P O RT F OL I O

ISSUE#2

〉 〈THEY’RE OUT THERE. THE ENTREPRENEURS. THE VISIONARIES. THE RISK TAKERS. THE BUSINESS HEROES.

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BGF is the UK’s most active provider of growthcapital for companies with turnover of £5m to £100m.Since 2011 we have invested over £200m in businesses just like yours. Any more questions?0845 266 8860 | www.bgf.co.uk

Sometimes, I ask myself whyI’m building this business?Because I want to be my own boss.Because I’m really, really good at this.Because I want a bright future for my kids.Because I love what I do.Because my town needs jobs.Because if I don’t, nobody else will.Because if I don’t, somebody else will.Because I have big ambitions.Because it’s now or never.Because it’s my responsibility.Because I’ve been given a chance.Because they said I’d never make it.Because I want a yacht.Because I want another yacht.Whatever you’re in it for, BGF canhelp you to build something great.

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P O RT F OL I O─# 2

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1814

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SMALL COMPANY, BIG BRAND

TWO’S COMPANY…

THE PORTFOLIOOUR INVESTMENTS:

OCT 2011 – DEC 2013

SECURING PUBLIC SECTOR

CONTRACTS

PROTECTING YOUR ASSETS

XERCISE4LESS: A DAY IN THE

LIFE

BRITAIN’S MANUFACTURING

RENAISSANCE

CONTRIBUTORS

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WELCOME TO THE SECOND ISSUE OF PORTFOLIO. IT IS BECAUSE OF BRITAIN’S FAST GROWING, SMALLER AND MEDIUM SIZED BUSINESSES THAT BGF EXISTS TODAY. THEY ARE THE ENGINE ROOM OF THE UK ECONOMY. THEY ARE

ALSO THE BIG BRANDS OF TOMORROW. AND THEY ARE THE STORY HERE. THEIR SUCCESS DEPENDS ON HAVING THE MEANS AND CONFIDENCE TO GROW.

BGF’S MANDATE IS TO PROVIDE BOTH AND THE CONTENT OF THIS PUBLICATION ILLUSTRATES WHAT CAN BE ACHIEVED BY DYNAMIC ENTREPRENEURS AND AMBITIOUS

MANAGEMENT TEAMS WHEN THIS IS MADE AVAILABLE.

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S M A L L C O M P A N Y ,

B I G B R A N D

B Y J O N R H O D E S

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Just because a company is relatively small in size, does not mean that it cannot be a true leader in its space. It is what BGF looks for in the companies that it backs; it is celebrated in the following pages of this publication; and, it is what ultimately will enable these companies to become the great brands of tomorrow._Companies such as Trunki, Morphuits, Barburrito, Arran Aromatics, Better Bathrooms and Peyton and Byrne, all illustrate that you don’t have to be a large organisation for your brand to be big. _By pursuing a distinctive vision, developing a highly original product or creating unassailable positioning, small and mid-sized companies can build a dedicated audience of customers that enables them to create formidable brand power and punch way above their weight, even without large marketing resources at their disposal._So how do they do it? _It helps to think of “brand” as more than just the visual representation of a business. Brand represents everything that the company makes, says, does or provides – this is what constitutes brand equity. Its assets include company purpose, values and culture, people, products and services, customer experience, pricing and positioning, technology, IP and even the company’s valuation. Certainly it is so much more than a visual representation, pretty picture or snappy message._A brand is in continual dialogue with its customers and other stakeholders. Whether face-to-face at events or on the shop floor,

online via social media and the company website, or through the customer service department, it is vital to engage in two-way conversation. _That personal connection can make all the difference to the promotion of a brand. AFG Media, the creator of the world famous Morphsuit brand uses Facebook to showcase their product and create a highly engaging and ever-growing forum for their customers to connect with both the brand and a wider community of like-minded followers. Over a million ‘likes’ and an audience of advocates in the tens of thousands, all for little or no cost. _This dialogue can help in the development of new products and services, identifying pain points and barriers to purchase and will often uncover insights that allow for real innovation. _It also helps if the ‘voice’ of a brand is an authentic one. Arran Aromatics, a business with a turnover of less than £10m, headquartered on a remote island in the West of Scotland, has created a brand that is now recognised internationally. It sells its products in over 30 countries and is one of Scotland’s biggest exporters to Saudi Arabia. Its recent investment in a new e-commerce website for consumer and trade customers has given the brand new global outreach. This brand is built around its provenance, with each of its products made and hand-finished on the Isle of Arran, using the finest ingredients including the island’s mineral rich natural water._Great brands are often created by a product or service that defines its category.

In other words, the category and the brand become synonymous. For example, when Trunki went to market with its unique range of travel accessories for children, it carved out a niche that did not previously exist. Many families across the world now buy a “Trunki”, not just a ride-on children’s suitcase._Obviously a great idea will never make it big without good management and skilled handling. It takes more than just a good idea to create success, and there are many good ideas that are poorly executed – particularly when businesses are expanding rapidly. Many of the best brands seek to define and distill their own particular DNA before they expand into new markets, sectors, or products so that they can maintain consistency, coherence and most importantly, the successful formula for creativity and commercial success. _Even if a company’s product or service isn’t groundbreaking in itself, a strong brand will find a means of differentiation or a way to create unfair advantage. _Never underestimate the power of a story, all brands are a narrative; the story is what draws us in. _This second issue of Portfolio celebrates the many great stories, voices and personalities behind companies that have been backed by BGF. It highlights the different types of valuable brand assets that these companies have developed. Yes, many of them are still young with further growth still ahead of them, but we know that among them are great national and international brands of the future.

AFG Media Sector: Consumer goodsBGF Investment: £4.2mNumber of Employees: 14Turnover: £10–15mLocation: EdinburghBGF Region: ScotlandInvestment Date: June 2012

Arran Aromatics Sector: Consumer goodsBGF Investment: £2.8mNumber of Employees: 120Turnover: £5–10mCompany Location: Isle of ArranBGF Region: ScotlandInvestment Date: August 2013

“NEVER UNDERESTIMATE THE POWER OF A STORY. ALL BRANDS ARE A NARRATIVE; THE STORY IS WHAT DRAWS US IN.” 〉 〈

SIGN ON DOTTED LINE:

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S E C U R I N G P U B L I C S E C T O R

C O N T R A C T SB Y D A V I D P R O S S E R

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£Just shy of £720bn. That is what the public sector, in all its guises, will spend during the

2013-14 financial year, with much of it going to private sector businesses that provide one service or another to local and national government. This is far too large an opportunity

for any business to ignore, whatever its size.

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The good news for small and medium-sized enterprises that see public sector contracts as a potentially important plank of their growth strategies is they now have more chance of winning a share of this business. On coming to power in 2010, the Coalition Government set a target of awarding 25% of public sector contracts by value to SMEs within five years._Now, there are some important caveats to that target: it applies only to central government contracts and includes both direct spending and the value subsequently created in the supply chain. Still, the policy was ambitious; at the time, central government spending with SMEs amounted to just 6.5%. Three years later, the percentage is 10.5%, a two-thirds increase._There are two ways to look at those figures. The negative spin is that at the current rate of increase, the Government will fall some way short of its 25% target – 15% by 2015 looks more realistic. On the other hand, businesses with a glass-half-full mentality will reflect that even 15% would mean SMEs’ public sector contracts had more than doubled in just five years._It is worth making the effort to be optimistic. While progress may be slower than hoped, the gains have been achieved through a comprehensive overhaul of public sector procurement, for both local and national government, which should continue to make it easier for growing businesses to pick up new work. And these businesses at least know they are pushing at an open door. _Reforms implemented by the Government Procurement Service (GPS) begin with greater transparency on what work is available. All public sector contract tenders worth more than £10,000 are now advertised on two online services: Contract Finder and Tenders Electronic Daily. Companies registered for these services can access updated lists, tailored by industry or geography, on a daily basis._The next stage, having helped businesses to identify tenders on which they might like to bid, is to make it easier for them to do so. The GPS thinks it has achieved this objective through a switch to leaner procurement

processes, reducing the number of hurdles that contractors must clear in order to qualify to bid, and to place the bid itself. Investment in technology is also helping, with new interfaces such as eSourcing and Dynamic Marketplace designed to smooth the bidding process._The GPS also claims to have improved public sector contracts, moving to greater use of templates and standardised documents. And there is a new procurement process for the smallest contracts by value, which are now taking an average of 15 days from advertisement to award. SMEs have won 71% of these tenders._Are such reforms working? Well, the figures on contract awards to SMEs speak for themselves, but it’s important to note that we’re also talking here about a larger pie to share out. The public sector is looking to the private sector to deliver its austerity agenda.

