucial for future growth that the reforms which are coming have the best interests of businesses at heart. Looming large on the horizon, of course, is the General Election in May, and there is a real concern from business that this does not become a distraction from the important challenge of economic recovery. It promises to be a fascinating, and unpredictable, campaign. So it is undeniable that there are risks, particularly with the unpredictable outlook for the wider world economy, but it is equally clear that North Wales is open for business, and the prospects look brighter than they have in many years.
With the right financial help, businesses look set to grow With Finance Wales having invested more than £7m during 2014 in businesses across North Wales, Rhodri Evans, one of the company’s St Asaphbased Investment Executives, is impressed by the renewed optimism he’s seeing in the area and by the breadth of investments Finance Wales is involved in
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usiness confidence suffered greatly as a result of the downturn, and this impacted business investment decisions, so it’s refreshing to see local businesses capitalising on opportunities with the right financial backing, and it’s happening across the board.
Meet the rest of the team
●●Jerry Mobbs, Deputy Portfolio Manager
●●Svetlana Goode, Investment Executive
●●Rhodri Evans, Investment Executive, Finance Wales Recently, Finance Wales has boosted its range of funds, launching three new Welsh Government funds – the £10m Wales Property Development Fund, a £20m Wales Capital Growth Fund and the £7.5m Wales Technology Seed Fund – to complement its existing Wales JEREMIE, SME Invest-ment and Micro
Loan Funds. Enterprise Zones are also playing an important role, and Finance Wales has already invested £1.8m in five businesses located on the Anglesey and Deeside Enterprise Zones. The Wales SME Investment and Micro Loan Funds have enabled us to
consider investment proposals from businesses in sectors such as retail and professional services, while our newer funds allow us to help with short and long-term funding needs and this flexibility is proving attractive. I hope we’ll see this momentum continue to grow.
●●Allan Jones, Portfolio Executive
Succeeding through succession
CHRIS GRIFFITHS
Starting up a business is not the only route to owning your own business. Acquiring an established business is another option and potentially a better choice for some. Chris Griffiths, Fund Manager and succession expert at Finance Wales believes that the next generation of Welsh business managers are increasingly taking advantage of opportunities to buy into existing businesses. Finance Wales has so far backed new management teams with over £32 million, helping them acquire 95 businesses. Griffiths believes that with the right backing there are an increasing number of opportunities open to ambitious, committed management teams. He also believes that there are significant benefits for the Welsh economy as a whole. “An estimated 1 in 5 business owners in Wales have run their businesses for over 20 years and an increasing number are considering their options with a view to realising the value they’ve worked hard to build up. This is good news for aspiring and ambitious Welsh entrepreneurs and management teams because there are more acquisition opportunities. “Passing the baton of business ownership to the next generation of managers can be an attractive option and if the process is properly managed, it can be a great way of ensuring business continuity. The existing owner can take a step back and benefit from years of hard work, while the new owner can inject new impetus into the business, enabling it to go from strength to strength and creating more value on their original investment. “We’ve seen a significant rise in these types of deals in the last year and Finance Wales
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can provide existing managers thinking of a management buy-out, or those looking to buy into a business, with a funding package tailored to their individual needs.” Since local businessman Steve Downey bought into Hannaman Engineering, the company expanded their forklift truck supplier base and industrial floor-care equipment manufacturing services.
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Passing the baton of business ownership to the next generation of managers can be an attractive option and if the process is properly managed, it can be a great way of ensuring business continuity
Located in the manufacturing hub Deeside Enterprise Zone, the business has been renamed, Hannaman Material Handling. Its products and services in fleet management systems, racking solutions and training are new additions since the buy-in. “Hannaman started out as a family run business 38 years ago. Today we have an impressive customer base as well as an excellent trading history. Key to this longevity is its excellent reputation that was built up by ‘word-ofmouth’ over the years. “With Finance Wales’ backing we are now able to drive the business forward with new energy.” Griffiths is keen to dispel some of the common misconceptions around successions: “Existing owners sometimes believe that successions are costly and complicated. Equally, potential business owners are often unaware of the funding options open to them. We’re keen to clear up some of these misconceptions and demonstrate how succession investment can help them achieve their ambitions,” Griffiths concluded.
