The Adviser – Winter 2011/12

Please follow this link to download your copy of the latest edition of Hart Shaw’s newsletter, The Adviser.

The Adviser - Winter 2011/12

 

In this issue we talk about the online filing laws which now affect all businesses, how to successfully manage your business in the current economic climate, what to consider if marketing your business for sale, tax penalties and a review of a recent seminar which focussed on the issues surrounding acquiring funding for business growth.

In lighter news, we would also like to introduce you to our Sheffield based charity, the Sheffield Royal Society for the Blind, our sponsorship of Westbourne School’s Maths Award and our involvement in the Derwent Wye Fine Art sculpture exhibition.

Please also see below for details of a special offer to Hart Shaw clients from Sugarcane Creative, one of Hart Shaw’s business partners.

Should you have any questions about any of the articles you can contact The Adviser by email at: adviser@hartshaw.co.uk or you can reach the authors directly via the contact details at the end of each article.

To download Hart Shaw’s other newsletters and client briefings please visit the newsletters page of our website at: www.hartshaw.co.uk/newsletters.htm.

We hope you find our latest articles of interest and we welcome your feedback on any aspect of The Adviser, or any suggestions for future editions. 

Brendan Hall, Marketing Co-ordinator

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Marketing offer to Hart Shaw clients

Sugarcane Creative, the Sheffield based Graphic Design and Marketing Agency are pleased to launch their new logo design packages, available until end of February 2012. You can find out more at www.yorkshirelogodesign.co.uk. Any project proceeding before the end of January will receive a 10% discount.

Sugarcane Creative offer brand identity, logo design, all types of literature, web design, newsletters, campaign promotions, exhibition materials, POS and marketing strategy.

JMC Aquatics Limited acquires aquatics division of Pedigree Wholesale Limited

JMC Aquatics Limited, the leading importer and wholesaler of ornamental fish and accessories, has acquired the aquatics division of Pedigree Wholesale Limited for an undisclosed sum.

Sheffield based accountants and business advisers, Hart Shaw and law firm Wake Smith, acted on behalf of JMC.

Pedigree Aquatics is based in a 14,000 ft² leasehold facility in Nottingham and has a broad base of trade accounts which will compliment the existing JMC business. Jane Flaherty, Managing Director of JMC, commented: “Pedigree is renowned for its quality and service and is a fantastic strategic fit with the core JMC business. The opportunity to acquire the Pedigree business made excellent strategic sense as it allows JMC to service a larger client base whilst maintaining the quality of our service. Already there is incredible enthusiasm amongst our customers and suppliers. The support we received from Hart Shaw and Wake Smith was invaluable and ensured that the transaction was delivered on time”.

Steve Bell, Head of Corporate Finance at Hart Shaw said: “As a long standing client of the practice we welcomed the opportunity to assist JMC with this transaction. It is clear that the acquisition of Pedigree is the first phase of a long term strategic plan to develop the business. The fact that we were able to structure a transaction that minimized the risk has meant JMC can take this first strategic step safe in the knowledge that the core business is secure.”

Barry Gregory, Partner at Wake Smith LLP, commented “Wake Smith has acted for JMC for many years and were delighted to have done so on this occasion. Working closely with Jane and Hart Shaw we were pleased to have been able to assist JMC in completing this exciting stage of their ongoing development plan”

Hart Shaw news

£95m boost for small businesses

Small and medium sized businesses in England could benefit from £95 million in government investment.

The government funding, announced on 10 November will support small and medium-sized enterprises (SMEs) considering investing in new capital assets. The government expects the funding to unlock around £500 million of new investment and create at least 4,000 jobs.

The money forms part of the government’s £1.4 billion Regional Growth Fund, which supports projects that can create jobs, are based in areas dependent on the public sector and are supported by private sector investment.

The new scheme will provide grants designed to support SMEs considering investment in new capital assets and creating new employment but which have been unable to secure commercial funding for their projects.

These schemes will directly help SMEs that want to invest and create new jobs. They will deliver a shot in the arm to local communities and help small businesses drive local growth.

RBS, NatWest and HSBC have agreed to facilitate the distribution of the £95 million. To qualify for the scheme run by NatWest and RBS, SMEs need a turnover of less than £25 million. To qualify for the HSBC scheme the SME will need a turnover of less than 50 million euros.

