finance yorkshire welcome

Finance YorkshireWelcome

www.finance-yorkshire.com


Finance YorkshireJennie Adams - Director


Finance YorkshireWhy are we here this morning?

• Strengthening relationships with stakeholders, partners, intermediaries and clients

• Demonstrating how we are working in partnership with our LEP to support business growth

• Looking to the future

• Dialogue and questions


Finance YorkshireAgenda

• Jennie Adams, Director, Finance Yorkshire

• Alex McWhirter, Chief Executive, Finance Yorkshire

• James Trowsdale, Local Enterprise Partnership

• Gerard Toplass, Frillo Ltd – Seedcorn Investee Company

• Neil Bangham & Richard Stow, Weedfree Limited – Business Loans Investee Company

• Mark de-Villamar Robers, Envirodoor Ltd - Equity Linked Finance Investee Company

• Questions & Answers


Finance YorkshireAlex McWhirter – Chief Executive


Finance YorkshireWhat we are…

£90m Venture Capital and Loan Fund

Finance sourced from:

£30m European Regional Development Fund

£15m UK Government

£45m European Investment Bank


Finance YorkshireOur business approach…

• To fully invest the £90 million fund through helping SME’s constrained by finance to grow

• To create a sustainable fund• To be recognised and respected as a key participant in the

SME business and professional sectors• To stimulate demand for finance in our key market

segments • To realise good returns for investors and value for money


Finance YorkshireOur investment performance so far...

• 543 investments totalling over £67.5 million

• On track to meet economic targets; jobs created & safeguarded; increase in turnover; business starts and private sector leverage

• On track to achieve full investment by December 2014


Finance YorkshireInvestment Profile


Finance YorkshireInvestment impact...

• Created or safeguarded 6608 jobs

• Over £140 million Private Sector Leverage, resulting in £2.12 levered for every £1 invested

• Generated £84m in increased turnover

• Legacy fund to be invested in region’s businesses in line with original objectives - to be utilised after 2019


Finance YorkshireInvestment performance by location...

The Humber LEP Area - Activity

Enquiries Applications Investments

Number % of total Number % of total Amount (£000) % of total

Kingston upon Hull 156 36% 37 42% £ 1,405 34%

East Riding 177 41% 39 44% £ 2,575 63%

North East Lincolnshire 47 11% 7 8% £ 15 0%

North Lincolnshire 50 12% 6 7% £ 80 2%

Total 430 100% 89 100% £ 4,075 100%


Finance YorkshireInvestment performance break down...

Location

Amount Invested

£000

Investments (%)

Amount Invested

£000

Investments (%)

Amount Invested

£000

Investments (%)

Seedcorn Business Loans Equity

The Humber £ 450 11% £ 2,175 53% £ 1,450 36%


Finance YorkshireInvestment performance by sector...

Sector Analysis – All Funds

Sector ApplicationProcess (%)

Investments(%)

Business Services 13% 17%Engineering / Industrial products / Materials 25% 27%Financial Services 2% 2%Healthcare / Pharma / Bioscience 12% 5%ICT / Software / Telecoms / Media 19% 12%Leisure / Hospitality 1% 2%Renewables / Energy / Cleantech 6% 7%Consumer / Food & Drink 7% 10%Other 16% 18%


Finance YorkshireInvestment criteria…

• A business with growth potential

• A new start or growing business

• A business unable to source its full funding requirement from the commercial market

• SME’s paying business rates in Yorkshire and the Humber or relocating to the region


Finance YorkshireThree portfolios

• Seedcorn Finance Up to £780k

• Business Loans £15k - £250k

• Equity Linked Finance £100k - £2m

Finance YorkshireSeedcorn Finance

• Start up or early stage innovative business during the fund’s early period, but now focussed on more mature innovate businesses that are self-sustainable with our investment

• Based on strong and unique technology, know-how or content that will usually be protectable

• Have potential for rapid growth and multiple returns of the original investment

• Based in or have significant activity in Yorkshire and Humber


Finance YorkshireSeedcorn Finance

Where investment made a difference


• Carlton Manufacturing - Moved to larger premises and radically changed its manufacturing process following Finance Yorkshire investment

• Xeros – Finance Yorkshire invested a total of £1.45 million over three funding rounds. Market capitalisation of £80m when admitted to AIM in March 2014

• Faradion – Latest round of funding included investment from trade partner Haldor Topsøe. The investment will enable the company to further develop its technology as well as to do small scale production of their next generation battery materials

Finance YorkshireBusiness Loans

• Fixed rate loans typically between £15,000 - £250,000 as syndicated or complete financial packages for businesses

• Financial packaging with other forms of debt finance including the banks

• Range of investments include; Working Capital, Capital Expenditure, Investment in Premises and development capital





Green Peas Solutions - Business Loan enabled company to invest in research and development and expand its innovative packaging range.