info@financewales.co.uk
HANNAMAN MATERIAL HANDLING Right: Steve Downey, Managing Director Left: David Brown, Operations Director FINANCE WALES: Centre: Rhodri Evans
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With Finance Wales’ backing we are now able to drive the business forward with new energy
www.financewales.co.uk
@financewales
PASSION APPROVING 8 OUT OF 10 BUSINESS LOANS
At Lloyds Bank we know the importance of supporting business growth. So not only are we saying yes to 8 out of 10 lending requests, we have more enterprise mentors than any other UK bank to help your business grow. To find out how we can support your business here in North Wales contact Robert Cooke on 07740 699239 or visit lloydsbank.com/passion
Any property given as security, which may include your home, may be repossessed if you do not keep up repayments on your mortgage or other debts secured on it. All lending is subject to a satisfactory credit assessment. 8 out of 10 relates to period April 2012 – June 2014. More enterprise mentors than any other UK bank as at Oct 2014.
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DAILY POST WEDNESDAY, FEBRUARY 11, 2015
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Lloyds Bank
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Region has confidence, but still needs support F
OLLOWING a recent trip to North Wales, the Bank of England’s chief economist, Andy Haldene, reported growing confidence in businesses, particularly those in the tourism, manufacturing and professional services sectors. And, to the reassurance of many firms, he has announced that the bank will not hike up interest rates in the short term*. It’s encouraging that confidence seems to be returning to the region and that entrepreneurial leaders are keen to pursue growth ambitions. However, careful planning is essential to do
Rob Cooke, senior manager, Lloyds Bank Commercial Banking, on how the bank provides finance packages to a wide range of businesses this successfully – as is sufficient financial support. How is Lloyds Bank helping? We help our customers with a whole range of financial packages, supporting start-ups right through to multimillion-pound-turnover businesses. We believe there’s no such thing as one-
size fits all – every business situation is different, with individual funding needs. In fact our team has 20 people dedicated to supporting a diverse range of industries in North Wales, from Wrexham to Bangor and beyond, including dedicated business centres in Wrexham, Llandudno and Bangor. ●●Rob Cooke of Lloyds Bank *Chief economist BOE – Live News
Lloyds Bank has it covered for floor firm
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OATECH, a family-run business in Prestatyn, is a specialist resin floor applicator. It offers its services to customers across industrial, commercial and domestic markets – and even worked on the London Eye. Director Alan Shufflebotham wanted to invest in growth following a rise in demand. However, his previous banking provider left him disappointed in the support he was given, so he approached one of Lloyds Bank’s relationship directors, Scott Hughes. Scott understood the aims and needs of Coatech and provided Alan with a loan to purchase new premises, which also supported a grant from the Wales Economic Growth Fund, an initiative helping to support projects that stimulate economic growth and create and safeguard employment**. The company’s new premises has enabled Alan to create jobs within the office and expand the site team. It has also provided a professional setting where the company can meet clients. Alternative finance Short-term pressures, such as late payments from clients, can seriously affect the way small businesses like Coatech operate. Invoice discounting is a useful service in this situation. This type of finance can be used to improve a company’s working capital and cashflow, and allows them to draw money against sales invoices before a client has actually paid. Alternatively, factoring, which is similar to invoice discounting, releases up to 90% of the value of issued invoices and enables firms to free up cash from unpaid invoices. With this option, a third party will take responsibility for the business’ ledger. If firms, or manufacturers specifically, are looking to increase orders or capacity, hire purchase facilities can offer the key to investment in new assets, enabling them to
●●Mathew Shufflebotham, Gail Shaw and Emma Shufflebotham with Scott Hughes from Lloyds Bank purchase new plant and machinery by spreading the cost over periods of up to five years. Manufacture success with trade and supply chain finance For ambitious manufacturers and exporters, there’s plenty of fuel to drive growth as the Government aims to increase exports by £1 trillion by 2020***. There are a number of trade and supply chain finance options available to consider, such as supplier finance, where suppliers can obtain early payment of their invoices, giving them greater access to invaluable cashflow.
