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Finance in Cornwall 2016
Businesses trading for > 2 years
Scott Bentley - Partner
“Cornwall, we have lift off!”
pkf-francisclark.co.uk
.
Structure of morning
• Background, EU “calls”, grants and Banks (8:30am to 9:50am)
• LEP, Cornwall Chamber, FSB• Grants and Banks (intro)
• Funding and Business Support – stratified by age of business (10:10am to 11:20am)
• Equity, Business Support and Company presentations (11:40am to 1pm)
• State Aid• Crowdcube pitch..
• Q&A one to one/ Networking (1pm to 2pm)
pkf-francisclark.co.uk
• 8 minute presentations on:
• Invoice financing• International trade finance• Peer to Peer (unsecured)• Peer to Peer (secured)• Growth Funds - mezzanine• Growth Funds - equity• London Stock Exchange…• Get Set for Growth (Business Support)
Funding and support – for business >2 years old
Debt – Invoice Finance
John Hughes – RBS Invoice Finance
10th May 2016
What we’ll cover
03/05/2023Presentation information in footer 5
1. Getting paid what you are owed: reality check
2. What this means to UK businesses
3. What have businesses done?
4. What’s been the benefit?
5. How does Factoring work?
6. How does Invoice Discounting work?
7. How the invoice finance solutions work in practice
Getting paid what you are owed: reality check
52% of British SMEs are owed at least £10,000 each in late payments
British SMEs are owed £67.4 billion in unpaid invoices
60% of businesses have experienced late payments
Two-thirds of businesses have had to write off payments
Sources:
1 – ABFA, 2 BACS, 3 FSB, 4, Talking Business (All October 2015)
03/05/2023Information is classified as PUBLICSecurity may be required. Product fees may apply.
What this means to UK businesses
Cash flow problems
Restricted cash to invest
Wasted time on resource chasing payments
Need to write off bad debts
Limited growth and expansion opportunity
Reduced ability to secure early settlement or bulk purchase discounts from suppliers
03/05/2023r 8
So what have 43,000 UK businesses done?
· To manage their cash flow
· To support their growth
They have chosen a range of invoice finance solutions as an alternative to traditional funding such as overdrafts:
· Invoice discounting: to free up cash that’s trapped in unpaid invoices
· Factoring: remove the hassle of sales ledger administration
· Credit Protection: works alongside invoice discounting and factoring to lessen the impact of bad debt and customer insolvency
Information is classified as PUBLICSecurity may be required. Product fees may apply.
03/05/2023 9
What’s been the benefit?
Flexible funding that grows as the business’ sales grow
Business owners have more time and resource to focus on running the business
Protection against bad debt caused by the insolvency of customers
Businesses are supported if they already trade overseas, or if they’re looking to expand internationally
Businesses can access the funds they need to maximise opportunities and realise full potential
Freed up capital that would otherwise be tied up in unpaid invoices, so funds can be accessed more quickly
Information is classified as PUBLICInformation is classified as PUBLICSecurity may be required. Product fees may apply.
03/05/2023 10
How does Factoring work?
1 You invoice your customer as normal
2 Invoice details submittedusing FacFlow
3 We then advance you up to90% of the value of the invoicewithin 24 hours
4 Our experienced collectionsdepartment will then chasethe payment from yourcustomer
5 Your customer will then payus 100% of the value of theoutstanding invoice
6 We then give you the remainingvalue of the invoice less costs
90%
100%
Security may be required. Product fees may apply.
Information is classified as PUBLIC
03/05/2023 11
How does Invoice Discounting work?
1 You invoice your customer as normal
2 Invoice details submittedusing FacFlow
3 We then advance you up to90% of the value of the invoicewithin 24 hours
4 You run your sales ledgerand credit control
5 Your customer will then payus 100% of the value of theoutstanding invoice
6 We then give you the remainingvalue of the invoice less costs
90%
100%
Security may be required. Product fees may apply.
Information is classified as PUBLIC
03/05/2023 12
Security may be required. Product fees may apply.
How the invoice finance solutions work in practice
South West & Wales: ModuflexChallenge: Bristol manufacturer, was planning to open a second production facility in the city and needed funding to help this.
Solution: Invoice Discounting, Asset Finance and banking loan facilities.
Benefits: The Invoice Discounting facility has freed up funds, enabling Moduflex Limited to focus on growth and expansion without worrying about working capital.
