Our client is an established designer and distributor of ladies nightwear and lingerie, referred to us by his accountants. Having successfully traded for almost 20 years, they suffered a serious bad debt when their leading customer went into administration. Beer & Young were approached early in 2012 to source urgent funding once it became clear that the business could not survive without some external capital. We quickly generated interest from our investors and introduced a number of these to the owners of the business. Eventually they decided to proceed with an existing trade contact via a joint venture rather than accept one of the offers presented by our investors.
Ultimately this was not a successful union, and long story short, Newco was formed by our client and one of the original lenders introduced by Beer & Young has provided debt funding to enable the business to go forwards. The opening facility is £350,000; looking to significantly increase in the months ahead. We wish our client every success for the future. They have maintained their full customer base through this difficult period and are hugely optimistic about the future.
We are delighted to announce an investment completion which highlights our ability to move fast and deliver results.
Our client is an established technology company employing over 30 staff both in the UK and overseas. It enjoys a host of known clients in its sector and has the capacity to exploit markets around the globe.
Beer & Young were approached during the Summer to source urgent funding. The business had taken longer than anticipated to reach its current break-even point and the appetite by existing shareholders to further fund the business had receded. Whilst the future outlook was very positive, the business had reached a cash crunch whereby unless funding was received within three months, the business would be forced to close.
Beer & Young moved quickly, constructing our Turnaround Executive Summary, shortlisting relevant investors and presenting to them on behalf of our client. Within one week of take-on we had sourced an overseas trade group who were very keen to enter into this market and looking for acquisitions and/or joint ventures. Other investor meetings followed but it was clear that the trade group were the perfect match for our client.
Within weeks a soft loan was accepted by our client to cover urgent working capital requirements. Due diligence was undertaken and a partnership relationship entered into. Further investment has now followed giving our client the money they need to develop their business and deliver growth & profits.
The CEO KK commented:
“Thank you Beer & Young for all your efforts. You jumped into action, and quickly and efficiently delivered quality investors that provided a firm foundation for growth. We have a highly positive outlook going forwards.”
Late last year we were engaged by a small group of individuals who were looking to buy a crane hire business in the South West of England. They had some capital of their own but were looking for an outside investor to provide the bulk of the funds.
Within our network, we found the right investor who happened to be active in this sector in another part of the country. Terms between our client and investor were agreed and a deal was struck with the vendor. During due diligence the terms changed – as so often happens – and whilst this was going on the bank became reluctant and long story short, the deal fell away.
However, our client and investor decided shortly after to set up newco which was duly established in a location very close to the original company.
We understand the total deal value including asset funding is in excess of £2 million.
We wish them all the best for the future.
The directors approached us as they had an urgent funding requirement that couldn’t be satisfied through traditional lending sources. We were able to introduce them to a specialist lender in rapid time.
We are delighted to say that our lender and the directors have agreed terms and this business is now able to fund its working capital requirements. The business currently generates over £9 million of sales per annum.
For interest, the company provides a full range of produce, all sourced direct from the growers, locally sourced where possible, including fruit, vegetables, dry goods, milk cheese and bread.
New Capital: Undisclosed
The owner contacted us via our website looking for some urgent funding to cover short term working capital short fall in the business.
Our client is a thirty five year old engineering business in Scotland with nearly 200 employees.
Alongside our finance partners we introduced two lenders both of whom offered to fund the business. Our client signed off terms with one of the lenders and received funds within 4 weeks.
This funding solution was perfect for our client who could be said to be asset rich but cash poor. The company continues to thrive and is looking forward to a profitable 2012.
Location: East Midlands
This company was formed in 1993. As part of an agreement to change ownership it became a subsidiary of another in 2007. The company provides government approved training and accreditation in Level 2 (intermediate) and Level 3 (advanced) NVQ’s and now apprenticeships in specialist workplace skills, underpinned by delivering basic and key skills predominantly in the age 16- 24 age group. The company consists of a training centre and administration/ training facilities.
The Company has recently started struggling from financial issues due to the falling learner numbers as a result of the recession leading to a material drop in gross revenues, the high cost of salaries and contracted tutors which led to significant redundancy costs. The Company was also effectively funding the costs of the change of ownership.
The Directors had been unable to sufficiently reduce overheads fast enough in line with the fall in revenue together with the financing costs for the acquisition of the Company, which were very high in terms of interest and capital repayments.
After taking advice the directors engaged the services of Beer & Young LTD to assist them with the preparation of a CVA proposal. The terms of the proposal were that the creditors would be paid off over 5 years at a rate of 56p in the £1. The proposal was duly approved unanimously by creditors.
The company turnover for the previous annum was circa £500,000.
The managing director said
“We struggled through the toughest recession on record trying to manage accumulating debt not knowing where to turn to until recommended to Beer & Young.