Graeme Lee, Group Chairman of Springfield Healthcare, describes “a sea change in the attitude of bodies such as the NHS, which have realised they simply can’t carry on as they have been”. Springfield, the largest provider of independent domiciliary care services in Yorkshire and Humberside received an injection of £4.4m of growth

capital from BGF in June 2012, partly because it wanted to target further public sector contracts. The company has recently completed the construction of a purpose-built care village in Leeds it hopes will prove popular with the local authority._ “Local authorities have got less money and they see outsourcing as crucial for marshalling their resources,” Lee says. “In our part of the country, many services are still provided in-house and as local authorities exit, there will be huge opportunities for companies such as us.”_ Springfield’s annual revenues from the public sector already total £9m and Lee hopes the Leeds care village will add £2m to that figure. The company’s relatively small size has actually helped it. “This may be peculiar to our sector, but after the collapse of Southern Cross, local authorities are wary about dealing with the large corporates. They’ll therefore work very closely with us during the tendering process.”_ Lee is also encouraged that the squeeze on budgets has not precipitated a race to the bottom on price. “The commissioning process has certainly become more mature. You must be able to demonstrate value but also demonstrate you will offer quality, particularly in terms of people, training and so on. Local authorities recognise the service will fail if price is the only factor.”_ One way to demonstrate this value is to find ways to prove your worth that may not be entirely commercial. Springfield, for example, has worked with the local authority and other independent care providers to develop standardised leadership programmes for care managers from across the sector._ “We all need to build relationships with these commissioning authorities, and we also need to be locally minded. Delivering a service in Bristol, say, may be very different to delivering the same service in Bradford.”

At Celaton, another BGF portfolio company – it received £2.5m of growth capital in December 2012 – Chief Executive Andrew Anderson has an additional tip for securing work from the public sector._“We still think it is tough for smaller

ON COMING TO POWER IN 2010, THE COALITION

GOVERNMENT SET A TARGET OF

AWARDING 25% OF PUBLIC SECTOR

CONTRACTS BY VALUE TO SMEs

WITHIN FIVE YEARS.

Springfield Healthcare Sector: HealthcareBGF Investment: 4.4mNo of employees: 703Turnover: £5–10mCompany location: YorkshireBGF Region: North, North West & Northern IrelandInvestment Date: June 2012

Celaton Sector: TechnologyBGF Investment: £2.5mNo of employees: 63Turnover: less than £5mCompany location: Milton KeynesBGF Region: Midlands Investment Date: January 2013

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companies to bid for these contracts, so we’ve started working with a larger partner firm that has huge amounts of experience working within the Government’s procurement frameworks. It’s not so much a question of

size, it’s more about having the capability to navigate around accreditation and qualification issues, which is difficult unless you’ve done lots of this sort of work.”_In theory, Celaton’s proprietary document management software, which enables organisations to manage all their inbound information, from customers’ letters to online employee financial data, through a cloud-based service, should be perfect for the public sector, which faces massive volumes of such correspondence._However, Anderson warns that smaller companies do need to battle against the innate conservatism of some public sector officials – the ‘no-one gets sacked for buying IBM mentality’. “In the public sector, if you make a mistake you can end up losing your job, so the trick is often not to make a decision at all, or to go with the safest possible option,” he says. “That can sometimes be a problem for smaller businesses, which may not have the resources to wait out this indecision.”_Still, that’s not to say small businesses should give up, Anderson adds. “SMEs

will reach critical mass with public sector contracts, but I like working with a partner because their knowledge of how to deal with public sector procurement leaves me free to concentrate on what I do best.”

One man who understands that view is Matt Waller, Chief Executive of Benefex, an online provider of employee benefit systems in which BGF invested £4.2m in October 2011. Waller now has a number of contracts with central government, but he says the key to securing public sector work for the first time was to approach the process just like a move into a new market._“There is no magic formula to getting work,” says Waller. “Anything you’ve used elsewhere to break into a new market or territory may work here. We definitely found the first contract, in our case from the Department of Transport, was the hardest one to win, but that led to further contract wins, so the hard work did bear fruit.”_In fact, says Waller, there are attractive features about the UK’s public procurement processes. “The public sector is a big beast but it does have a very consistent approach to procurement. It’s the same process, more or less, across the whole of the public sector, so once you understand that process, each new tender is not so difficult.”

Not that there won’t be false starts. Take Shuropody, the UK’s leading specialist footcare provider, in which BGF invested £3m of growth capital in September 2012. It has more than 150 outlets around the country and serves 5,500 customers every week, making it the biggest provider of podiatry in the country outside of the NHS._As such, Shuropody was excited when the Government announced in 2011 that the NHS would outsource much of its community service provision. In early 2012, as soon as it was able to do so, Shuropody applied for accreditation with the 20 or so primary care trusts that had indicated podiatry would be one of the outsourced services._However, it became clear that the initial contracts would run only until April 2013, when primary care trusts were abolished

under the Government’s NHS reforms. There was no guarantee the authorities’ successors, the clinical commissioning groups, would extend the arrangements._Winning these contract required bidders to subscribe to the NHS’s appointment booking service through one of a small number of partners. With technology costs to consider on top, Shuropody felt it could not justify bidding for such short-term contracts. “Although we had already done a great deal of work, we decided to opt out of the process before we ended up with contracts that were commercially unviable,” explains Managing Director Frank Duffy._However, Shuropody’s story is not wholly negative – and one lesson for other growing businesses may be to focus on the positive outcomes of such episodes when they do miss. For one thing, says Duffy, the work it did was very necessary. “We did accelerate certain disciplines, particularly around company-wide standardisation, that have arguably made us a much slicker outfit in a shorter space of time than would otherwise have been the case,” he explains._Nor has Shuropody been put off bidding for further public sector contracts. “We’re definitely still interested in the long-term potential of this work,” Duffy adds. “We offer a service that is ideal for outsourcing from the NHS – we can do it better, particularly in terms of seven-day access to care in more convenient locations and shorter waiting times, for less money.”_Duffy’s attitude is a reminder that SMEs will continue to need the glass half-full mentality as the public sector procurement process evolves and commissioners learn what works and what doesn’t. There is little doubt now that the Government’s original 25% target for SME contract spend was unrealistic, but every incremental step towards it represents new business worth millions of pounds for small businesses. Such opportunities are worth battling for; no gain without pain, you might say.

THERE IS LITTLE DOUBT NOW THAT THE

GOVERNMENT’S ORIGINAL 25% TARGET FOR SME CONTRACT SPEND WAS

UNREALISTIC, BUT EVERY INCREMENTAL STEP

TOWARDS IT REPRESENTS NEW BUSINESS WORTH MILLIONS OF POUNDS

FOR SMALL BUSINESSES.

Benefex Sector: SoftwareBGF Investment: £5.8mNumber of Employees: 103Turnover: £5–10mCompany location: SouthamptonBGF Region: South WestInvestment Date: October 2011

Shuropody Sector: RetailBGF Investment: £3mNumber of Employees: 450Turnover: £15–20mCompany location: CoventryBGF Region: MidlandsInvestment Date: September 2012

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T W O ’ S C O M P A N Y…P A U L S M I T H & R I C H A R D K I L N E R

I N C O N V E R S A T I O N W I T H E M I L Y W E S T O N

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Paul Smith, the founder of SHS Integrated Services, welcomed Chairman Richard Kilner to the company in September 2012 when BGF invested £5.4m in the South Wales-based

industrial scaffolding group.