William Beckett Plastics – Business Loan enabled the company to do a comprehensive refurbishment programme of three machines that mould its range of packaging.

Broder Metals – Business Loan to assist with a move to larger premises and to enable them to refit and refurbish the premises to their requirements

Finance YorkshireEquity Linked Finance

• Some start ups, largely growth, development capital or expansion

• Types of investment packages include:

Loans with Profit Participation - for established businesses generating turnover of over £5m

Mix of Loan and Equity - for younger businesses with turnover of less than £5m

Equity only Investment - for early stage businesses with plans for rapid growth





MTP Innovations - Using the £400k investment to expand its product range and customer base

Noel Village – Using the £750k investment to invest in new heat treatment

Magnomatics – Using the £1.1m (part of £2.5m package) to develop

products, create new jobs and expand its global customer base.

Finance Yorkshire has:

•Completed 543 investments

•Invested a total of £67.5m

Seedcorn Finance – 62 investments totalling £12m

Business Loans – 408 investments totalling £25.5m

Equity Linked Finance – 73 investments totalling £30m

Finance YorkshirePortfolio performance to date..



Finance YorkshireOur Investment approach

Working alongside the commercial market;

• Maintaining and developing relationships with financial intermediaries to promote awareness and dealflow

• Market making effect, making deals happen by spreading the risk with other investors and lenders

• Co-investing with other lenders and funds


Finance Yorkshire

James TrowsdaleHumber

Local Enterprise Partnership

James Trowsdale

Humber LEP Investment Manager

About the Humber LEP• Role: To attract new investment and generate growth

for existing businesses• Area: North Lincolnshire, NE Lincolnshire, Hull & East

Riding• Business-led• Board of 16 provides leadership and direction• Chaired by Lord Haskins of Skidby• Supported by a small core staff and partners

Realising potential of Energy Estuary• Enterprise Zones – 484 hectares• Regional Growth Fund - £66m+• Business Loan Fund - £8m• EU Structural & Investment Funds – c£87m• Strategic Economic Plan – £62m request in 15/16

Realising potential of Energy Estuary – Good news stories since November…

• Siemens• Able Marine Energy Park • Hull – Selby line electrification • Hull: City of Culture 2017• Expansion of Assisted Areas (to cover Scunthorpe)• Enterprise Zones extended until 2020• City Deal • Growth Hub

Humber LEP Business Loan Fund

Business Loan Fund • £8m+ allocated to the Humber through the growing

places fund• Loan funding for stalled capital projects • Open for applications• Process = EOI submitted & reviewed by Investment

Board, best projects invited to submit full applications with supporting information. Due diligence carried out on shortlisted project. Contracts agreed.

Business Loan Fund • Open to all businesses of any size and sector• Aim to create jobs as quickly as possible • Contribute to Humber economy• Ideally planning permission in place• Interest rate determined by EU Reference Rate• Capital projects e.g. Infrastructure & buildings

machinery

Business Loan Fund – Project Supported Europarc Village

• £500,000 loan provided to build new access road, drainage and utility services

• 6.5 acres of land opened up for development of hotel, restaurants, a public house (Greene King), nursery, gym

Business Loan Fund – Project SupportedPaneltex • £500,000 loan provided to acquire new plant and

machinery, refurbish existing equipment and factory enhancements.

• 34 jobs created

Growing the Humber RGF Programme

Growing the Humber (RGF3 programme) • £30m from the Regional Growth Fund (RGF3)

• £20m - Humber wide Business Investment Grants for priority sectors and their supply chains

• £10m - South Humber Bank Renewables Programme• Aims to create 1500 new jobs and lever £125m of private

sector investment by March 2015.• Additional £1m from Growth Hub bid (part of £2.5m bid)

• Complements RGF programmes in • North Lincolnshire (£10m) • Hull & East Riding - Green Port Hull (£25.7m)

Decision making process• EOI submitted to Humber LEP – LEP/NELC Officer check for eligibility • If eligible – Full application form sent• Upon receipt of application checked by LEP/NELC Officers and

appraised by Officer group from each Humber local authority*• Appraisal summary, application and supporting documents sent to

Investment Board *• In principle decision made • Contract documents drawn up by NELC • Monitoring/claims by NELC * Due diligence potentially requested

Business Investment Grant - Key stats• 400+ EOIs received (250+ invited to full application) • 150+ full applications received • 52 projects ‘live’ - £10.1m RGF, 850 jobs, £56m

investment levered • 22 projects in contracting • 17 projects approved with conditions/due diligence• Funding still available