Information is classified as PUBLIC
Thank youFor more information contact:John HughesBusiness Development Manager
M +44 (0)7917 087619E [email protected]
International TradeSimon King
BACKING YOUR AMBITION
GARETH OAKLEYManaging Director of SME Banking, Lloyds Bank
15
Our goal is to be the best bank for our clients. We’ll invest time in understanding your business,
and commit to building a strong local banking relationship
focused on helping you achieve your goals.
16
INTERNATIONALLY – OUR GLOBAL CONNECTIONS
COVERING 100 COUNTRIES
Countries
20
28
30
14
8
100
Continent
Africa
Americas
Asia
Europe
Middle East
Local Network Banks
Standard Bank, Standard Chartered and local regional banks
Scotiabank and local regional banks
ANZ, ICICI and Standard Chartered
Crédit Agricole and local regional banks
Leading local banks
OUR OFFERING
Extensive global connections through arrangements with key network banks.
In-country expertise and specialist knowledge of the local legislative environments.
Comprehensive guarantee solutions delivered with our key network banks.
Indicative and competitive up front pricing, with individual quotes provided upon request.
SUPPORTING INTERNATIONAL TRADE – EFFICIENT BANK SOLUTIONS
17
Our products and services are designed to make international trade as smooth as possible.
InformationOur online solutions provide information and fingertip control:
Lloyds Online Trade Services – view, monitor and manage your trade activity.
Arena – our comprehensive e-solution combining foreign exchange and money markets trading with economic insight.
TravelLink – order currency online for secure delivery to any UK based office.
SecurityTo help you trade more securely internationally, our services include:
Urgent and non-urgent payment mechanisms.
Documentary credits or collections.
Bonds and Guarantee services.
Single European Payment Area (SEPA) Direct Debits.
100% of transactions are processed in the UK
EfficiencyInternational accounts:
Euro accounts for businesses trading in Euros.
Foreign currency accounts for businesses making transactions in foreign currencies.
Currency loans for trading internationally.
PartnershipIn March 2015 Lloyds Bank was the first UK Bank to enter into a strategic partnership with UK Trade and Investment (UKTI).
This two year partnership will help UK businesses to export and to attract inward investment into the UK.
Its aim is to help UK exports reach £1trn by 2020.
It will increase the number of businesses helped by Lloyds Bank to trade internationally to 75,000 by 2017.
It is supporting efforts to double the UK’s stock of foreign investment by 2020.
18
OUR INTERNATIONAL PRODUCT CAPABILITIES – OVERVIEW
A simple and cost-effective way to enable payments between key network banks.
Key capabilities to keep your international trade running smoothly.
Documentary Collections
Letters of Credit
Bonds & Guarantees
Foreign Exchange (FX) Services
To support you to deal confidently with your suppliers or your buyers, secure in the knowledge that payment will be made if the transaction is carried out according to the terms, and is crucially supported by a bank guarantee of payment.
To support your ability to perform under a contract or meet payment obligations. They may also be used to underpin any bid to win new business.
A good way to help manage exchange rate risks and can be tailored to your specific needs.
To help you to improve your credit management and free up cash flow to support business growth.
A comprehensive range of finance solutions to help fund your working capital, whether buying or selling.
Invoice Financing
Trade Finance
To support your trade needs
WORKINGCAPITALMANAGEMENT
RISKMANAGEMENT
Stage 2. Tailor financial solutions to meet your needsThrough building the timeline, we can provide bespoke trade solutions for your needs in both risk management and working capital.
Stage 2Stage 1
19
TAILORED TRADE SOLUTIONS – EXAMPLE
Putting your needs first, our specialist teams will work with partner networks and use expert trade knowledge to deliver the right banking solutions.
-30 0 30 45 100
TenderingContract Signed
Goods ShippedSupplier Paid
Goods Arrive Invoice Sent
Invoice Paid
Letters of Credit
Trade FinanceInvoice
Financing
Letters of Credit
Bonds & Guarantees
Commercial events and timelines
Improve Working Capital
Mitigate Risk
Client needs Tailored solutions
Stage 1. Initial assessment to understand your needsBy conducting an initial timeline assessment, we get a full understanding of the critical commercial and geographic events in your trade cycle.
60 70
Documentary Collections
Documentary Collections
Illustrative purposes only
Foreign Exchange (FX) Services
20
IMPORTANT INFORMATION
This presentation is for information purposes only. It is intended as a summary only and whilst it contains some information about the potential risks and benefits of various products and services it should not of itself form the basis for any investment decision. Whilst Lloyds Bank plc has exercised reasonable care in preparing this presentation and any views or information expressed or presented are based on sources it believes to be accurate and reliable, no representation or warranty, express or implied, is made as to the accuracy, reliability or completeness of the information with other information which you have received from us, you should refer this to your Lloyds Bank relationship team for clarification.