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I’m extremely proud of what SHS has achieved to date. SHS principally work in the utility sectors with technically demanding scaffolding structures for clients in the petrochemical, oil and

power generation sectors. It offers a multi-disciplined service in a highly regulated sector and we deliver it with a quality of client service that well exceeds the industry norm. We can count a number of blue chip companies in our client base including Dow Corning, MURCO, ALSTOM, Laing O’Rourke, Balfour Beatty, Shaws and Interserve to name but a few. We have grown at around 40–50% over the past few years and we currently employ around 180 people from six sites across the UK. Achieving such growth in a competitive sector cannot be underestimated; it really is a challenging environment for a small private company given the competition that we face from the large national companies._After leaving school, I went to work on a building site with my father and, strange but true, it was there that I developed a passion for scaffolding. I went on to gain valuable experience with a number of large national scaffolding companies but gradually realised that these companies couldn’t offer me the progression that I ultimately wanted. So 15 years ago, I started SHS._It’s not all glory owning your own company – there are ups and downs, and blood, sweat and tears. It’s important to stay agile – each year brings different opportunities and you need to ensure that as a businesses you are responsive enough to capitalise on them._ One of the challenges in the construction sector is to find the right kind of work to achieve organic growth. Price is all-important but we want customers to appreciate what we do to make the job a success. Quality and safety are key, and an intrinsic part of the service that we offer. You need to fill the order books with profitable work, while also recognising that the largest framework maintenance agreements, which can help you do that, may only go out to tender every two or three years._One of the important turning points for SHS was securing a major power station contract in West Wales, Europe’s largest new build Power Station at the time. This was a significant contract win for SHS as it demonstrated our ability to successfully deliver on a prestigious project but more importantly gave us the opportunity to expand our service offering to include insulation services._Growth brought with it constraints on working capital. Typical debtor days in this sector vary from 60–90 days and with payroll burdens in excess of £1m a month (at its highest), the business was faced with certain challenges that it had not encountered before._We talked to several organisations about financing, but BGF

impressed us most. We felt their overall offer (outside of the initial cash injection) would best suit the management team in achieving its business plan whilst providing a strategic voice on the Board. It has also been very helpful to have their presence on the Board; contributing the right blend of experience and talent to a business is another challenge that rapid growth brings with it. _BGF made the introduction to Richard Kilner, who is now our non-executive chairman. His background in industry and finance, international experience, and a history of working with other Welsh companies was impressive, but we only appointed him after we’d interviewed him. He was focused and intelligent – we felt that he brought additional and complimentary skills to our own team. _Just turning up to the board meetings isn’t enough and certainly it wouldn’t enable an incoming chairman to form a thorough view of the company. An active committed chairman contributes something altogether different. _I certainly see Richard’s value as an asset to SHS. It is hugely useful when he can make connections outside of the business, for instance, getting us in on contract discussions. As an example, Richard chairs an NHS Trust. This is exactly the sort of organisation that we want to be talking to._It also helps that Richard is so direct. He’s an important presence on our board because he will ask the straight questions that need to be answered. Sometimes you need someone there who can stand back from the operational issues that we face as a business each day, in order to provide perspective._To be a successful business, you need to bring together a group of good people who are all trying to achieve the same thing. It is something that I have grown to appreciate during my career. Bringing in Gavin Payne as finance director and Roger Wint as commercial director (both joined SHS in 2011) has made a real impact, and now Richard is on board too._In the long term, we would like to increase our framework agreements and secure future work in the power and construction sectors. We have significantly invested in the recruitment and training of individuals to support this. We recently acquired Dixon Pentland Limited boosting our capability in the critical services sector and are also looking to make further acquisitions. _Together, we can see SHS’ potential. We’re turning over about £18m a year currently, and we would like to get that to £30m within two years. But the key is that we remain a profitable business. We know we have the capability and team of professional people to offer the industry the highest standard of safety, quality and commitment.

〉 〈I CERTAINLY SEE RICHARD’S VALUE AS A NETWORKER. IT IS HUGELY USEFUL

THAT HE IS ACTIVELY TALKING TO PEOPLE OUTSIDE THE BUSINESS, GETTING US IN ON CONTRACT DISCUSSIONS.

SHS Integrated Services Sector: Industrial servicesBGF Investment: £5.4mNumber of Employees: 180 Turnover: £15–£20mCompany location: Barry, WalesBGF Region: South WestInvestment Date: September 2012

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My background is in construction. I spent almost 20 years working in the industry, and then another 14 years working at 3i Group, the venture capital business, where

I was a Partner in the Infrastructure and Growth Capital teams. So really, I’ve been around businesses such as SHS for most of my working life._These days, I combine a number of different roles, including some consulting, and some work with the NHS. Now there is my Non-Executive Chairmanship with SHS. I first got to know many of the people at SHS whilst BGF was doing its due diligence work on the company before investing. They asked me to help with that process, possibly with a view to becoming a non-executive at the company. But when we got near to closing the deal and the suggestion was made that I might become Chairman of the business, I definitely felt the SHS guys were interviewing me, as much as I was evaluating them._That is as it should be, because the relationship between chairman and chief executive depends to a large extent on chemistry: it is really important to spend time together, to find out whether you’re going to be able to make it work._You also need complementary skill-sets. It would have been pointless for SHS to hire someone with huge expertise in the scaffolding sector, because the company already has that resource. I bring something different to the company; above all, my many years of working with businesses to give them the best chance of growing. There is a huge amount of process work involved in that, and this is an area where entrepreneurs are likely to lack experience. In the investment world, there is a saying, ‘You buy a business that is difficult to understand and build a business that is easy to sell’, and it is a good way to look at this. Companies need better structure and governance as they grow in size, so at SHS we’ve worked really hard on improving the quality of Board meetings and processes._One way to achieve growth, of course, is through acquisitions and we’ve already done one deal since I arrived at SHS. I think my help was important because no-one at SHS had ever done an acquisition before, whereas I’ve spent a large part of my career working on deals of one kind or another._In the end though, I don’t have a specific brief at the company. My role is to be here for Paul and his team when they need me. We don’t feel the need to have calls scheduled between us, for example, because either one of us just picks up the phone when we feel it’s necessary. Similarly, while the typical non-executive chairman would

probably spend two-and-a-half days or so a month on this sort of role, I think it’s important to recognise that sometimes much more of my time will be required. I certainly spent more time than that at SHS during the acquisition process, for example._The challenge now is to really grow the business aggressively, without losing what has made it special as a smaller company. For example, I’ve spent a lot of time talking with customers since becoming Chairman – I think that’s another important part of the job, and one thing they really like, is that every single project has a company director involved in it. Customers describe SHS as a very non-adversarial business, and the question is how you go about scaling that ethic._I’m also keen to bring some of my experience from my work in the public sector, where I chair an NHS Trust. One of the things you notice in the public sector is a real focus on managing risk, and that’s something that is less common in the private sector, particularly among smaller companies. It’s definitely an issue I want to bring into the discussions we have at board level; this question of how you manage risk in a really strategic way._Overall, my early impressions of Paul haven’t changed. It was immediately clear to me that he was a very “backable” Chief Executive. He has tremendous entrepreneurial drive and a real focus on customer service; and this is now a team approach. Paul has been wise to surround himself with really good people over the past couple of years, who are now adding tremendous value to the company. I really hope I can play my part too._In fact, I feel fortunate that I arrived at SHS when I did, because Paul and his team had done a great job in what, looking back, was a really difficult market environment. The outlook for the next couple of years is certainly much more positive than the circumstances in which SHS had been working for the two years or so before BGF’s investment.

〉 〈YOU NEED COMPLEMENTARY SKILL-SETS. IT WOULD HAVE BEEN POINTLESS FOR

SHS TO HIRE SOMEONE WITH HUGE EXPERTISE IN THE SCAFFOLDING SECTOR, BECAUSE THE COMPANY ALREADY HAS THAT RESOURCE.