Investment Levels and appraisal tests• Programme Investment ratio of 1 to 4. Therefore every £50,000

grant requires £200,000 investment from other sources.• The minimum level of grant which can be requested is £20,000

(£5,000 for renewables projects in N & NE Lincs).• The maximum level of grant is £2.5m –most applications to be

substantially lower than this.• The level of grant is determined by state aid rules – this depends on

location, type of business and size of company. • Assisted Area plays key role is determining grant level• Is the project viable and deliverable? • Spend must be in 2014

Business Investment Grant – Burgess Pet Care• £80,473 grant (£804,734 total project cost)• 35 new jobs• Pet food manufacture • Project is to purchase and install a full packaging line offering

more efficient production

Business Investment Grant – Summerbridge Doors•£334,000 grant (£3,880,000 total project cost)•35 new jobs•One of the UK's leading manufacturers of MDF vinyl wrap doors and accessories•Factory expansion from 45,000 sq ft to 83,000 sq ft.

Business Investment Grant – Cablepoint• £21,600 RGF grant (£108,045 total project cost)• 5 new jobs• Manufactures bespoke cable assemblies, wiring

looms, and control panels for a variety of industries such as Military, Medical, Automotive, Domestic and Agricultural

• Purchase a machine that will remove the necessity to cut and tin wires by hand

Business Investment Grant –Dong Energy • £1.1m grant • Supports the firm’s £11.5m plan to establish their offshore engineering and

operations and maintenance bases at the Port of Grimsby and the Royal Dock on the Humber’s south bank.

• An estimated 100 direct jobs are expected to be created by March 2016 • Another 100 to come later as part of ongoing developments.• More than 475 indirect jobs are set to be created in vessel and offshore

related services

Key Information• Information can be found on www.humberlep.org and

https://www.nelincs.gov.uk/business/regional-growth-funding/employment-skills-development

• Expression of Interest template• Eligibility Criteria• Programme Guidance

• Contact the LEP team on tel: 01482 485260 or NELC on (01472) 325949

• Email – [email protected] Deadline for Expressions of Interest = Monthly deadlines


Finance YorkshireSeedcorn Fund

Gerard Toplass Frillo Ltd



Neil Bangham & Richard StowWeedfree Limited

Neil Bangham – Managing Director

Richard Stow – Contracts Director

1967 – Weedfree

2002 – Weedfree-on-Track

2004 – Management Buyout (Railclear)

2011 – Finance Yorkshire (FY)

Introduced to FY by Brown Butler Chartered Accountants

Initial speedy application & acceptance process

Despite tough challenges FY investment managers been

extremely helpful

Seasonal finance provided by FY in Winter/Early Spring

during 2011, 2012, 2013 & 2014

From Mid 2012 we have gone from strength to strength

2013 very successful, 2014 trading very well so far

Would highly recommend FY services to other Companies



Mark de- Villamar RobertsEnvirodoor Ltd

presentation by:

representing:

Investee

Business

INDEX

1. INTRODUCTION TO ENVIRODOOR

2. BRINGING FINANCE YORKSHIRE ON BOARD & TIMELINE TO INVESTMENT

3. HOW HAS THE INVESTMENT HELPED THE BUSINESS?

4. OUR EXPERIENCE OF FINANCE YORKSHIRE

5. OUR FUTURE WITH FINANCE YORKSHIRE

Introduction to

a privately family owned group of companies

for over 40 years

“One of the World’s Leading Names

in Specialist Industrial

and Hygienic Doors”

………. based in Hull !!

Based in Hull, East Yorkshire and operating throughout the UK and Ireland via a network of sales and field engineers

Specializing in providing solutions, manufacture, installation & after-sales preventative maintenance of specialist industrial and hygienic door systems

Comprehensive service and repair business throughout the UK and Ireland with rapid response times and 91% “first time fix”

Suppliers of unique rapid action (bi-parting and vertical), translucent stacking, sectional overhead, hygienic and cleanroom doors

Over 40 years of research & development, manufacturing expertise, market leadership across an array of sectors offering “Tomorrow’s Technology – Today”

Our Scandinavian subsidiary company, Interdoor AB, based in Ystad, Sweden is one of Europe’s largest manufacturers of hygienic GRP doors and specialist steel doors

Product Range

• Acoustic doors• Cold store doors• Crash doors• Fast action doors• Fire doors• GRP Hygienic doors• Hangar doors• Hygienic Polyethylene doors• Specialist Industrial doors• Security doors• Sliding doors• Stacking doors• Steel doors• Swing doors• Waterproof / Wet room doors

Service and Repair

Experienced and highly trained door engineers

Qualified office based administration team

24 hour rapid response emergency visits

91% “first time fix”

Comprehensive knowledge of all industrial doors

Sectors

• Automotive

• Aeronautical/Aviation

• Food & Non-Food Manufacturing

• Warehouse & Distribution

• Energy

• Emergency Services

• Film/TV/Theatre

• Healthcare/Pharma & Medical

• Leisure

• Marine

• MoD

• Retail

Some of our Customers

WHAT WAS OUR INVESTMENT FROM

INVESTMENT

WHAT WERE THE OPTIONS?