If you have a hearing or speech impairment you can use Text Relay (previously Typetalk) or if you would prefer to use a Textphone, please feel free to call us on 0345 601 6909 (lines open 7am-8pm Monday-Friday and 9am-2pm Saturday).
Calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help improve our quality of service.
Please note any data sent via email is not secure and could be read by others.
Lloyds Bank plc registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Telephone 0207 626 1500.
Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Registration Number 119278. We subscribe to The Lending Code; copies of the Code can be obtained from lendingstandardsboard.org.uk
Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS). Please note that due to FSCS and FOS eligibility criteria not all Business customers will be covered.
Invoice Finance, Asset Finance, Asset Based Lending and Debtor Protection facilities are provided by Lloyds Bank Commercial Finance. Payroll Finance facilities are provided by Cash Friday. Lloyds Bank Commercial Finance and Cash Friday are trading names of Lloyds Bank Commercial Finance Ltd. Registered office: No.1, Brookhill Way, Banbury OX16 3EL. Registered in England and Wales no.733011. Lloyds Bank Commercial Finance Limited is part of Lloyds Banking Group and is authorised and regulated by the Financial Conduct Authority for activities relating to certain types of consumer credit which are regulated under the Consumer Credit Act 1974 and by the Financial Services and Markets Act 2000. We are not deposit takers and are not regulated by the Prudential Regulation Authority. The provision of credit or leasing services by us is subject to your meeting our Credit approval. Please ensure that you only apply for credit or leasing services that you can comfortably afford.
Lloyds Bank Private Banking Limited. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2019697. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under number 122626.
Lloyds Bank plc is an introducer to Arthur J. Gallagher Insurance Brokers Limited who arrange and administer Lloyds Bank Business Insurance Services and source products from a panel of insurers.
Introductions will be made to selected companies within the Lloyds Banking Group. The Lloyds Banking Group includes companies using brands including Lloyds Bank, Halifax and Bank of Scotland and their associated companies. More information on the Lloyds Banking Group can be found at lloydsbankinggroup.com
21
Funding Circle
Jeremy CrinallBusiness Development Manager South West
Simple, affordable business loans
“At present the largest four banks account for over 80% of UK SMEs’ main banking relationships.
Many SMEs only approach the largest banks when seeking finance…in the case of the first time SME borrowers the rejection rate is 50%.”
Gov.uk, 2014
“ Over 50 per cent of business owners have used or considered using alternative finance such as peer-to-peer (P2P) lending, crowdfunding, invoice
finance, property finance and asset finance. ”
lsbf.org.uk, 2016
What's the difference?
Traditional lending
Market place lending
A simple model: Lenders can spread risk by lending small amounts to hundreds of businesses
Business loan
Loan parts
Loan parts
Loan parts
Loan parts
Loan parts
Loan parts
Loan parts
Loan parts
Loan parts
The global leader in marketplace lending for small businesses
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
0
50
100
150
200
250
300
350
400
1 3 4 4 6 12 14 14 21 27 33 4355
6586
99122
175199 226
303
372
12 14 14 21 27 33 43 55 64 80 83111
150 167 170222
248
0.7745.92744316.701954
11.343063
24.77959131.841632
56.000971
81.340363
106
18
UK US CE Total
August 2010Founding of
Funding Circle
October 2015Launch in Germany, Spain &
Netherlands (acquisition)
October 2013Launch in the US
(acquisition)
Originated over $1.85 BN to thousands of small businesses since 2010
• £531 million lent in the UK in 2015 giving 90% YoY growth• # 1 player in the UK with ~50% market share• c. 500 employees globally
March 2015Series E round with $150M funding from DST, Temasek, Blackrock, Baillie Gifford,
Sands Capital
FC Q
uarte
rly N
ew L
endi
ng ($
m)2
In Q1 the Funding Circle platform was the 5th largest net lender to SMEs in the UK
Q1 Net lending to UK SMEs£m
United Trust Bank
Santander
OneSavings Bank
Yorkshire Building Society
Arbuthnot Latham
Funding Circle
Close Brothers
Metro Bank
Aldermore
Lloyds Banking Group
22
27
37
38
88
96
111
125
157
232
Source: Bank of England - Funding for Lending Scheme Extension
• We are not a Bank - Funding Circle do not lend our own money
• Funding Circle are an online market-place – where investors lend directly to SME businesses
• £147m lent to SME’s in South West (May 2016)
• £24.9m Lent to SME’s in Cornwall since 2010 increase from £5.2m in May 2015 (5 X increase in 12 months)
• Liquidity depends on both the ‘Fractional Retail’ and ‘Institutional Whole Loan’ market-place
• Institutional investors agreed to invest £127m & $434m in our ‘Whole Loan’ market-place – UK & US & CE
Market-place lending
• The Government lent an initial tranche of £20m through Funding Circle in 2013
• A further £40m has been committed in late 2014
• Forms part of the Business Finance Partnership scheme (British Business Bank)
• 10% of every loan on the platform is financed by Government
The Government’s commitment to Funding Circle
Unsecured Loan
£5k - £250kSuitable for a wide range
of purposes6 months to 5 year termFixed interest rates from
6% Arrangement fees between
3-4% of loan amountNo ERP’s
Secured Loan
£150k - £1m All asset security
agreement Charge on specific
properties or assets
Types of borrowing
£150k-£3m Development Commercial Investment Fixed interest rates No early
repayment fees Circa 8% pa.