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One thing British manufacturers have not lacked in recent years is unsolicited advice. Sales may have been hard to find and finance harder still, but there has been no shortage of helpful criticism. Report after report has bemoaned the alleged underperformance of UK manufacturing and identified a multiplicity of failings. Companies were too short-termist and lacking in ambition, said the critics. They did not invest enough, particularly in technology. They were too timid about attacking growth markets in emerging economies._Whatever the truth of these claims, one thing is clear. They do not apply to some of the smaller companies that are now leading Britain’s manufacturing renaissance._Take VTL Group, the Huddersfield-based motor components manufacturer where BGF has just agreed a £4m investment. Bruno Jouan, VTL’s Chief Executive, believes the critics have a point when it comes to the sector’s commitment to long-term investment in technology. “In the past, if you generalise, most businesses in the UK, and certainly in the automotive sector, have been really short-sighted in terms of investment in innovation and technology.” And he concedes that VTL probably was too. But over the past couple of years the company has been investing heavily in the technology behind its precision engineered transmission and turbo components which it supplies to leading manufacturers including Cummins, Toyota, Renault and Nissan. It has ploughed £2m into a new technology centre to be the base for all its research and development and for the training of its new generation of engineers. “This shows our commitment to be a world-class manufacturer and a strong partner for our customers in the future.”_Among the common criticisms of British

manufacturers is that they should be thinking more in terms of solutions and increasingly looking for ways to offer broader packages of products and services._That is exactly what VTL has been doing. “If you just ‘make to print’ it is only for today and tomorrow. You have to move up the value chain. You have to offer your customers technical solutions where they can rely on you rather than other people. You must become, if not indispensable, then less disposable.”_Paddy Collins, Chief Executive of Aubin, an Aberdeen-based supplier of chemicals for the oil industry, also stresses the importance of focusing on the customers’ needs rather than the products. “Although we sell chemicals, what we really do is sell expertise and knowledge to people who don’t have that.”_Aubin has spent five years developing a low density fluid that can be used to provide buoyancy for subsea oil equipment allowing them to be moved around the seabed more easily. While he is convinced he has a world beater on his hands, Collins concluded that having the chemical was not enough. Aubin also had to produce the engineering solutions wrapped around the chemical. That requires a big investment, not least in new people, which is why Collins decided the company needed some external capital._“We needed money in the bank to have some confidence that we could go forward, rather than doing it on a shoestring and a hope. We wanted to hire new people and in Aberdeen there is a real shortage of good quality personnel. To persuade people to leave a good safe job we needed to give them the confidence that they were going to have the resources to do what we wanted to do.”_Aubin opted to go with BGF, which invested £2.25m in February 2013, partly because it was prepared to take a much longer-term

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B R I T A I N ’ S M A N U F A C T U R I N G

R E N A I S S A N C EB Y D A V I D W I G H T O N

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〉11 〈

view than most investors. “Some of the things we are doing will take time to come to fruition and BGF wasn’t looking to get its money out in four years’ time.”_Collins certainly can’t be accused of lacking ambition. Sales jumped by a third to £6.25m in 2013 and are expected to grow at a similar pace this year. “We think we could go faster than that. We have a unique material and the subsea industry is worth tens of billions of pounds annually.”_Mark Bryant, Head of Manufacturing at BGF, regrets that such ambition is not more common in British manufacturing. “So many of the manufacturers I have met have been severely bruised surviving the last five years or the last twenty years and their ambition is very limited. They are happy to tick along.” Manufacturing tends to be more cyclical than services businesses and many entrepreneurs are worried about becoming overextended if they are dependent on banks for finance, he says._Another weakness critics often point to is that British manufacturers, and indeed UK companies in general, have not made the most of growth in emerging markets._That is certainly not true of Aubin, which exports 80% of its sales and is very strong in the Middle East. Nor can the accusation be levelled against Rob Law, founder of kids luggage maker Trunki, whose now very successful business idea was famously rubbished by Theo Paphitis on Dragons’ Den in 2006._“We looked at overseas markets from the outset, and South East Asia is now one of our biggest markets.”_Ironically, Trunki has done less well in markets closer to home such as France and Germany, where it has relied on distributors. Some of the £3.92m Trunki raised from BGF

will be used to support the move to sell directly into France and Germany._In the face of rising costs in China, Trunki recently joined the growing trend for British companies to repatriate some manufacturing to the UK. Law explains that having local manufacturing reduces shipping costs and the company’s carbon footprint, as well as cutting the amount of capital tied up in stock and making it easier to respond quickly to market changes._He was also keen to grasp the PR opportunity of being able to claim that the Union Jack-adorned Team GB Trunki case it produced for the Olympics was made in Britain. Law signed up a supplier in Devon but the company then got into financial difficulty and Law decided to buy it out at the end of last year. The focus now is on turning the operation into a “world-class manufacturer”, he says._While companies in many different sectors are reshoring some manufacturing to Britain that is not really an option for Bullitt, which designs and makes rugged mobile phones. David Floyd, the company’s co-Chief Executive, says that much as he would like to see his products made in the UK there is no realistic alternative to China and Taiwan, which dominate the manufacturing of phones. Rising costs are an issue but Bullitt has recently been able to get much better terms from its suppliers thanks to the strengthening of its balance sheet provided by BGF’s £3.5m investment in December 2012. This enabled it to move to normal 30-day terms with its suppliers rather than paying a 30% cash deposit when placing an order and settling the rest on shipment._Although its balance sheet was stretched, Bullitt has been cash-positive almost since it was formed four years ago. Set up by Floyd and two colleagues who had worked together

VTL Sector: ManufacturingBGF Investment: £4mNumber of Employees: 400Turnover: £50–75mCompany Location: HuddersfieldBGF Region: North, North West & Northern IrelandInvestment Date: September 2013

〉12 〈

at Freeplay Energy, the Aim-listed wind-up radio group, Bullitt has had little need for external finance until recently. Floyd turned to BGF having become very frustrated with banks. The company was generating cash, arguably had a relatively low-risk business model and a management team with a solid track record, but Floyd said that the banks were just too risk averse. “We dealt with a couple but to be honest they couldn’t give us what we wanted.”_One of the frequent criticisms of British manufacturers is that many do not pay enough attention to design despite the wealth of design talent in the UK. That cannot be said of Trunki or Bullitt, for which design is at the heart of their business. Bullitt’s biggest sellers are a range of rugged mobile phones

it designed for Caterpillar (CAT), the American construction equipment giant which has licensed its brand for other products such as boots, clothing and watches._In the competition for the mobile phone licence, Bullitt saw off challenges from some of the industry giants, including Samsung. Floyd says Bullitt’s key attraction for CAT was that it was proposing to come up with entirely new designs that reflected the CAT brand rather than merely slapping the name on an existing product. Bullitt’s designers worked with the designers of CAT’s vehicles at its headquarters near Chicago and Floyd says the result was a phone that has all the attributes of the CAT brand. The handsets use a lot of steel and have mouldings that echo those on CAT’s vehicles.

Trunki Sector: Consumer goodsBGF Investment: £3.92mNumber of Employees: 74Turnover: £5–10mCompany location: BristolBGF Region: South WestInvestment Date: April 2013

〉13 〈

_Bullitt is generating heady growth with sales rising tenfold to £10m in 2012 and nearer £30m expected in 2013. In addition to the phones it makes under the CAT and JCB names, Bullitt will next year launch a range of audio products for a well-known high street name and it is working with another household brand._Floyd hoped to have some of the products for the high street retailer made in the UK but found he could not get prices close to those on offer in Asia. This is a reminder that international competition remains intense. But there is no doubt that the prospects for British manufacturers – and for manufacturing in Britain – are brighter than for some time._Nowhere are the hopes higher than in a sector where Britain was almost written off just a few years ago – automotive. The turnaround since the financial crisis has been remarkable and VTL’s Bruno Jouan sees no reason why it should not continue. The big car makers are keen to rebuild the supply chain in Britain and are getting strong support from the government._Big challenges remain, not least in terms of skills shortages. “There haven’t been enough people going into engineering over the last 20 years,” says Jouan. But the way manufacturing has been put back on the agenda in the last three years has been very helpful in terms of attracting young people into the industry. “Now we are seeing young kids who have better results choosing to go into engineering because it is being promoted and there are so many good stories about people being successful.”_Jouan says the UK is a great place to do business and believes that British manufacturers can confound the critics and take on the best in the world, including the Germans. And that is a Frenchman talking.