SMEs can qualify for a grant if they are going to invest in new capital assets, such as plant and machinery, and create new jobs but cannot get normal bank finance. Grants of up to £500,000 will be awarded alongside the award of a new bank loan on commercial terms.

For further information about business grants please contact Steve Bell, Head of Corporate Finance on T: 0114 251 8850 or email: steve.bell@hartshaw.co.uk.

Hart Shaw Corporate Finance

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2011 – A very tough year

Anyone watching the news recently cannot avoid the general feeling of doom and gloom; the collapse of the Euro, inflation at 5% and minimal economic growth. In the face of these factors business continues to be challenging.

In a recent on-line blog someone asked whether the fact that the economy is not growing is relevant to your business? I would suggest that the answer has to be NO!

A client recently stated that he can’t waste time bemoaning the global economic crisis and the fact that funding is more expensive and restricted as all these factors are outside of his control. Every business faces tough decisions but those that are successful identify and actively manage factors that are in their control. In the past many businesses achieved success without having to try; sales were easy to achieve and profits and cash were generated. In 2008 things changed and since then we see continued pressure on margins and people chasing sales. Business owners have to work harder to seemingly stand still. In the face of these pressures we advise our clients to be as efficient as possible and manage costs. We help our clients identify their aspirations and ensure that each decision becomes a step towards those goals.

The continuing economic turmoil is leading many business owners to consider their next step. As the days of high multiples and inexpensive bank debt are long gone, our experience suggests that Vendors need to be open minded when looking at transaction structures. Many deals are being completed that include higher proportions of deferred consideration and therefore in order to generate value advisers have to look away from the straightforward and deliver innovative deal structures.

Transactions are now likely to include deferred consideration, share options, loan notes, earn outs and deferred purchase. Comparing offers with a mix of consideration takes skill with the focus on long term value at the expense of short term certainty.

Our prediction for 2012 is that the economy will continue to present challenges. Our focus is on supporting all of our clients, ensuring they end the year in a stronger position than when they started. Uncertainty and caution will continue to suppress the transaction market but we expect to see a steady flow of deals, however to secure the deals Vendors have to be open-minded.

Steve Bell, Head of Corporate Finance at Hart Shaw.

T: 0114 251 8850, email: steve.bell@hartshaw.co.uk.

Hart Shaw Corporate Finance

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The Business of Timberline Limited sold to Metalliform Holdings Limited

Following the appointment of Administrators from Hart Shaw, the business of Chesterfield based outdoor play equipment manufacturer, Timberline Ltd has been sold to Metalliform

Timberline Limited sold to Metalliform Holdings Limited

Holdings Ltd.

Timberline, which operates nationwide, also manufactures timber buildings & shelters from two large factories on the Foxwood Industrial Park, and has been trading for over 20 years. The Company suffered a severe down turn in business, as a result of the impact of the public sector spending cuts in the education market. The Company was placed into Administration on 2^nd November 2011 and Christopher Brown & Andrew Maybery, partners at Hart Shaw LLP, in Sheffield were appointed its Joint Administrators.

Metalliform, an experienced school furniture and stadium seating manufacturer based in Barnsley, are ideally positioned to turn the business round whilst also introducing new options into the product range.

Joint Administrator, Christopher Brown of Hart Shaw LLP, said: “Following our appointment we continued to trade the business while we marketed it for sale. We are delighted that the sale of the business is now complete. This is a fantastic outcome for all stakeholders – employees and creditors – of the business and the acquisition by Metalliform has saved 45 jobs.”

The Joint Administrators received support from the Corporate Finance team at Hart Shaw. Steve Bell, Head of Corporate Finance, said “The underlying business of Timberline has strong brand recognition and we attracted a high level of reputable companies looking to secure the business. The nature of the administration was such that we had to react very quickly and were able to prepare the information pack and arrange site visits shortly after appointment with the result that the sale was completed within 6 weeks.”

Metalliform has manufactured furniture for schools, colleges and universities for more than 60-years.  The company employs 90 staff at its Barnsley production site and has a turnover of £8m.    

Peter Brier, Chief Executive of Metalliform Holdings, said: “Timberline is a business that has a good customer base and a skilled workforce. We are very pleased to have concluded this deal quickly as this presented the best chance to preserve jobs. There are good synergies between the two businesses in terms of operating markets and manufacturing capabilities. We plan to use these to the benefit of both businesses.”

In addition to school furniture, Metalliform also manufactures and installs sports stadium seats through its subsidiary company Arena Stadium Seating. 

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