Property Finance
Asset finance
£20k - £1m Suitable for a wide
range of hard assets Hire purchase Flexible on LTV–100%
considered Individual deals up to
£250k, credit lines of up to £1m
Any business, any purpose……
Loan Purpose
Working capitalExpansion/growth Cap-italAsset purchaseOtherResidential property developmentAsset financeRefinancing a loanTax paymentTax liabilityAnnual purchaseCommercial mortgage
Sector
Automotive FinanceLeisure & Hospitality Education & TrainingI.T and Telecommuni-cations
Agriculture
Consumer Services HealthcareManufacturing and Engineering
Other
Professional and Business Support
Property and Con-struction
Retail Transport and LogisticsWholesale
Minimum FC criteria includes
Companies:
History:
Directors:
Accounts:
Ownership:
Guarantees: Loan supported by PG
Beneficial ownership in UK
Min turnover £50,000, Upward growth trend and no consecutive losses.
Trading for 2+ years with at least 2 years of filed accounts
A good credit history – no CCJs, CVAs, CVLs or liquidated companies within 3-4 years. UK resident.
Limited companies, limited liability partnerships & non limited
Thank you for listening
Jeremy CrinallBusiness Development [email protected] 667 2250
Secured LendingDavid Brown – Managing Director
38
We look at things differently
What do we do?
39
We are an ENABLER
• Simple
• Mobilising money in the countryside
• Enabling people to utilise property assets
• People Power
• Fair deal
• Help local community
40
Secured Lending• All loans secured against land or property.
• Not your primary residence (or a property in which you
reside in more than 40%).
• 60% Loan to Value
What We Offer Lenders
The ability to support and invest in their local community whilst receiving a competitive interest rate
* Based on the amount lost by a lender (excludes temporary delays in interest repayments)
• Minimum lending value of £25,000
• Secured return of 6.5% paid monthly
• Zero defaults to date*
• Lending can be to a specific borrower as a sole Lender, or as part of a ‘Lender Pool’
What We Offer Businesses
The ability to utilise property assets to help business grow or boost working capital
• Interest-only repayment at 6.5%
• All lending secured against property
• Offer up to 60% LTV
• Loans of 3 months - 5 years
• We take a holistic view: choosy but fair
43
Best Lending Platform for SMEs• Secured• Straightforward• Fast Enabler• Attractive rate 6.5%• People business• Local focus• Award winning
Proudly Cornish
• £93m invested in the South West.
• Provide a way to keep local money local• Provided funding to kick-start major Cornish projects
i.e. Truro development project resulting in Stadium for Cornwall.
• Head Office in Launceston.