Aubin Sector: Oil and Gas ManufacturingBGF Investment: £2.25mNumber of Employees: 20Turnover: <£5m Company Location: AberdeenBGF Region: ScotlandInvestment Date: February 2012

Bullitt Sector: TechnologyBGF Investment: £3.5mNumber of Employees: 24Turnover: £10–15mCompany location: ReadingBGF Region: South WestInvestment Date: December 2012

─A B L U E P R I N T

F O R T H E M O D E R N B R I T I S H M A N U F A C T U R E R :

─ 1

Continue to innovate and do not be afraid to take a long-term view of investment in

technology.

2Do not just respond to customers’ needs: pre-empt them. The best

manufacturers move up the value chain, selling experience, know-how and first

class design as well as products to their customers.

3Look beyond your home turf for real growth opportunities – low levels of domestic growth may not give your

business the head start it needs. Real opportunity comes from moving into new markets – not just in the EU – but also into fast-growing economies across the rest of

the world.

4Attract and maintain talent – the

recruitment of skilled employees remains a continual challenge to the sector and it falls to businesses to mentor the next

generation.

5Make no apology for ambition.

Conservatism may not be the way to build business success. Now is the time for

businesses to invest in their future.

〉14 〈

─

X E R C I S E 4 L E S S : A D A Y I N T H E L I F EB Y J A M I E D U N K L E Y

─

〉15 〈

The credit crunch may have hit our pockets but it hasn’t stopped us all getting fatter according to medical experts.

Not only are we not eating enough fruit and veg, we’re not exercising enough and the problem is forecast to get

even worse. Jon Wright, a former rugby player turned entrepreneur, is a man on a mission to buck this trend.

Jon Wright’s chain of budget gyms is already expanding all across the UK and with a ground-breaking tie-up with Tesco already in the bag; this BGF-backed business could well be part of the solution to Britain’s bulging waistlines. _Ahead of what is likely to be an exciting few months for the business, the 42-year-old admits it took a while before he and his team stumbled on the formula that has struck a chord with its 80,000 members. _“Xercise4Less was actually born out of another business I was involved in, Xscape, which was a large gym outside Leeds. This had frankly not been hugely successful and after three years we decided to switch to a budget model. It proved to be a turning point and within six months we’d gone from just breaking even to making a profit.”_“What we did was apply the Ryanair or easyJet approach to the business and strip out the non-essential costs such as saunas, swimming pools and having gym instructors on the floor. We also started to realise that our members used our facilities for lots of different reasons and we wanted to offer them flexibility by taking away as many barriers as possible to help them bring exercise into their everyday lives.”_Xercise4Less’ gyms are usually based at large out-of-town sites that offer a floor size of about 30,000 square feet. The company believes that this gives its customers better service with more space, a wider range of equipment and better parking facilities than

they would get in traditional city centre gyms. _Despite only launching in 2009, it wasn’t long before Xercise4Less started attracting attention and last year Britain’s largest retailer came knocking, resulting in a formal tie-up this summer after 12 months of talks. _Wright explains that this is a model successfully adopted by France’s Carrefour, whose large out-of-town superstores are about much more than food. He wants to give customers the chance not only to shop, but to eat, drink, and if they fancy, go to the gym. _Wright says the agreement to start opening Xercise4Less gyms inside Tesco stores is a win-win situation for both parties. _“There are great synergies to be had between Tesco and businesses like ours. They want to offer shoppers more options while they do their weekly shop and we want to make it easier for customers to access our services. It may be early days but our first gym in partnership with Tesco opened in Stockton-On-Tess last month and we have more in the pipeline, including Leicester.”_Equipment at the Stockton club will be ‘zoned’ for different activities such as cardio, weights, a combat zone, a ladies-only gym with a wide selection of female friendly weights, and a dedicated personal training zone. An indoor cycling studio will incorporate the virtual cycling system MyRide that allows participants to experience cycling tracks from around the world and members will have 40 free classes to choose from each

〉 〈ITS £5 MILLION INVESTMENT IN AUGUST WILL BACK

UP THE COMPANY’S AMBITIOUS 5-YEAR PLAN TO ROLL OUT 100 GYMS ACROSS THE UK.

〉16 〈

week. All this offered at £9.99 for monthly membership._Although the company’s heartland is in the north of England, sites across the country are now in Xercise4Less’ sights. _Expansion like this needs funding and Wright realised that his business was going to need new investment to back up the potential demand for its services. BGF’s £5m investment in August is supporting the company’s ambitious 5-year plan to roll out gyms across the UK, which it hopes will create new jobs at a time when millions are unemployed across the country. _Xercise4Less currently has agreements signed on 14 new sites, which will see the brand increase its presence in Yorkshire, the North East and other areas such as the South West. _“If you’d asked me 12 months ago whether I’d be interested in an equity investor, I probably would have said that I’m not interested at all,” Wright adds. _“Our original plan was to grow to 40 clubs by 2016 but then the Tesco deal came along. At the same time, we found that we were being offered more and more quality property deals for potential sites. We clearly needed more capital.”_Capital now in place, Wright is focused on growing the business. This normally means an early start for the father of two young children, who wakes up at six every morning at his home in Leeds where he catches up on admin and emails. Then it’s breakfast with the kids before a short drive into the office._“It’s hard to describe a typical day, but like any business person, it almost certainly involves meetings – and increasingly this

involves travel around the UK” Wright says. _“If I’m in the office then I’ll look to spend quality time with our finance director and HR team. We’re currently in the process of upgrading our website so at the moment I am working closely with our digital experts. They’re looking at new ways we can use social media platforms to promote the business because it’s increasingly important to interact with our customers in lots of different ways.”_He adds: “Our expansion across the country also means that I’ve also been spending time travelling up and down the country looking at new places to launch clubs, especially Tesco sites.”_“I also like to work out about five times a week and am lucky to have our resources at my disposal. Running a chain of gyms, there’s no excuse not to keep fit!”_Wright recognises that for any entrepreneur, research is pivotal to success. “One of the most interesting parts of my job includes trips to budget gyms across Europe and in the US. We’re always keen to see how they work overseas because it helps us improve the services that we offer to our own customers.” _Looking ahead, the sheer task of growing 10 fold in 3 years is going to be tough and there is no room for complacency. Wright is the first to recognise this._“The UK gym market is currently valued at around £4bn and we’re seeing the more nimble low-cost gyms increasingly take market share from mid-market operators. _“Our plans are now UK wide and we plan to open gyms in places including Southampton, Bristol, Cardiff and Swansea – not far off 100 outlets by 2016.”

〉 〈THE UK GYM MARKET IS CURRENTLY VALUED AT

AROUND £4BN AND WE’RE SEEING THE MORE NIMBLE LOW-COST GYMS INCREASINGLY TAKE MARKET

SHARE FROM MID-MARKET OPERATORS.