Similarly, pre-shipment finance can provide a manufacturer or exporter with the working capital needed to produce and ship goods once an order has been confirmed from a quality buyer, and is backed by documentary credit. This gives firms the reassurance of being able to take on new contracts and grow their business without affecting cashflow. The use of documentary
credit also means that Lloyds Bank may be able to make payment early when goods have been shipped to a customer, so manufacturers and exporters do not have to wait for a customer to pay, providing capital to fund further operations. Sector specific help is also out there Lloyds Bank’s key market specialists are experts in a wide range of sectors including manufacturing, property,
healthcare, education and agriculture. They are always happy to talk through business plans, as well as helping with strategy development. With growth gathering momentum and the UK making a positive recovery, it is crucial now, more than ever, to have the backing of a bank that understands the opportunities your business is facing and can help you to achieve your ambitions. With the right funding – and the right support – businesses across North Wales can look forward to a successful year ahead. If you’re interested in talking to one of Lloyds Bank’s special-
ists, contact Rob Cooke for more information. You canemail him at Rob.Cooke2@ lloydsbanking.com or call him on 07740 699239. All lending is subject to a satisfactory credit assessment. **Wales Economic Growth Fund – Business Wales ***UK Government aims to increase exports by £1 trillion by 2020 – Centre for Cities Any property given as security, which may include your home, may be repossessed if you do not keep up repayments on your mortgage or other debts secured on it.
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WEDNESDAY, FEBRUARY 11, 2015 DAILY POST
Deals Review
Move will create 60 jobs A
N expanding healthy snack bar and flapjack maker supported by Finance Wales is set to create 60 jobs after being acquired by a venture capital firm. Bridges Ventures has taken a controlling stake in Wholebake, which employs 104 staff in Corwen and Wrexham. It will provide additional funding to support ongoing growth and new capacity and will create at least 60 new jobs over the next five years in an area of high unemployment. Founded in 1996, Wholebake will continue to be led by chief executive Mark Gould and operations director Richard Shaw, who took over in 2011 with the backing of Finance Wales. Since then they have successfully grown it from £4m in 2011 to over £11m of sales to March 2014. Wholebake manufactures and markets its 9bar brand, as well as co-packing for other growing brands. Mark Gould said: “Healthy snacking is an exciting market, which we expect to continue to develop rapidly in the UK and internationally. “We are excited by the opportunity of working with Oliver and the whole Bridges
●●Mark Gould, managing director of Wholebake team to fulfil the potential we see in our business.” Bridges said it identified Wholebake as an ideal investment for its fund with the potential to deliver strong returns for investors as well as impact, through significant job creation and by supporting the growth of the
Funding to help develop material AN INVESTMENT is to fund full commercialisation of organic semiconductor technology to enable truly flexible displays and electronics. SmartKem, the leading developer of high performance, organic semiconductor materials for truly flexible displays and electronics, has announced the completion of a significant series A funding round. This is from an investment syndicate comprising BASF Venture Capital, Octopus Investments and Entrepreneurs Fund, plus further investment from Finance Wales, the company’s principal shareholder. The investment will build on the £3m of investment from Finance Wales to date and will be used to further develop the leading scientific foundation of the SmartKem tru-FLEX™ organic semiconductor material range, and to accelerate this technology towards full commercialisation. Richard Hadden, investment executive in Finance Wales’ technology ventures team, said: “Finance Wales has invested in SmartKem since its start-up in North Wales in May 2009. With our long-term backing Steve and his team have developed the company’s exciting tru-FLEX™ technology, which has demonstrated significant market potential. “Securing this latest investment is a major achievement by the company, and we’re pleased to join forces with the new syndicate of investors to provide Smartkem with the capital it needs to fully exploit the commercial potential of tru-FLEX.”
healthier snacking sector. The Bridges investment provides a full exit for Finance Wales. Jerry Mobbs, deputy fund manager at Finance Wales, said: “A package of debt and equity investment from Finance Wales helped Mark and Richard fund their MBO
of Wholebake in 2011, and they’ve successfully grown the business since they took the helm. “Wholebake’s profits have more than doubled and they’ve also more than tripled their workforce in Corwen as they’ve expanded Wholebake’s own-brand and
contract-manufacturing operations.” He went on: “This is a real success story, demonstrating the difference Finance Wales’ backing can make, and we hope it continues to go from strength to strength, creating more Welsh jobs.”
Healthcare firm set to expand A Rhyl-based healthcare provider run by a husband and wife partnership is expanding thanks to a micro loan from Finance Wales. Specialist Healthcare Services provides a range of therapeutic services for private clients as well as for the NHS in North Wales. Finance Wales’ loan will help the company to purchase new equipment, undertake training and enhance its marketing. Managing director and registered mental nurse Scott GrahamHammons said: “We’ve developed a reputation for providing effective community-based therapy since we set up the business three years ago. We’ve won some long-term contracts and demand for our services is increasing. “We’re keen to expand, and the loan from Finance Wales is helping us to do this. Svetlana, our local Finance Wales contact, reviewed our plans with us and progressed our application quickly.” Investment executive Svetlana Goode said: “Scott and Natalie have established a sustainable business with considerable potential for further growth. “Demand for the therapeutic services they provide is set to expand, particularly with the current changes in the health service. They have clear expansion plans, and our micro loan has provided the backing they need.” Finance Wales made the loan from the Wales Micro-business Loan Fund.