* Source: BRDC SME Finance Monitor Q3 2015
www.folk2folk.comTwitter.com/Folk2FolkUKFacebook.com/folk2folk
Linkedin.com/company/folk2folk
INTRODUCTION TO GROWTH CAPITAL
Paul Julian
Relationship Director
GROWTH CAPITAL HELPS FILL THE FUNDING GAP
COST EFFICIENT ALTERNATIVE TO EQUITY / UNIQUE BANK PRODUCT
Debt product
Not equity risk
Interest only loan
Preserves cash within the business
Cash flow lending
Not limited to tangible security
Structured loan
Flexible
Low cost alternative
Hands on approach
Experienced team
Strong relationship
All banking Santander
Unique bank product
OUR BROAD CRITERIA
Privately owned business, annual sales
typically £2m - £50m
Growing businesses that are profitable and
cash generative
Proven management team. Good finance
function
Investment in opex / capex / bolt-ons. Proven product or service to roll out
At least 3 years of financial history
A STRUCTURED PRODUCT
3.0% arrangement fee
2.5% commitment fee
L+5% plus 5% rolled up
5 year maturity
Comprehensive security package
Full banking
No change of control
No annual fees
No prepayment fees
No penalty for early prepayment
External due diligence
No automatic requirement for PGs
Integrated Financial Model
Restrictions on use of cash / distributions
No further indebtedness
Subordination of other loans
Financial covenants
Quarterly testing
Monthly MI
£1.5m Growth Capital
Childcare and education
60 new jobs
September 2014
£1.35m Growth Capital
Vibration monitoring
62 new jobs
July 2014
£1m Growth Capital
Engineering consultancy
95 new jobs
July 2014
£0.75m Growth Capital
Cloud brokerage services
35 new jobs
May 2014
£1.6m of Facilities
Bakeries
45 new jobs
December 2014
£1.8m of Facilities
Services
43 new jobs
September 2014
£2.4m of Facilities
Supplier & Manufacturer
19 new jobs
December 2014
SOME RECENT SMEs WE HAVE SUPPORTED….
£6.0m of Facilities
Trampoline parks
February 2016
£5.8m of Facilities
Fulfilment & global delivery services
October 2015
£10.9m of Facilities
Clothing retailer
400 new jobs
£0.8m of Facilities
Sea salt retailer
25 new jobs
£4.2m of Facilities
Taxi service operator
30 new jobs
March 2015
August 2015 August 2015 April 2015
£undisclosed
Credit reporting agency
£0.5m Growth Capital
Healthy fast food chain
40 new jobs
October 2014
Breakthrough:
Helping Your Business Go Further
Breakthrough
Knowledge
Meet British business
legends face to face and
soak up their expertise at
exclusive events.
Breakthrough
Talent
Support to find and keep
the best talent, including
access to 2,000 subsidised
graduate interns.
Breakthrough
International
Connect with the pick of
190,000 international
contacts who can help you
break into new markets.
Breakthrough
Connections
Keep one step ahead by
joining our exclusive
network of entrepreneurs
and business leaders.
Breakthrough Finance
Funding beyond the
ordinary, including a
unique financing solution to
fuel your growth ambitions
CUSTOMER ADVOCACY
“It is mind-blowing that a bank would be that
entrepreneurial and supportive. They are a
breath of fresh air.”
Paul Bradford, Southern Communications, CEO
“Santander gets close to you in terms of
understanding the business and our Relationship
Director really understands the nuts and bolts of
what we’re doing and the issues we have.”
Mike Bishop, Finance Director and CoFounder, YourVets
“I think the Growth Capital investment is a really
well thought-out product. It allows us to draw
down funds as the company grows without having
to keep going back to the bank.”
Tim Hobbs, CFO, Vital Ingredient
“Before the deal we had 35 employees but only
one sales person. Now we have the resources to
grow the team and hire people to manage direct
sales, partners and channels.”
Mat Atkinson, CEO, ProofHQ
“It’s fascinating to see that entrepreneurship is
a genuine objective of Santander and not just words.”
Geoff van Sonsbeeck, co-founder,Isabella Oliver
“The Santander team got to know us individually
and we felt the approach of the team was
sensible and pragmatic.”
Graeme Scott, CEO, Bertram Nursery Group
“The expertise of the people who came in from
Santander was completely different from the
other banks... They could see the frustrations of a
small business. They also understood that a small
business needs time to do things.”
Andy Hill, CEO, I Like Music
DISCLAIMER
The information and opinions in this document have been compiled by Santander Corporate
Banking in good faith from sources believed to be reliable. The information and opinions
contained in this document are published for the assistance of the recipients but they should
not be relied upon as authoritative or definitive and should not be taken into account in the
exercise of judgements by any recipient. Distribution of this document does not oblige us to
enter into any transaction. Any offer would be made at a later date and subject to contract,
satisfactory documentation and market conditions. Nothing in this document constitutes
investment, legal, tax or accounting advice and we recommend you do not make a decision
based on this information without first taking the appropriate advice. This document is
intended for recipient only, should not be disclosed to retail clients, and should not be
distributed to others or replicated without the consent of Santander Corporate Banking.