Xercise4LessSector: Leisure & HospitalityBGF Investment: £5mNumber of Employees: 250Turnover: £5–10mCompany Location: LeedsBGF Region: North, North West & Northern IrelandInvestment Date: August 2013

〉17 〈

─

P R O T E C T I N G Y O U R

A S S E T SB Y D A V I D P R O S S E R

─

〉18 〈

〉19 〈

Graeme Malcolm, the chief executive of Glasgow-based M Squared Lasers, puts it best. “In an innovation-based business, intellectual property is at the heart of your value creation”. His business is certainly based on innovation. In April 2012, BGF invested £3.85m of growth capital in the company, in part to fund a research and development program that consistently produces advances in the lasers and photonic optical instruments that it manufactures._Unfortunately, innovation can be copied by counterfeiters who may lack the imagination to generate their own ideas but certainly have the skills to rip off other people’s work. Attacks on intellectual property (IP) represent a serious threat to many growing companies, undermining their ability to generate viable returns on investment. For small companies just beginning to grow, these attacks may threaten the business model altogether._Government figures suggest too few small companies are doing enough to protect their IP, or even to get to grips with the value it represents. Just 6 per cent of small and medium-sized enterprises (SMEs) take out patent protection for their innovations, the Intellectual Property Office says, while 96 per cent do not factor the value of IP into their business strategy or balance sheets._Part of the problem may be that small businesses (and large ones too) do not understand that IP is a broad term. Essentially it is anything that the business creates from an original idea. That includes the obvious things such as how your product functions, but also ideas that you might not immediately see as IP – your company’s logo, for example, or the wording on your marketing literature._Different types of IP require different types of protection. A trademark, say, will protect the unique name of your company and enable you to distinguish your products and services from those of your rivals. Trademarks are important for companies attempting to establish brand value, and

you can register a range of materials, from the company name to its logo, or even its advertising slogan._A patent, meanwhile, will protect a product that your business has developed, both the processes that make it work and how it is made. The patent prevents others from copying, manufacturing or selling something based on your idea. It is also worth noting that the “Patent Box” tax rules introduced earlier in 2013 enable companies to claim a reduced tax rate on revenues generated by patented innovations._It is also possible to guard against counterfeiters who want to copy the look of your product, by registering the design – including features such as shape, colour, texture and the materials used._Copyright, an automatic right that covers creative work, may also be a useful way to safeguard IP. You can use it to protect a wide range of written content generated by your business – everything from product literature, to advertising, to what’s on your company website._In practice, companies that are serious about safeguarding the value of their IP use all of these protections, as well as a range of other tactics. _“We work very hard to protect our IP,” says Graeme Malcolm. “We work with patent lawyers and even have someone seconded to us one day a week to work on our patent portfolio and look at our innovation process.”_In addition, M Squared has other strategies for defeating would-be imitators. “We work to build trade secrets into our products - innovations that would be very difficult for counterfeiters to reverse engineer such as a piece of software where we do not make the key coding available,” Malcolm adds._“We also license our innovations, often to much larger companies with IP that is adjacent to ours, or to governments. We think infringers are more likely to think twice about ripping off, say, a US Government patent than one held by a small Scottish business.”

_Clearly, this is a battle being fought on many fronts. Barrie Hadfield, the chief technology office of Workshare, says his company is fighting an almost continuous battle to protect its IP._Workshare’s technologies enable businesses and other customers to securely share documents and store large amounts of sensitive information on a cloud-based platform. The business, which in September 2012 received £20m of backing in a joint investment from BGF and Scottish Equity Partners, takes its competitive advantage from its IP. Safeguarding this is crucial._All the more so since the company does so much business in the US, where IP laws, especially governing patents, are different. “The law in the US can really favour large companies that have armies of lawyers engaged full-time on nothing but IP,” Hadfield warns. “Small, growing businesses can get muscled out.”_“My advice to smaller businesses would be that it is crucial to choose your IP lawyer very carefully. You need someone with whom you can really build a personal relationship. I speak to our IP lawyer at least once a fortnight and I don’t have time for technical legal arguments; I want straightforward information and advice.”_It is also important to keep an eye on changing legislation. Hadfield points to the shake-up of the patents system that came into effect in the US last year as an example. One problem is that the process of applying for a patent has been simplified. That may sound like a positive development, but it has enabled large companies to automate the process of applying and as a consequence many are churning out patent applications in such quantities and at such pace that smaller businesses aren’t getting a chance._The only defence is constant vigilance in every market where your IP is at stake and for every part of your business. “We do some really specific, innovative new things at Workshare and it’s always exciting and fulfilling to apply for patents for them. But most of

〉 〈ATTACKS ON IP REPRESENT A SERIOUS THREAT TO MANY GROWING COMPANIES, UNDERMINING THEIR ABILITY TO GENERATE VIABLE RETURNS ON INVESTMENT.

〉20 〈

our patents are more mundane – they’re for ideas or processes that might seem really obvious from the outside but which will be patented by someone else if we don’t do it, potentially to our huge detriment.”_Having sought to head off threats to its IP, Workshare also accepts that there are times when it will have to take an aggressive stance – because not everyone is prepared to play by the rules. “I’ve been at Workshare since the beginning in 1999 and I think every time I’ve had to consult lawyers, or go to the courts, it has been because of an IP issue. We have sometimes felt it necessary to take legal action against people that we believe have infringed our patents.” _Not least, this is important to investors in the company, he points out. During the negotiations over funding with BGF and Scottish Equity Partners, IP protection was certainly an important topic of conversation. Potential financiers will be concerned about investing money into a business that is vulnerable in this area. _Legal action can be one way for a company to send out a message to stakeholders and rivals alike that it takes the protection of its IP very seriously and will do whatever it takes to counter any threats. “The majority of the work we do on IP is about preventing other people exploiting our ideas in the first place,” Hadfield says. “But where that defensive work hasn’t been enough, there may be no choice but to go on the offensive.”_PR can be a powerful weapon, agrees Rob Law, the founder of Trunki, the children’s luggage company. “We believe that by building up a reputation for taking IP seriously, word gets round and hopefully that puts off imitators.”_BGF invested £3.92m in Trunki in April 2013, partly to help it develop new products. But Law says he has had to make the battle against the counterfeiters a priority to protect his existing innovations._“There are 3,000 listings of products that infringe our designs on Alibaba [the Chinese equivalent of eBay] at any one time. We

sell in 96 countries and have relationships with retailers, distributors and customers in each one. We rely on them to report potential infringements to us so that we can instruct solicitors. They then instruct local solicitors, who begin with cease and desist letters.”_Like Workshare, Trunki isn’t afraid to take further action where those warning shots don’t hit home. In August, the company won a crucial victory in the High Court against PMS International, a Hong Kong based company that had sought to sell the “Kiddee Case” into Europe. Noting the similarities between this product and Trunki’s ride-along suitcases, the Judge ruled that PMS had infringed.

_Having blocked sales of the rival product in Europe, Trunki must now decide whether to sue for damages. In the meantime, it is making sure people know about the case. “Maximising the PR on that victory was very important and we even managed to get coverage in the South China Morning Post,” Law says.__His advice to other small businesses is to consider potential IP protection strategies carefully. The right option depends on the product, he argues. “For example, I never filed for a patent for our ride-on suitcase because I thought it would offer very limited protection and that people would simply find a way round it,” Law says. “Instead,

〉 〈WE BELIEVE THAT BY BUILDING UP A REPUTATION FOR TAKING IP SERIOUSLY, WE SEND A CLEAR MESSAGE AND HOPEFULLY THAT PUTS OFF WOULD-BE IMITATORS.

Workshare Sector: TechnologyBGF Investment: £7.25mNumber of Employees: 98Turnover: £10–15mCompany location: LondonBGF Region: LondonInvestment Date: September 2012

Trunki Sector: Consumer goodsBGF Investment: £3.92mNumber of Employees: 74Turnover: £5–10mCompany location: BristolBGF Region: South WestInvestment Date: April 2013

〉21 〈

we registered the design in Europe, which prevents people imitating the appearance, rather than focusing on the function.”_Barrie Hadfield’s tip, meanwhile, is not to compromise on the quality of the external advice. Small businesses that are dependent on their IP can’t afford to have their future jeopardised because the issue has been neglected, he says. “That’s why we have constant representation in place on IP. I know how important this is but if I was doing it on my own, I would just be swamped.”At M Squared, Graeme Malcolm also argues that it is important to deploy limited resources carefully. _“We have to be selective about which

jurisdictions we focus our efforts on policing, so we concentrate on markets where we think copycats have the right skills to be capable of stealing our ideas. However, as a small business, we do have one advantage – we’re nimble enough to be so fast with our innovations that by the time the imitators have copied us, we’ve already moved on to the next thing.”_For small businesses that may need help with IP protection, there is support available. The Intellectual Property Office offers a range of online advice, for example, and also runs regular IP workshops and training sessions that are aimed at small businesses.

〉 〈IN AN INNOVATION-BASED BUSINESS, INTELLECTUAL PROPERTY IS AT THE HEART OF YOUR VALUE CREATION. ─

E S S E N T I A L I P T I P S F O R S M E S ─

1Catalogue your IP assets

Make sure you have adequate processes and policies in place in order to capture

intellectual property rights before you start to create them.