Chef cooks up a new project A
TALENTED young Welsh chef is making his mark on a popular North Wales bistro thanks to a £40,000 micro loan from Finance Wales. Gerwyn Williams, whose cooking has been mentioned in The Good Food Guide, recently took over the well-known Conwy restaurant Bistro Betws-y-Coed. Mr Williams combined the micro loan with a loan from Lloyds and his own capital to secure a 10-year lease on the restaurant as well as to cover initial rent payments and other start-up costs. He said: “I’ve worked and trained in many of North Wales’ best restaurants, as well as at Bryn Williams’ London restaurant, Odette’s. Added to this, I ran Y Tanerdy in Llanrwst for two successful years. “All of this experience has certainly helped me while taking on the challenge of running a wellestablished local restaurant in a community I know well. “Bistro Betws-y-Coed’s potential is huge as it’s in such an excellent location, and the loan from Finance Wales provided me with the capital I needed to begin making the most of this potential. “I’m really enjoying working with the local farmers and producers I know to create a dining experience that really puts my restaurant on the map.” Local intermediary Trefor Rowlands introduced the experienced head chef to Finance Wales.
●●Gerwyn Williams and Svetlana Goode from Finance Wales Investment executive Svetlana Goode, a micro loans specialist at Finance Wales, said: “Gerwyn has had a varied career working in a number of busy, highly regarded restaurants and he also received some excellent reviews at Y Tanerdy.
“He’s built up a wealth of experience in the restaurant trade and is now keen to make his mark with Bistro Betws-y-Coed. “Bistro Betws-y-Coed is located in a real tourist hot-spot, has an excellent reputation and Gerwyn wants to build on this reputation to
Richard Stanton.
turn it into a real destination restaurant. Finance Wales’ micro loan is part of a larger funding package which is enabling him to achieve his ambition.” Finance Wales made the loan from the Wales Micro-business Loan Fund.
DAILY POST WEDNESDAY, FEBRUARY 11, 2015
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Deals Review
Cool £1.2m helps a family business serve up growth K
K Fine Foods is creating 90 new jobs on Deeside Enterprise Zone in its largest investment to date, with support from the Welsh Government and Finance Wales. The £4.2m investment is creating an additional 10,000 sq ft of manufacturing space and funding the purchase of new equipment that will increase capacity to produce more than £30m worth of frozen food annually. The funding package includes a £720,000 grant from the Welsh Government’s Economic Growth Fund and a £1.2m mezzanine investment from Finance Wales. Economy Minister Edwina Hart said: “This is an excellent example of the Welsh Government and Finance Wales working together to come up with a package of finance to support growth and create jobs, and illustrates clearly how important access to finance is for business growth.” The award-winning family business manufactures high-quality frozen ready meals , supplying blue chip clients such as Marstons, Greene King and JD Wetherspoon. It also supplies well-known wholesalers like the Brakes Group and Bidvest Group. In recent years KK has been selling frozen Christmas meals to supermarket chains such as Iceland and Aldi, and growth in this market has fuelled their expansion. Chief executive and founder Leyla Edwards explained: “We’d intended to increase our capacity to
●●Edwina Hart, Minister for Economy, Science and Transport, at KK Foods on Deeside Industrial Stacey Oliver Estate with Leyla Edwards, MD in the new development more than £30m in the next three to four years to allow us to enter new markets, but the success of our seasonal products, as well as the continued sales growth in our existing client base, meant we’ve brought forward our expansion plans to meet this demand.” Finance Wales investment executive Rhodri Evans worked with the
Building a future A £500,000 loan from the Wales Property Development Fund is helping an award-winning family-run property developer construct three new terraced properties in Caerwys, North Wales. Established in 2003, Harris Homes Ltd has won awards for its conservation and re-design work and most recently completed an impressive 17-property development at Lleweni Hall. Experienced husband and wife team Davin and Sally Harris, who run the company, acquired the site in the centre of Caerwys in 2008. However, development of the site was put on hold until the economic climate improved. The couple revisited their plans for the site in 2012 and have now renovated an existing building on site, enhanced their planning permission and cleared the remainder of the site in readiness for further development. With the ground floor of the newly renovated building sold for commercial use, the couple are now investing £100,000 of their own capital alongside the £500,000 loan from Finance Wales in the next phase of the project. The next phase of the development will initially see Harris Homes construct three new, terraced properties on the site. Further development is planned, once these properties have been sold.