Santander Corporate Banking is the brand name of Santander UK plc, Abbey National
Treasury Services plc (which also uses the brand name of Santander Global Banking and
Markets) and Santander Asset Finance plc, all (with the exception of Santander Asset
Finance plc) authorised and regulated by the Financial Services Authority, except in respect
of consumer credit products which are regulated by the Office of Fair Trading. FSA
registration numbers: 106054, 146003 and 423530 respectively. Registered offices: 2
Triton Square, Regent’s Place, London NW1 3AN and Carlton Park, Narborough LE19 0AL.
Company numbers: 2294747, 2338548 and 1533123 respectively. Registered in England.
Santander and the flame logo are registered trademarks.
Growth Capital Investors
Introduction to BGF
Ned Dorbin10 May 2016
Growth Capital Investors
BGF is an investment firm that provides growth capital of £2m - £10m to UK businesses with turnover of > £5m.
Who we are. Funding for growth and equity release
Investment of £2m – £10m for a minority stake
Long-term and patient capital, no forced exit
Access to huge network and support
Fast and focused investment process
109
£20m
88£5.5m£2.6bn
£700m 19,300
11
£100m
8
£17m
£15m
companies backed by BGF
average turnover of companies at time of investment
experienced non-executive chairmen and directors introduced to investee
companies
average first investment
combined turnover of all companies in portfolio
Total amount committed
people employed across the portfolio
different sectors
Amount of follow-on investment
offices across the UK
the most invested in a single company
Realised gains (from exits)
(£250m in 2015)
Growth Capital Investors58
Growth Capital Investors
Investment of £2m-£10m
Cash-in: to support long term growth
Cash-out: for existing shareholders
Equity stake of up to 40%
Always a minority partner – you retain control
No closed fund pressures Patient capital. No drag rights, no forced exit
What we offer. Working alongside the banks, BGF provides growth capital in a way that meets companies’ needs.
Growth Capital Investors
Flexible structures – equity / loan notes
Meets the needs of the company and shareholder
Fair legal approach Less onerous investor legal protections
Fast and focused investment process Minimises disruption and fees
More than money Access to impressive network and support
What we offer. Working alongside the banks, BGF provides growth capital in a way that meets companies’ needs.
Growth Capital Investors61
BGF contacts in the South West
James AustinInvestor
[email protected] 819093
Alex GarfittInvestor
[email protected] 582021
Greg NormanInvestor
[email protected] 747302
Edwin DaviesInvestor
[email protected] 384983
Paul OldhamRegional Director
[email protected] 657697
Sarah LedwidgeInvestor
[email protected] 232034
Dan TapsonInvestor
[email protected] 904443
Ned DorbinInvestor
[email protected] 682195
Alex SnodgrassInvestor
[email protected] 781293
Growing your business on the public equity markets
Claire DorrianLondon Stock Exchange
10th May 2016
63
A Choice of Routes to Market
Private Equity
Venture Capital
Seed Capital
Business Angels
Friends Family
Start - Up Early Stage Expansion Consolidation & further capital raising
Diversification of investors, M&A and International Expansion
Concept & seed stage
Fund
ing
requ
irem
ent
£500k
£1m
£100k
£50k
£150m
£1bn
Strategic consideration
64
AIM - A market for smaller companies
Market Cap Profile of AIM Companies
£0 - 2m £2 - 5m £5 - 10m £10 - 25m £25 - 50m £50 - 100m £100 - 250m £250 - 500m £500 - 1bn £1bn+
104
124 130
191
155
119106
45
175
Source: London Stock Exchange statistics, 31 March 2016*23 companies either suspended or undetermined value
65
Diverse Sector Representation
*ICB industry classification
Oil & Gas; 113
Basic Materials, 156
Industrials; 173
Consumer Goods; 59Health Care, 86
Consumer Services; 109
Telecommunications; 15
Utilities; 13
Financials; 182
Technology; 114
Source: London Stock Exchange statistics, 31 March 2016*23 companies either suspended or undetermined value
The sector diversity of AIM has contributed to its success and robustness through sector and economic cycles.
113Oil &Gas
156Basic Materials
173Industrials
59Consumer Goods
86Health Care
109Consumer Services
15Telecom
13Utilities
182Financials
114Technology
66
AIM Admissions Activity
Source: London Stock Exchange statistics, 31March 2016*23 companies either suspended or undetermined value
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD
0
100
200
300
400
500
600
123145
10775
102
277
177160 162
355
519
462
284
114
36
102 9071
99118
61
15
Series3 International UK
The number of admissions has reduced post financial crisis, as other private sources of capital emerge and companies take longer to prepare for IPO. However, the median fundraising amount at admission has doubled.