2Understand your IP rights

If the time comes to sell your business or license your technology to a third party, it’s imperative that you have a clear and

unambiguous record of who owns the title to those rights.

3Understand the value of your IP

Can it easily be copied with ‘me-too’ products? How robust is it against

infringement? Before investing heavily in the development of a new product, it’s

important to assess the strength and scope of the intellectual property asset portfolio

that will protect it.

4Monitor possible infringement

To maintain the value of your intellectual property and ensure you obtain all the

benefits of it, you need to have a process in place to monitor the market for any

infringing activity or potentially infringing activity as soon as it emerges.

5Check your own path is clear

It’s vital before you invest in a product that you check whether you have ‘freedom to operate’ in respect of it – that there are no third party intellectual property rights that would prevent you from conducting your

business in respect of that product.

6Educate yourself

The Intellectual Property Office’s ‘IP for Business’ tools and guidance can help you identify and protect your IP assets to turn

your ideas into business success. Access a range of support at

www.ipo.gov.uk/business.

M Squared Lasers Sector: Design & manufacturingBGF Investment: £3.85mNumber of Employees: 34Turnover: <£5mCompany location: GlasgowBGF Region: ScotlandInvestment Date: April 2012

〉22 〈

Boost Juice BarsNational chain of juice barsSector: Leisure & HospitalityBGF Investment: £2.5mNumber of Employees: 123Turnover: less than £5mCompany location: ManchesterBGF Region: NorthInvestment Date: December 2012www.boostjuicebars.co.uk

Broadbandchoices.co.uk Price comparison website and software for consumer broadband, TV and telecomsSector: TechnologyBGF Investment: £10mNumber of Employees: 54Turnover: £10–15mCompany location: LondonBGF Region: London & South EastInvestment Date: September 2012www.broadbandchoices.co.uk

CaminoLondon based group of authentic Spanish tapas bar-restaurantsSector: Leisure & HospitalityBGF Investment: £3mNumber of Employees: 128Turnover: £5–10mCompany location: LondonBGF Region: London & South EastInvestment Date: December 2012www.camino.uk.com

─

T H E P O R T F O L I OO U R I N V E S T M E N T S : O C T 2 0 1 1 – D E C 2 0 1 3

─

BullittDesign and manufacture of high quality, high durability mobile phones for both the consumer and industrial sectorsSector: TechnologyBGF Investment: £3.5mNumber of Employees: 24Turnover: £10–15mCompany location: ReadingBGF Region: South WestInvestment Date: December 2012www.bullitt-group.com

AubinSpecialist cementing and stimulation chemicals used in drilling and preparing wells for productionSector: Oil and Gas ManufacturingBGF Investment: £2.25mNumber of Employees: 20Turnover: <£5m Company Location: AberdeenBGF Region: ScotlandInvestment Date: February 2012www.aubin.co.uk

BarburritoFast-casual Mexican restaurantsSector: Leisure & HospitalityBGF Investment: £3.25mNumber of Employees: 115Turnover: £5–10mCompany location: ManchesterBGF Region: NorthInvestment Date: March 2012www.barburrito.co.uk

BenefexSoftware supporting online employee reward and benefit schemesSector: SoftwareBGF Investment: £5.8mNumber of Employees: 103Turnover: £5–10mCompany location: SouthamptonBGF Region: South WestInvestment Date: October 2011www.benefex.co.uk

AFG MediaFancy dress and party fashion, including MorphsuitsSector: Consumer goodsBGF Investment: £4.2mNumber of Employees: 14Turnover: £10–15mLocation: EdinburghBGF Region: ScotlandInvestment Date: June 2012www.morphsuits.co.uk www.foulfashion.co.uk www.royalandawesome.co.uk

Abacus e-MediaProvider of web content management systems and audience development platformsSector: IT & Technology / MediaBGF Investment: £2.25mNumber of Employees: 70Turnover: £5–10mCompany Location: LondonBGF Region: London & South EastInvestment Date: August 2013www.abacusemedia.com

Arran AromaticsScotland’s leading manufacturer of luxury toiletries, lifestyle products and giftsSector: Consumer goodsBGF Investment: £2.8mNumber of Employees: 120Turnover: £5–10mCompany Location: Isle of ArranBGF Region: ScotlandInvestment Date: August 2013www.arranaromatics.com

Better BathroomsOne of the UK’s leading employee reward and benefit schemesSector: RetailBGF Investment: £10mNumber of Employees: 180Turnover: £30–50mCompany Location: WarringtonBGF Region: North West, North Wales & Northern IrelandInvestment Date: July 2013www.betterbathrooms.com

Cass ArtOne of the UK’s leading independent art materials retailersSector: RetailBGF Investment: £3.2mNumber of Employees: 90+Turnover: £5–10mCompany location: LondonBGF Region: LondonInvestment Date: December 2013www.cassart.co.uk

〉23 〈

CelatonSoftware automating the handling of inbound information streams into and through organisationsSector: TechnologyBGF Investment: £2.5mNumber of Employees: 63Turnover: less than £5mCompany location: Milton KeynesBGF Region: MidlandsInvestment Date: December 2012www.celaton.com

PrimroseOnline retailer of garden productsSector: Consumer goodsBGF Investment: £4mNumber of Employees: 123Turnover: £15–20mCompany location: ReadingBGF Region: South WestInvestment Date: May 2012www.primrose.co.uk

Peyton and ByrneBranded public catering, restaurant and bakery businessSector: Leisure & HospitalityBGF Investment: £6.25mNumber of Employees: 466Turnover: £15–20mCompany location: LondonBGF Region: London & South EastInvestment Date: December 2012www.peytonandbyrne.co.uk

PTSGlobal IT consulting and project management companySector: Business Services, IT & TechnologyBGF Investment: £8.7mNumber of Employees: 400Turnover: £30–50mCompany Location: LondonBGF Region: London & South EastInvestment Date: October 2013www.ptsconsulting.com

MagmaDesign and manufacture of high performance carbon fibre pipe for subsea oil and gas applicationsSector: Oil and Gas ManufacturingBGF Investment: £8.82mNumber of Employees: 90Company location: PortsmouthBGF Region: South West & ScotlandInvestment Date: December 2012www.magmaglobal.com

M Squared LasersDesign and manufacture of lasers and photonic optical instrumentsSector: Design & manufacturingBGF Investment: £3.85mNumber of Employees: 34Turnover: <£5mCompany location: GlasgowBGF Region: ScotlandInvestment Date: April 2012www.m2lasers.com

PetrotechnicsSoftware developer for hazardous industriesSector: Oil and Gas ServicesBGF Investment: £6mNumber of Employees: c.100Turnover: £10–15mCompany Location: AberdeenBGF Region: ScotlandInvestment Date: May 2013www.petrotechnics.com

GCI ComIntegrated telecoms and data servicesSector: Communications and data servicesBGF Investment: £10mNumber of Employees: 228Turnover: £50–55mCompany location: LincolnBGF Region: MidlandsInvestment Date: January 2012www.gcicom.net

CennoxSpecalist ATM products and servicesSector: Business ServicesBGF Investment: £3mNumber of Employees: 88Turnover: £5–10mCompany location: Camberley, SurreyBGF Region: South WestInvestment Date: June 2012www.cennox.com

InoappsThe leading Oracle Reseller and Platinum Partner in Europe, the Middle East and AfricaSector: IT & TechnologyBGF Investment: £10mNumber of Employees: 200Turnover: £20–30mCompany Location: AberdeenBGF Region: ScotlandInvestment Date: September 2013www.inoapps.co.uk

ShuropodySpecialist footcare provider and retailerSector: RetailBGF Investment: £3mNumber of Employees: 450Turnover: £15–20mCompany location: CoventryBGF Region: MidlandsInvestment Date: September 2012www.shuropody.com

Exchange LabThe world’s largest programmatic digital media marketplace.Sector: IT & Technology/MediaBGF Investment: £5mNumber of Employees: 60 employeesTurnover: £5m–10mCompany location: LondonBGF Region: London & South EastInvestment Date: November 2013www.theexchangelab.com