Finance team at KK, led by Dr Graham Jackson, to structure the investment. Rhodri Evans said: “KK Fine Foods is a real North Wales success story, and has built up a strong reputation in food manufacturing as well as an excellent customer base. “This latest expansion will strengthen its position as a major
UK frozen food manufacturer. “Our investment complemented the grant from the Welsh Government grant and we ensured the repayment profile suited the company’s plans.” He added: “We were also able to offer an interest rate reduction as they’re located on an Enterprise Zone.”
Loan lets pair achieve a dream SETTING up in business together was a long-term ambition for partners Jenny Walls and David Page, and a £30,000 loan from Finance Wales together with their own savings helped them to open The Looking Glass Ice Cream Parlour in Llandudno. David said: “My partner Jenny and I had always wanted to work together and were keen to use our hospitality and catering skills, so opening The Looking Glass has been the culmination of a dream. “We spotted an opportunity to open our own gelato ice cream parlour in Llandudno and needed some capital in addition to our savings to get it off the ground. “Finance Wales’ loan helped us to secure premises and buy the ice cream-making equipment we needed. “So far our ice cream is popular with both locals and tourists. We’re open all year round and so we’ll be selling a range of home-made products in the winter, hosting children’s parties and we plan to move into the wholesale business in the next year.” Eighty seven Welsh businesses had taken out loans totalling £1.9m from the Wales Micro-business Loan Fund by the end of June 2014, helping to create 281 jobs and protect a further 264 jobs. These loans also enabled the businesses to secure an additional £2.4m, injecting £4.3m into the Welsh economy. Nicola Edwards, micro loans fund manager at Finance Wales, said: “Thanks to the Wales Micro-business Loan Fund, Finance Wales has been able to provide micro loans to businesses in a wider range of sectors and to certain sectors for the first time, and businesses in these sectors are certainly making the most of the opportunity.”
Investment sparks opportunity L LOYD Morris Electrical Ltd, which celebrated 40 years in business in 2014, made a £450,000 investment supported by Barclays to acquire new premises at Miners Road, Llay, near Wrexham. This will provide much-needed additional space and accommodate increased demand for its products and services. The business, which has a turnover forecasted to exceed £13m this year, specialises in the design, manufacture and installation of electrical distribution and control systems for industrial and commercial projects. The company currently employs 150 staff and plans to create another 15 jobs over the next two years. Barry Lewis, managing director at Lloyd Morris Electrical Ltd, said: “We have been an important local employer to the Wrexham and surrounding area for the last 40 years, and this new investment will bring in new business, securing jobs and creating new employment opportunities for the local community. “The business has evolved and adapted over the last 40 years to ensure we operate in the right markets.” Paul Ffoulkes, Barclays corporate relationship manager, said: “This is a significant investment in a com-
●●Barclays relationship director Paul Ffoulkes, left, with Lloyd Morris Electrical Ltd MD Barry Lewis petitive market and paints a very bright future for the business. “By working closely and really understanding the business, Barclays has been able to support Lloyd
Morris Electrical Ltd financially and professionally throughout the expansion. We have a long-standing relationship with the company and wish to continue to work in partner-
ship to support their strategic growth plans. This is an indigenous Welsh business, growing in a competitive sector, looking to expand and create vital jobs in the local community.”
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WEDNESDAY, FEBRUARY 11, 2015 DAILY POST
Deals Review
Loan gives Mona a real lift A
successful North Wales lifting and engineering company is benefiting from a follow-on loan of £75,000 from Finance Wales as it develops its operational base in the Anglesey Enterprise Zone. Established in 2004, Mona Lifting Ltd (MLL) provides a range of specialist services for engineering and lifting equipment. Finance Wales previously backed MLL in 2010 to help facilitate an upgrade to larger premises after its growth potential was being restricted by the size of its original site. With the loan the company moved to a new location in the Anglesey Enterprise Zone, now an established area for low carbon energy generation including nuclear, wind and biomass. Following on from the success of this move, the company has now secured a second loan from Finance Wales to develop the site’s facilities. MLL offers a ‘one-stop shop’ for bespoke engineering, lifting and handling equipment requirements, and so maximising its on-site capabilities is a key objective for the business. Director Robin Wyn Evans said: “Since relocating to our new premises in 2010 the company has expanded, with 10 extra staff taken on over the last four years. “Also, because of the area we have been able to develop our expertise and reputation within the nuclear and energy industries, which are
Buyout means IT firm stays part of the UK NORTH Wales-based Risc Group IT Solutions underwent a management buyout from its French parent company, Risc Group SA, to bring it back under UK ownership thanks to support from Finance Wales. The reunited management buyout team, who successfully founded and grew the business, consists of current managing director Jeremy Keane, ex-HR and finance director Joanna Stewart and founder and former CEO Paul Roberts. The deal enabled the Llandudno business to further grow its core areas of cloud services, data backup and IT security. The management buyout was completed with the support of Finance Wales and HSBC. Paul Roberts said: “People are important to us. We pride ourselves on our team of highly skilled individuals who have made Risc the success it is today. “We’re proud of the unrivalled levels of service and support we can offer our customers and partners. The MBO has created an increased stability within our company and employees feel part of a winning team with a vision.”