67
Fundraising activity on AIM
Source: London Stock Exchange statistics, 31 March 2016*23 companies either suspended or undetermined value
19951996
19971998
19992000
20012002
20032004
20052006
20072008
20092010
20112012
20132014
2015
2016 YTD
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Further New
AIM investors support companies at IPO and throughout their life on market, as evident from the £55 billion raised through further fundraisings since 1995, compared to £41 billion at admission.
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Benefits for companies
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Diverse & deep pool of capital
Strong support from institutions
Funding for acquisitions & expansion to new markets
Access to capital Wide support network
Nominated advisers
Accountants
Lawyers
Banks/Brokers
Analysts
Financial PR / IR
Media
Profile
Visibility
Bargaining power with customers & supplier
Access to incremental research coverage
Marketability of stock
Global peer group
Balanced regulatory approach
Disclosure requirements tailored to growing companies
Based on EU FSAP Directives & UK Prescribed Market Regime
Local & International investor confidence in regulatory framework
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Prepare Ahead
Early Investor Engagement is
Key
Early preparation is critical - very hard to accelerate an IPO process Increasingly common practice to meet investors early (12 months ahead) – therefore need to work on key
financials, KPIs for the business, equity story well in advance
The practice of “early look” engagement with a number of the key investors has been very valuable: Feedback for the Company and owners at an early stage on the business model, the management team
and likely valuation parameters Investors get an opportunity to build a rapport with management at this early stage, enhancing their likely
participation at the IPO
Demand Patterns are Shifting
Maximising demand means understanding the dynamics within the investor community: Long only vs hedge funds UK vs. Europe vs. US vs. Asia Retail participation
Consider complementary distribution platforms in IPO syndicates to tap all of these pockets
Current Investor Appetite
London - Lessons from Recent IPOs
Recent ITFs indicate broad interest across sectors (tech, fintech, industrials, support services) With plenty of potential IPO supply into 2016, investors will continue to be selective and differentiation of equity
story has become even more important – size, simplicity of story and valuations matter! Seeing more structures to de-risk IPO execution - shortening timetables, stealth marketing (no intention to float)
anchor / cornerstone orders, reverse into shells (e.g. BCA, Iglo) etc.
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ELITE – a business support programme for private companies
78 companies have joined the UK programme since April 2014 ranging in size and sector.
£1bn + Aggregate revenue
9,700Aggregate employees
38Locations
19Sub sectors
Industrial Goods and Services
Technology
Media Retail
Telecomms
Oil and GasTravel & Leisure
Food & BeverageHealthcare
10 companies 20 companies
7 companies 12 companies
2 companies
3 companies 2 companies
12 companies 2 companies
Fintech / Financial Services
4 companies
Chemicals
1 company
Property
2 companies
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A Structured Engagement Over 3 Phases
Delivered in partnership with Imperial College Business School in the UK, ELITE will enhance the growth prospects of member companies through a unique three-part package.
Continued access to the entire ELITE community across Europe via the online platform
PHASE 1 Stimulates company review
A comprehensive programme, delivered with entrepreneurs, investors and advisers, to stimulate organisational review and change.
Readiness Survey Diagnostic Interviews
PHASE 2 Plan for change
Practical and technical workshops designed to reflect on company-specific issues and plan for change with the support of the ELITE Partner network.
PHASE 3Capitalise on the benefits
Utilise the ELITE community and learnings from the first two phases to access new business opportunities and consider funding options and processes to explore in more detail.