OWNERS’ REQUIREMENTS

• Desire to “substantially grow” the business

• Growth was only possible with significant investment

• Not to be “endlessly” repaying debt

• Present a well capitalised business to the market

• No personal guarantees being offered

• A genuine belief that owning a smaller percentage of a much larger entity is better and more secure than owning a larger percentage of a smaller entity

MAINSTREAM LENDERS?

NO!

• Debtor book already taken

• No fixed assets of any material value

• No personal guarantees available

Therefore, no security to offer mainstream lenders which is a requirement

INVESTMENT

In order to

raise the required finance

AND

meet our requirements

our decision was

50% Equity and a 50% Mezzanine Finance

In total: £600,000

BRINGING

ON BOARD

AND TIMELINE TO INVESTMENT

TIMELINE

• Late May 2012 – contacted FY and met with Andrew Burton and team

• End June 2012 – Business Plan and Financials submitted

• Early July 2013 – Agreement in principle reached

• Mid July – introduced to Investment Director (Ash Chopra)

• End July 2012 – FY due diligence commences

• Mid August – Due Diligence Completed (incl DD on Swedish company)

• End August – Legal Process Commences

• End September 2012 – completion of investment

HOW HAS THE INVESTMENT FROM

HELPED?

• Investment made 1 October 2012

• 2012 Audited Accounts:

Turnover: £2,590,000

Net Loss: (£30,000)

• Significant investment at end 2012 and beginning of 2013 made in resource and marketing (resource and strategy)

• 2013 Audited Accounts:

Turnover: £3,800,000

Net Profit: £50,000

Growth since FY investment: 45%

THE NUMBERS SPEAK FOR THEMSELVES!

Could we have done this without investment?

… NO

EXPERIENCE OF

• General opinion that Equity Funders seek to “control” the business

What is our experience with FY?

• Initial high level of control (lasting 3 months)

• Imposition of high level reporting - different to what we were used to

• Once FY had seen the business was running well – very little control

• Quote from Envirodoor’s FY Portfolio Manager:

“This is your business, not ours. You run it in the way you want it run. I just want to make sure that we receive a return in 5 years and that you don’t go bust

in the meantime.”

FY’s Impact on business

New reporting measures - Initially a “pain” but only because it was “new” to us

BUT, once everyone in the business were used to the reporting systems:

FY’s requirements provided the business with:

• excellent reporting systems

• new KPIs to help run the business and assist it to grow

• easy analysis of key areas of the business using “dashboards”

• made the business easier to manage

Honest Appraisal:

“FY’s input and requirements have been

a huge help to the business and not a hindrance”

OUR FUTURE WITH

Need to repay loan and give return on investment!

BUT

IN ADDITION TO THIS:

Envirodoor has ambitious acquisition plans

“£1.2million available to Envirodoor in 2014 for further growth” from FY

It is hoped and intended that FY will support Envirodoor in both its strategic acquisitions in 2014 AND its organic growth plans

Envirodoor LtdViking Close, Willerby, Hull

East Yorkshire

HU10 6BS, UK

Telephone: +44 (0) 1482 659 375

www.envirodoor.com

Mark de-Villamar Roberts

Managing Director

[email protected]

+44 (0) 1482 659 375


Finance YorkshireFuture work…

• Work collaboratively with the Humber Local Enterprise Partnership and Local Authorities

• Develop the Finance Yorkshire brand and a recognised provider of growth finance to SMEs


Finance YorkshireMaking an application

• Call us to make sure it’s eligible 0845 649 0000 or make enquiry via website www.finance-yorkshire.com

• An Investment Manager will contact you to discuss.• Complete Application Form & the supporting

information when advised by the Investment Manager.

Finance YorkshireQ & A


Finance Yorkshire Ltd is a company limited by guarantee (Registered No 07075478). Finance Yorkshire Ltd (0845 649 0000) comprises three sub funds, Finance Yorkshire Equity Fund, which is managed by Viking Fund Managers Limited, Finance Yorkshire Small Loans Fund, which is managed by EV Business

Loans Limited and Finance Yorkshire Seedcorn Fund, which is managed by Enterprise Ventures Limited. Each of these Fund Managers is authorised and regulated by the Financial Conduct Authority.

finance yorkshire welcome

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