●●Mona Lifting is based in Llangefni becoming strong markets for us. “We offer a complete customer service when it comes to specialist engineering or lifting projects and also supply lifting hardware, so improving our on-site facilities is crucial for us. “With the second loan from Finance Wales we have begun to construct a blast cleaning plant and industrial coating room as well as
extend storage space on site.” Portfolio Executive Alun Jones, who structured the Finance Wales loan, said: “MLL is a great example of the type of long-term relationship we like to build with the businesses we invest in. “It’s pleasing to see that the initial investment in 2010 was the catalyst for the company to develop and expand into the likes of the nuclear
sector, and now the company is looking to take advantage of their position by bringing more specialist services in-house. “The loan from Finance Wales will not only improve facilities and reduce out-sourcing costs, it will safeguard three jobs and lay the foundations for future job growth in the local area as the company continues to expand.”
New cafe for fabric company ABAKHAN Ltd, the fabric, crafts and haberdashery retailer headquartered in Mostyn, Flintshire, has officially opened a new café, gift shop and children’s play area supported by Barclays. The £1m investment has created a 150-seater dining area and has already generated two additional apprenticeship positions. The business was established in 1947 when founder Michael Abakhan first started making hand-woven rugs on a loom, selling them across the UK from the back of his van. In 1965 Michael’s son Nick Abakhan (now company chairman) joined the business, sourcing textile waste to make the rugs. In 1972 Nick Abakhan purchased a wooden hut in Liverpool, and with the help of current site maintenance manager Dave Adams, transported the unit to Mostyn, Flintshire to provide the business’s first retail outlet. The company, now under the stewardship of managing director Nick Powell, currently employs 274 staff across nine outlets in Wales and the North West, 12 stores across Estonia, Latvia and Lithuania, and has a business turnover forecast to exceed £11m in 2014. Mervyn Hughes, relationship director for Barclays, said: “By working closely and really understanding the business, Barclays has been able to support Abakhan Ltd financially and professionally throughout the expansion.”
Move drives business forward A
Flintshire-based forklift truck specialist has benefited from a recent management buy-in thanks to a loan from Finance Wales. Hannaman Material Handling, formerly Hannaman Engineering, is a forklift truck services company specialising in hire, lease, sale and repairs. The business is based in the Deeside Enterprise Zone, fast becoming a centre for advanced manufacturing and technology excellence in Wales. A loan from Finance Wales has enabled local businessman Steve Downey to undertake a management buy-in of the company. He said: “Hannaman started out as a family-run business 38 years ago. Today it has an impressive customer base as well as an excellent trading history. Key to this longevity has been its excellent reputation, which has been built up by word-of-mouth over the years. “With Finance Wales’ backing we are now in the exciting position to drive the business forward with a new growth strategy. This includes expanding our supplier base of forklift truck and industrial floor care equipment manufacturers and moving into new products and services in fleet management systems, racking solutions and training.” He added: “Being based in a manufacturing hub like the Deeside Enterprise Zone is an ideal location for us, and we’re keen to make the most of new opportunities throughout Wales
●●David Brown and Steve Downey, from Hannamans Material Handling, with Rhodri Evans, from Finance Wales and in particular the Deeside and Wrexham areas, as well as from our existing client network.” Finance Wales Investment Executive Rhodri Evans structured the investment. He said: “The succession of a management team is always cru-
cial to the long-term growth of a business. “Hannaman Material Handling has a long and proud history in its sector, and this buy-in signals a new exciting chapter for the company. “Finance Wales was happy to back
Steve Downey for the succession. With a background in manufacturing and detailed knowledge of the company beforehand, he has all the right skills and experience to successfully drive the business forward and achieve its growth potential.”