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A Vibrant Ecosystem Across Europe
+ Others+ Others
+ Others+ Others
+ Others
150+ELITE Partners
100+ELITE Investors
380+ELITE companies
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LSE’s Equity Primary Markets Team
Global Head of Primary Markets John Millar +44 (0)20 7797 1586 [email protected]
Relationship ManagementRegion Telephone Email
UK Marcus StuttardTom AttenboroughMark FahyClaire DorrianJames Clark
+44 20 7797 3364+44 20 7797 3747+44 20 7797 6396+44 20 7797 2074 +44 20 7797 1863
[email protected]@[email protected]@[email protected]
Russia, CIS, Asia – Pacific Jon Edwards (Beijing)Ayuna Nechaeva (London)Yi Xie (HK)
+44 20 7797 1599+44 20 7797 4386+852 3555 6395
[email protected]@[email protected]
India, Middle East, Africa Ibukun AdebayoJasmine Arora
+44 207 797 1085+44 20 7797 1868
[email protected]@lseg.com
Americas Sarah E Baker (New York)Chris Mayo
+1 917 582 1815+44 20 7797 3134
[email protected]@lseg.com
Continental Europe Luca Peyrano (Milan)Axel Kalinowski
+39 0 272 426291+44 20 7797 4108
[email protected]@lseg.com
Research and Product Development Market Telephone Email
Main Market, AIM, PSM, SFM, ELITE and ATT Only
Darko HajdukovicUmerah AkramSarah J Baker Emma TitmusLouis DaviesShengYuan WuHetal Patel
+44 20 7797 3306+44 20 7797 4707+44 20 7797 1542+44 20 7797 1464+44 20 7797 1633+44 20 7797 4096+44 20 7797 1043
[email protected]@[email protected]@[email protected]@[email protected]
For further information refer to www.lseg.com
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This document has been compiled by the London Stock Exchange plc (the “Exchange”). The Exchange has attempted to ensure that the information in this document is accurate, however the information is provided “AS IS” and on an “AS AVAILABLE” basis and may not be accurate or up to date. The Exchange does not guarantee the accuracy, timeliness, completeness, performance or fitness for a particular purpose of the document or any of the information in it. The Exchange is not responsible for any third party content which is set out in this document. No responsibility is accepted by or on behalf of the Exchange for any errors, omissions, or inaccurate information in the document.No action should be taken or omitted to be taken in reliance upon information in this document. The Exchange accepts no liability for the results of any action taken on the basis of the information in this document. All implied warranties, including but not limited to the implied warranties of satisfactory quality, fitness for a particular purpose, non-infringement, compatibility, security and accuracy are excluded by the Exchange to the extent that they may be excluded as a matter of law. Further, the Exchange does not warrant that the document is error free or that any defects will be corrected.To the extent permitted by applicable law, the Exchange expressly disclaims all liability howsoever arising whether in contract, tort (or deceit) or otherwise (including, but not limited to, liability for any negligent act or omissions) to any person in respect of any claims or losses of any nature, arising directly or indirectly from: (i) anything done or the consequences of anything done or omitted to be done wholly or partly in reliance upon the whole or any part of the contents of this document, and (ii) the use of any data or materials in this document.Information in this document is not offered as advice on any particular matter and must not be treated as a substitute for specific advice. In particular information in the document does not constitute professional, financial or investment advice and must not be used as a basis for making investment decisions and is in no way intended, directly or indirectly, as an attempt to market or sell any type of financial instrument. Advice from a suitably qualified professional should always be sought in relation to any particular matter or circumstances.The contents of this document do not constitute an invitation to invest in shares of the Exchange, or constitute or form a part of any offer for the sale or subscription of, or any invitation to offer to buy or subscribe for, any securities or other financial instruments, nor should it or any part of it form the basis of, or be relied upon in any connection with any contract or commitment whatsoever.London Stock Exchange and the London Stock Exchange coat of arms device are registered trade marks of London Stock Exchange plc. Other logos, organisations and company names referred to may be the trade marks of their respective owners.
© May 2016London Stock Exchange plc
10 Paternoster SquareLondon EC4M 7LS
Telephone +44 (0)20 7797 1000www.lseg.com
Legal Disclaimer
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DAVE LEAMAN
BUSINESS SUPPORT
76
A FULLY FUNDED INVESTMENT READINESS AND GROWTH SERVICE FOR AMBITIOUS
BUSINESSES
ACROSS THE SOUTH WEST
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WHO DO WE SUPPORT?
S.M.E. BUSINESSES
ANY AGE
WHO HAVE AMBITIONS TO GROW
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• Financial appraisal• Cashflow forecast• Profit & Loss forecast• Business plans• Identify appropriate funding sources
• Funding application assistance• Investor presentation/pitches
ACCESS TO FINANCE EXPERTS
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ACCESS TO SALES/MARKETING EXPERTS• Sales & Marketing Diagnostic• Access to your Market• Customer Needs• Value Proposition• Marketing Strategy• Sales Pipeline
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DELIVERED VIA…Workshops / 1:1s / Masterclasses / Drop-in sessions
Finance
Help you get the money you need
to take your company forward
Sales & Marketing
Skills & Knowledge
Create, develop and strengthen marketing and sales strategy
Develop world-class skills and
knowledge
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• Already supporting: 1,103 clients
• Already raised: £3.2million
• Jobs created/safeguarded: 120
Success so far this year – Q1 2016…
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- Visit our stand
- getsetforgrowth.com
- Tel 0800 587 7707
GET IN TOUCH
pkf-francisclark.co.uk
BreakSession 3 start time
11.40am