Turnover was static and debts were rising. The business had undergone a restructuring exercise to cut costs, but the future still looked challenging.
There was another problem too. The company had been with a high street bank for many years for its business financing, but the relationship was not working well.
Andy Warren, finance director at NP Services, explains: “Frankly, the bank had never been very helpful. It was almost as if they didn’t want to lend us any money – as if they were actually working against us at times. It felt like they had pushed us into a bit of a corner. We needed more flexible financing to win business and grow our way out of difficulty, but it wasn’t forthcoming. When you’re going through a difficult period, you want your financier to help you!”
Things changed in February 2020 when Andy got in touch with Aldermore on the recommendation of a business contact.
“It was completely different,” he recalls. “The relationship management team, Shaun Bennett and Andrew Hook came out to see us. They wanted to talk to us and understand our business. Immediately, they became like business partners to our business. They acted as a sounding board and it felt like they were on our side. It was just what we wanted. They’ve been fantastic ever since.”
A Construction Finance facility was put in place, enabling the business to draw funds against invoices issued. There was an almost immediate pay-off.
“The opportunity came up to bid for a £1m contract with a big player in the food fit-out industry,” Andy says. “This was a major opportunity for us. But to fulfil the contract meant buying a lot of materials in advance, incurring significant costs upfront. The attitude of Shaun and Andrew was: ‘How are we going to do this together?’ It was brilliant. We agreed a facility that enabled us to bid for – and win – the contract. With our previous bank, it would have been a chicken and egg situation and I don’t think we would have been able to secure the contract.”
Fast forward to now, and the outlook at NP Services is completely different. Turnover has risen from £3.2m to £5m in the last two years, and profits have risen significantly. The business has been able to expand its workforce from 39 to 46 staff. It has a strong client base including major names within consumer goods, food manufacturers and a company which delivers capital projects for businesses across sectors including food, pharmaceuticals and logistics.
“It’s been an absolute turnaround,” says Andy. “That’s in no small part because of the financing facility we now have with Aldermore. We used to be a business with the wrong funding for what we needed. Now, the right funding is enabling us to win work, grow the business and pay down debt. I wouldn’t hesitate to recommend Aldermore to any business.”
The business has remained unscathed by Covid-19, with not a single member of staff put on furlough. Andy and his three fellow directors and shareholders have an ambition to hit £7m turnover in the next three years. The future is looking positive.
So, what would Andy’s advice be to other SMEs looking to overcome difficult times?
“Three things! Keep going. Stick to what you know best. Get the right people (financiers, advisers) in your corner. It’s a simple recipe and it certainly worked for us.”
Shaun Bennett, senior relationship manager at Aldermore, said: “We are delighted to have supported NP Services and enabled the business to overcome the challenges it was facing. The company has really turned the corner and exceeded its own expectations. Our tailored Construction Finance facility has given the business the confidence to be able to take on new work, knowing it has the capability to fund it.
We are looking forward to seeing the next stage of NP Services’ growth and continuing our strong relationship.”
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