DAILY POST WEDNESDAY, FEBRUARY 11, 2015
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Deals Review
Not a rubbish investment A
N established Welsh recycling company received a second debt investment from Finance Wales to provide the Flintshire-based company with the development capital it needed to install a state-of-the-art recycling plant and expand the range of services it provides. Paperback Collection & Recycling Ltd (Paperback Recycling) has been salvaging and reprocessing waste paper, card, polythene and plastics at its Deeside plant since 2009. Turnover has almost doubled since Paperback Recycling received a £350,000 loan from Finance Wales in 2010, which enabled it to install a new automated system to sort larger quantities of recyclable waste. Paperback Recycling is now expanding its core services to take advantage of the emerging market for refuse-derived fuel (RDF) in the UK. The company used Finance Wales’ latest investment to purchase innovative new plant to improve its core sorting and storage business and also enable it to produce high-quality RDF. Managing director Gordon Anderson said: “We’re aiming to continue developing our core storage, salvage and reprocessing business but we also plan to diversify into producing high-quality refuse-derived fuel, or RDF. “Although the European market for RDF is now quite mature, demand is just starting to take off in the UK and we want to establish ourselves as a UK leader. “Finance Wales’ first investment helped us increase our capacity, and
●●Gordon Anderson, managing director, Paperback Recycling, with Allan Jones of Finance Wales we’ve used this investment to purchase new plant to help increase our efficiency and break into a growing new market. Finance Wales’ backing has been key to our continued growth.” He added: “The UK needs to achieve higher overall levels of recycling, and using our new plant we’re committed to achieving ever higher rates of recyclate recovery as well as
Cancer drugs given a boost CONTINUED development and commercialisation of its new antibody drug conjugate (ADC) production technology will be accelerated by a £600,000 secondround investment and grant package announced by ADC Biotechnology (ADC Bio). Based at OpTIC Technium in St Asaph, North Wales, the business agreed the first in an expected series of commercial collaborations with major players in the anti-cancer drug sector. The second-round funding package back in 2013 included a £400,000 equity and debt funding package from Finance Wales – and £200,000 from a consortium of previous and new private investors led by Acceleris Ltd. Finance Wales and Acceleris were lead funders when ADC Bio became operational in December 2011. The £600,000 investment also funded commissioning in the current quarter of the company’s new Technical Service Lab – coming on stream to meet strong demand for consultancy and R&D services. The company’s ‘Lock and Release’ process technology speeds, simplifies and lowers the cost and environmental footprint of both developing and manufacturing the latest generation of anti-cancer drugs.
to making RDF from remaining final residues.” Turning waste into fuel is wellestablished in Europe and is also set to increase in the UK. Shredding and dehydrating allows thermal energy to be extracted from solid refuse. It also drastically reduces the amount of waste sent to landfill and costly waste exports. Finance Wales Portfolio Executive
Allan Jones, who structured the investment, has established a longterm relationship with Paperback Recycling. He said: “Paperback Recycling has been operating in the waste management and recycling sector since 1995. “It has invested heavily in its Deeside facility since opening it in 2009 and now has the capacity to process large volumes of waste.”
New role will support SMEs LLOYDS Bank Commercial Banking has strengthened its support to SMEs in Wales with the appointment of specialist senior trading business development director Peter Maunders. Peter will be joining a team of 13 new senior development directors, who will be working with introducers across the UK, such as local accountants and financial advisors, to reach out to businesses that may be finding it difficult to access finance or are unaware of the different funding packages available to them. The team will also be working closely with the 72 business development directors currently operating across the UK, but will specialise in engaging with businesses that have a turnover of £10m or above to ensure that companies are receiving the specialist guidance and advice needed to capitalise on current growth opportunities. Peter said: “The new team will play an important role in building relationships within local communities across the UK, helping us to speak to companies that may be struggling to find a funding package that suits their specific business needs.” All of the new trading business development directors will have a specialist accreditation in manufacturing from the University of Warwick to help them fully understand manufacturing customers’ needs and provide specially tailored guidance and support.