Duncan and ToddOne of Scotland’s largest independent optical chainsSector: RetailBGF Investment: £5.6mNumber of Employees: 182Turnover: £10–15mCompany location: AberdeenBGF Region: ScotlandInvestment Date: December 2013www.duncanandtodd.com

MedicinaMedical devices company specialising in enteral feedingSector: HealthcareBGF Investment: £6mNumber of Employees: 35Turnover: £10–15mCompany location: BoltonBGF Region: North, North West & Northern IrelandInvestment Date: December 2013www.medicina.co.uk

Palmer HargreavesMarketing and communications agencySector: MediaBGF Investment: £4mNumber of Employees: 50Turnover: £5–10mCompany location: Leamington SpaBGF Region: MidlandsInvestment Date: December 2013www.palmerhargreaves.com

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WorkshareTechnologySector: TechnologyBGF Investment: £7.25mNumber of Employees: 98Turnover: £10–15mCompany location: LondonBGF Region: London & South EastInvestment Date: September 2012www.skydox.com www.workshare.com

VTLManufacturer of precision engineered components for the automotive industrySector: ManufacturingBGF Investment: £4mNumber of Employees: 400Turnover: £50–75mCompany Location: HuddersfieldBGF Region: North, North West & Northern IrelandInvestment Date: September 2013www.vtl-group.com

Sub10 SystemsSpecialist developer of class-leading millimetre wave wireless solutions for mobile telecomsSector: IT & TechnologyBGF Investment: £2.5mNumber of Employees: 37Turnover: £5–10mCompany location: Newton AbbotBGF Region: South West & South WalesInvestment Date: November 2013www.sub10systems.com

STATS GroupIsolation services for onshore and offshore oil and gas pipelinesSector: Oil & gas manufacturingBGF Investment: £7.8mNumber of Employees: 158Turnover: £15–20mCompany location: AberdeenBGF Region: ScotlandInvestment Date: March 2012www.statsgroup.com

Xercise4LessLow-cost gym groupSector: Leisure & HospitalityBGF Investment: £5mNumber of Employees: 250Turnover: £5–10mCompany Location: LeedsBGF Region: North, North West & Northern IrelandInvestment Date: August 2013www.xercise4less.co.uk

York MailingUK market leader in the specialist production of promotional print materialsSector: Business ServicesBGF Investment: £10mNumber of Employees: 325Turnover: £75–100mCompany Location: YorkBGF Region: North, North West & Northern IrelandInvestment Date: July 2013www.yorkmailing.co.uk

Wear InnsFreehold community pub estateSector: Leisure & HospitalityBGF Investment: £8mNumber of Employees: 327Turnover: £5–10mCompany location: County DurhamBGF Region: NorthInvestment Date: May 2012www.wearinns.co.uk

UnrulySocial video distributionSector: Digital video advertisingBGF Investment: £4mNumber of Employees: 117Turnover: £15–20mCompany location: LondonBGF Region: London & South EastInvestment Date: December 2011www.unrulymedia.com

TrunkiDesigner and manufacturer of innovative, multifunctional travel products for childrenSector: Consumer goodsBGF Investment: £3.92mNumber of Employees: 74Turnover: £5–10mCompany location: BristolBGF Region: South WestInvestment Date: April 2013www.trunki.com

Wow! StuffToy development and distributionSector: Consumer goodsBGF Investment: £5.35mNumber of Employees: 52Turnover: £10–15m Company location: WolverhamptonBGF Region: MidlandsInvestment Date: March 2012www.wowstuff.co.uk

Statesman TravelTravel management for corporate and private clientsSector: Travel managementBGF Investment: £4.22mNumber of Employees: 150Turnover: £80–90mCompany location: LondonBGF Region: London & South EastInvestment Date: October 2011www.statesmantravel.com

SHS Integrated ServicesHigh specification industrial scaffolding servicesSector: Industrial servicesBGF Investment: £5.4mNumber of Employees: 180 Turnover: £15–£20mCompany location: Barry, WalesBGF Region: South WestInvestment Date: September 2012www.shs.uk.com

Thames Card TechnologyCredit, debit, gift and loyalty card manufacturerSector: ManufacturingBGF Investment: £3.2mNumber of Employees: 200Turnover: £15–20mCompany location: RayleighBGF Region: LondonInvestment Date: December 2013www.thamescardtechnology.com

Springfield HomecareDomiciliary healthcare provider in Yorkshire and Humberside

Springfield The GrangeResidential care home and private independent living

www.springfieldhealthcaregroup.com

Sector: HealthcareBGF Investment: £4.4mNumber of Employees: 703Turnover: £5–10mCompany location: YorkshireBGF Region: NorthInvestment Date: June 2012

〉C O N T I N U E D

JAMIE DUNKLEYJamie is City Correspondent at the

London Evening Standard, The Independent, The Independent on

Sunday and i. Jamie was formerly the financial services correspondent at

Telegraph Media Group.

DAVID PROSSERDavid is a freelance journalist who

specialises in writing about enterprise, smaller companies, personal finance and business. The former Business Editor of The Independent, David has 20 years of experience writing for a range of national newspapers, magazines and specialist

publications.

JON RHODESJon is Director of External Affairs,

Communications & Marketing for BGF. He works closely with BGF’s investee

companies, highlighting their success to business audiences and providing advice

on how they might enhance their own approach to communication.

JON SUPERJon is a press and commercial

photographer working out of Manchester since 1993. He has worked extensively for

Associated Press, and his photographs regularly feature in The Times and

Financial Times newspapers. Recent commercial clients include Bentley

motors and the BBC.

FREIA TURLANDFreia is a professional photographer

based in Bristol. During her time as a staff photographer on the Western Daily Press she was twice named West of England News Photographer of the Year, and as freelancer her work is used extensively

in magazines, exhibitions, annual reports and websites. Recent commercial clients include BBC Worldwide, Barclays, Kraft

Foods, and Royal Mail.

EMILY WESTONEmily is a partner with Equity Dynamics, a specialist corporate communications

company known for its expertise in all areas related to the financing

of businesses. It works closely with a range of investors as well as

underlying companies and the broader entrepreneurial community.

DAVID WIGHTONDavid is a former Associate Editor for

business and politics at The Times and in this role served as the paper’s Chief

Business Commentator. Prior to his five year’s tenure at the Times, David spent fourteen years at the Financial Times.

─

C O N T R I B U T O R S─

BGF is one of a range of initiatives designed to forge better, more effective relationships between the banking sector and UK businesses. BGF works in close collaboration with the British Bankers’ Association as well as with other key business organisations and government across the UK. BGF is authorised and regulated by the Financial Conduct Authority.

Aberdeen 0845 600 3699Birmingham 0845 266 8862Bristol 0845 266 8864Edinburgh 0845 266 8863Leeds 0845 600 0142London 0845 266 8860Manchester 0845 266 8861

Website www.bgf.co.ukEmail enquiries@bgf.co.ukTwitter @bgf_team

Get in touchBusiness Growth Fund has been established to help Britain’s growing, smaller and medium sized businesses. Growth potential is the key criterion. BGF will invest between £2m and £10m per business in return for a minority equity stake and a seat on the board for a BGF director. BGF has up to £2.5bn with which to make long-term equity investments in growing companies across the UK that today do not have access to this source of capital.BGF is an independent company, backed by five of the UK’s main banking groups – Barclays, HSBC, Lloyds, RBS and Standard Chartered. BGF also works closely with other key business organisations.BGF has specifically been set up on a local basis to be close to the businesses we invest in. If you want to understand more about BGF or talk about how we might support your business, or your clients, please get in touch with us.

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BGF is the UK’s most active provider of growthcapital for companies with turnover of £5m to £100m.Since 2011 we have invested over £200m in businesses just like yours. Any more questions?0845 266 8860 | www.bgf.co.uk

So, what exactly isour investment focus?High-tech to high street.Factories to fitness.Print to digital.Getaways to takeaways.Hard data to software.Big energy to a wee dram.Downtime to downloads.Good design to good health.Clicks to bricks.Whatever the sector,our focus will alwaysbe on you, your businessand your plans.