A successful strategy in dealing with creditors, debtors, banks and other stakeholders was quickly devised with a voluntary arrangement being put in place facilitating a manageable way forward into the future and beyond.
The shareholders and directors are relieved, thankful and most grateful.”
The Company was formed in 2009 to be a social networking web based company for the 50+ aged generation. Contained within the website are general articles of interest, discussion forums, blogs and competitions all aimed at helping ‘silver surfers’ interact with others of their own generation. It offers through the website special discounted offers for the target age group on such things as insurance, household goods and travel. The website encourages interaction between visitors with people swapping views, ideas and findings amongst themselves. It provides opportunities to the 50+ aged audience on how to plan for the next stage of their lives and retirement and also how to harness the opportunities and freedom for the challenges that lie ahead.
The Company started to face financial difficulties when funding commitments failed to materialise due to the general economic downturn, advertisers reduced their revenue streams and then In the summer of 2011, HM Revenue & Customs obtained a County Court Judgement against the company for unpaid taxes. The last straw came when the launch of additional products for sale was delayed due to funding partner commitments.
In the previous year the turnover of the business was circa £500,000.
After consultations as to the options available, a CVA was constructed by Beer and Young so that the Company could continue trading. This would mean that the Company would be given the opportunity to pay off their creditors over a 5 year period at a rate of 56p in the £1.
Location: Eastern Home Counties
This company was incorporated at the later end of 2003 to operate as a transport and logistics contractor.
In 2008, as a consequence of new contracts and business secured, the Director anticipated a substantial increase in revenues and this required the relocation to the present larger site with attendant costs. As a result of the recession, that began to take effect within the first quarter of trading from the new yard, the anticipated increase in revenues did not materialise, with the result that gross earnings did not cover the increased cost base. The recession also meant further competition for work, which put pressure on margins and further depleted income. The continuing increases in fuel prices also effected gross margins. The insolvency of certain customers resulted in both loss of business and bad debts amounting to approximately £150,000 in the last three years. This led to inadequate capital base resulting in insufficient working capital to cope with the effects of the bad debts and loss of revenue with resultant adverse cash flow.
In the year prior to this annual turnover of the business was circa £3,500,000
The Company was part funded through an invoice discounting facility from a leading high street bank. The Company had also built up significant arrears with HMRC for both PAYE and VAT who were threatening to issue a petition to wind up the Company.
Due to these factors it was clear that whilst the Company was insolvent it should be allowed to continue trading and therefore a CVA was the best option available
Beer & Young were then instructed to assist the directors with dealing with both HMRC and the bankers and to draft the proposal on their behalf. The CVA was approved at a rate of 64 pence in the pound over 5 years.
Our client acquired a 20 year old business. The core business of the company was as engineers and designers of refrigeration and pipework systems.
In 2008 the company’s biggest client announced that it would be closing its Dartford premises, resulting in our client losing 80% of its turnover. In July 2011 our client’s main customer, who had replaced much of the work of the previous large client went into voluntary liquidation leaving our client with a bad debt of approximately £100,000. The loss of work with HS Environmental also resulted in a loss of some £250,000 in work in progress.
Prior to this, the previous year’s turnover was circa £3 million.
As a direct consequence of the loss of a major contract and the demise of our client’s newest largest acquisition, the Company’s finances had been fully depleted and cash flow was under pressure. This also means that tour client couldn’t take advantage of the considerable amount of work available. The company currently had work in progress of some £73,000 and a confirmed order book of £700,000.
In September 2011, the Directors sought the advice of Beer & Young Ltd who recommended that they make a proposal to creditors for a Company Voluntary Arrangement. Beer & Young Ltd were engaged to assist the Directors with the preparation of this proposal, which proposed payments over 5 years which anticipated a dividend at a rate of 96p in the £1. The CVA was duly approved by creditors.
New Capital: Circa £100,000
Our client is a young and talented British designer of bridal and eveningwear. In less than two years she has established a known brand, sold in numerous retail outlets, enjoyed global magazine exposure and her designs have been worn by celebrities and on national television.
Earlier this year however, the factory that produced the bridal collection closed down, leaving hundreds of dresses unproduced. Whilst these orders were fulfilled, working capital resources were seriously depleted leaving little room for error.
Beer & Young were introduced, quickly set to work and generated interest from eight private investors. Several meetings were held; one investor stood out and quickly offered terms. Within a further ten days shareholder agreements were signed and capital invested into the company account.
Our client was naturally delighted and offered the following comment:
“My business has been developing well for some time, but due to unforeseen circumstances, I found myself needing urgent funding support. My bank wouldn’t support me so I turned to B&Y. Not only did they resolve my funding issues, they helped me through the process and made it all simple. I am truly grateful for their efforts and recommend any business owner to contact them”.