Finding other fund sources N
atWest is set to give small Welsh businesses greater access to finance as it introduces a scheme to refer them to alternative sources of lending. The bank has joined forces with peer-to-peer lenders Funding Circle and Assetz Capital, and businesses which NatWest is unable to help financially at the moment will be signposted to them. Access to finance via alternatives is growing rapidly. Peer-to-peer or marketplace lending to businesses now makes up around 1% of new UK SME lending, but it is growing at 200% a year and is set to become a significant presence in the market in the near term. NatWest’s aim is to expand choice for existing or potential customers whose loan applications do not meet the bank’s criteria by signposting them to a panel of alternative finance providers. This will happen through conversations with a relationship manager or through documents included with correspondence. Sioned Edwards, NatWest’s regional director of commercial banking for North Wales, said: “We are committed to doing the right thing for small businesses, and this
includes helping them to access finance where we cannot help them within our current risk appetite. “I am delighted to see NatWest partnering up with both Funding Circle and Assetz Capital. We are dedicated to supporting SMEs, whether they are an existing customer or not.” A pilot has already begun in Scotland and South West England, with a national roll-out to include Wales following over the coming months. Funding Circle is the leading online marketplace for business loans, enabling investors to directly lend to small businesses. Since launching in August 2010, Funding Circle has helped more than 7,000 businesses borrow more than £490m. Investors include thousands of individuals, the Government-backed British Business Bank, local councils, financial organisations and Huddersfield University. Assetz Capital is one of the fastest growing peer-to-peer lenders in the world, run by professional bankers with huge experience of quality and safe lending, alongside a nationwide network of relationship managers who visit and vet potential borrowers. NatWest receives no fee or other
●●NatWest’s regional director of commercial banking, Sioned Edwards income from the providers. NatWest’s parent, RBS, accounts for 33% of the small business lending market, so this new scheme means that it becomes the largest lender to refer small business customers to this alternative source of finance.
In addition, after having explored Invoice Finance, Asset Finance and the Enterprise Finance Guarantee Scheme, businesses will be asked to visit the British Bankers’ Association’s dedicated website, which also offers additional support.
RHODRI EVANS
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What will 2015 hold for your business?
Successful businesses constantly change, and evolution rather than revolution often reaps rewards Now is the time to think about what we want to achieve in the coming year. According to Finance Wales Investment Executive Rhodri Evans reviewing and adapting your business model would be his top tip.
“Adapt, expand and thrive would be my tip for savvy management teams in 2015,” said Evans. “Successful businesses constantly change, and evolution rather than revolution often reaps rewards. It’s all too easy for businesses to do what they’ve always done and overlook their potential.” There are lots of factors to consider when building a sustainable business and a strong business model and growth plan, coupled with the right financial backing, confidence and an adaptable approach, can pay real dividends.
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Evans believes that businesses should actively look for opportunities to improve their internal operations and supply chain as well as their products and services: “Diversifying your product range could be attractive for a number of reasons, as you can often benefit from economies of scale, exploit unused capacity and grow your revenues and margins.” “Whilst changing trends and new technology may offer opportunities, there are clear cost and efficiency benefits to exploiting untapped potential within your existing markets. If you operate in increasingly crowded domestic markets, expansion into international markets is worth considering. You may have fewer competitors and could achieve higher margins and increased economies of scale.” Evans is keen to highlight how Finance Wales can help ambitious management teams achieve their growth plans. “Whether plans require a short or long-term injection of capital, we have a range of available funding from £1,000 to £2 million,” he explains. Finance Wales’ funding options include working capital; £1,000 - £50,000 micro
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loans; cash flow-led loans as well as mezzanine and equity packages. Short-term property development loans are also available for small-scale, non-speculative commercial and residential property projects. “Funding growth plans effectively will ensure the best chance of success and we encourage businesses not to pre-judge what they need. We prefer to look at their requirements in detail and come up with a tailored funding package. A traditional loan structure isn’t always the best option and we can profile a more flexible investment to suit a company’s objectives and future profit forecasts, for example,” he said. “I’m keen to encourage owner-managers and management teams to think about what 2015 will hold for their business, and whether we can help them to adapt, expand and thrive.” As part of the St Asaph new investments team, Rhodri works with SMEs across North Wales with a range of funding needs. He is an experienced business banker with expertise in identifying viable business plans and future growth potential.
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Growing your business? We’re ready to lend to companies in Wales A business loan could make all the difference to your company. With our dedicated national lending fund, we’re helping businesses like yours grow. To find out more:
0800 529 8103 Search: ‘NatWest Business Loans’
Ahead for business
Director’s Guarantee may be required. Applies to lending up to £250k (excluding Commercial Real Estate Finance) Security may be required for which a fee may apply. Over 18s only. ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER DEBT SECURED ON IT.