Tuesday, December 11, 2018

News: Origin Broadband needs support of creditors and investors

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Origin Broadband has been hit by high costs and bad debts as it tries to press ahead with ambitious growth plans.

Reports claim that a Company Voluntary Arrangement (CVA) is being arranged with its creditors in order to keep the company trading, but redundancies are expected.

Launching in 2011, Origin has developed its own infrastructure and now host the sixth largest broadband network in the UK. Supplying phone and internet services to businesses and homes across the UK, Origin aims to reach 250,000 customers by 2020.

As part of the growth plans, earlier this year the firm moved from Doncaster to the 53,665 sq ft Unit 7 at Callflex Business Park, Manvers which the firm said offers an even bigger opportunity for growth.

Financial statements filed with Companies House show that the company posted a full year loss to March 31 2018 of £7m but funding of £6.75m was secured from investors during and after the financial year to return the business "to a positive net asset position combined with increased cash funds."

Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) specialist, Calculus, first invested £3m in December 2016 and has gone on to invest a total of £6.5m into Origin Broadband.

Trade website, ISP Review, is reporting that Origin have appointed business recovery professionals, Chamberlain & Co, and that creditors have been informed over a proposed CVA. It added that Origin is also proposing to cut their staff count by approximately 42%.

Struggling companies can use a CVA to pay creditors over a fixed period. 75% approval from unsecured creditors is needed to complete a CVA which enables the company to continue trading.

Trade creditors were owed £4.8m at the end of the year to March 31 2018.

The company continues to undergo work to secure further funding to support "significant potential growth plans."

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The financial results state: "Origin Broadband saw significant growth in 2017/18, with 117% growth in revenue combined with 192% growth in customer numbers. Having established a residential customer base, the company spent the second half of 17/18 focused on system and process improvement to support future growth in the following financial year.

"The high growth experienced by the company has seen significant up-front costs combined with overhead costs and prudent bad debt assumptions leading to a full year loss to 31 March 2018 of £7.0m. During 2017/18 the company raised £3.5m investment from our institutional EIS investor, combined with a £3.25m raise in May 2018 that return us to a positive net asset position combined with increased cash funds. This final investment tranche was a combined investment between our incumbent EIS investor with a new VC based investor.

"The company is currently working with this new VC investor to provide significant capital funding against subscriber targets which will give the business headroom to operate in the longterm."

Directors have drawn up financial forecasts based on the new investment being delivered and scaled back plans based on no new investment. Signed off in September, the directors state that "they have a reasonable expectation that the company will have adequate resources to continue to operate for the foreseeable future."

But company auditors warn that: "On the basis that major suppliers and investors continue to support the company it can be considered a going concern and we have not seen anything to suggest that this is not the case.

"However should support from creditors end or continued support from investors fail to materialise, the company does not have the cash generative ability to continue trading in its current form."

Origin Broadband website

Images: Origin Broadband

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News: Metalysis a prime example of the strength and economic potential of the North

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Innovative Rotherham firm, Metalysis recently hosted a delegation led by MP Richard Harrington – Business and Industry Minister – as it celebrated becoming a Northern Powerhouse Partner.

The Manvers company holds the worldwide exploitation rights to the FCC Cambridge process which sees specialist powder metals created in a simple, cost effective process with significant environmental benefits. With a Materials Discovery Centre on the Advanced Manufacturing Park (AMP), also in Rotherham, the firm raised a further £12m earlier this year ahead of the start of commercial production.

The Northern Powerhouse Partners Programme is a network of leading companies who all believe strongly in the economic potential of the North, and support the need for a combined effort by government and business to realise that potential.

Commercial production in September marked the technology's ascension from a Cambridge University breakthrough, through more than a decade of development, to offering industrial scale production of demand driven, high value powder alloys for international aerospace, automotive, additive and advanced manufacturing applications.

More broadly, the Partners Programme's ethos encapsulates Metalysis' clear and continued commitment to growing the business in the North of the UK, and using its technology to provide a nationally significant capability for global metal powder supply chain activity.

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Dr Dion Vaughan, CEO at Metalysis (pictured, far right), said: "Metalysis is proud to mark our commitment to the region by joining the Northern Powerhouse Partners Programme.

"During our time with MP Richard Harrington and his colleagues, we have enjoyed discussing Company ambitions for our technology as part of the national agenda set forth in the Industrial Strategy.

"We look forward to working with the Northern Powerhouse, its networks and BEIS to strengthen international interest and investment in the overwhelming potential of the Northern economy."

Jake Berry, Northern Powerhouse Minister, added: "Supporting research and innovation is at the heart of our modern Industrial Strategy so I’m pleased to welcome Metalysis as our latest Northern Powerhouse partner.

"As an ambitious Yorkshire-based company with a commitment to boosting skills, technological development and growing production, they share our vision for a strong Northern Powerhouse economy."

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MP Richard Harrington visited Metalysis at its Materials Discovery Centre on the AMP to discuss the recent developments and hear about its ambitions for future expansion.

Work is already underway on "Generation 5" - manufacturing options for thousands of tonnes per annum of these high value metal alloy powders. It is designed to retrofit into an existing industrial site.

Richard Harrington, Business and Industry Minister (pictured, second right), said: "From a Cambridge University breakthrough to a growing commercial operation that is supporting production on an international scale, Metalysis is a prime example of the strength and economic potential of the north.

"Through our modern Industrial Strategy, we are harnessing our research, innovation and manufacturing strengths to help even more businesses realise their economic potential and apply them on an industrial scale – solidifying our position as a world-leader in advanced manufacturing."

Metalysis website

Images: Metalysis

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News: MBO at Rotherham manufacturer

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Rotherham headquartered Harvest Healthcare, a leading manufacturer and supplier of high-quality healthcare equipment, has changed ownership in a Management Buy-Out (MBO) led by managing director, Neil Davis.

Based at Templeborough, Harvest Healthcare manufacture and distribute quality healthcare equipment to the NHS, care home and community markets, throughout the UK and internationally. The company manufactures, supplies and services active and static mattresses and cushions, profiling beds, and moving and handling equipment. It has long term relationships with several national blue-chip care home groups as well as serving most local authorities around the country.

The deal, for an undisclosed sum, sees Davis acquire all of the shares in the company from founders Phil and Jim Hutchinson. Both Phil and Jim have steadily reduced their involvement in the day to day running of the company over the last few years.

Sheffield based dealmakers, Castle Square Corporate Finance, provided corporate finance advice to the management team, leading negotiations on transaction value as well as deal structure, and also running the fundraising process alongside law firm, Keebles who provided legal services and advice. HSBC provided the necessary finance to complete the transaction.

Davis joined the company in February 2017 and has transformed the fortunes of Harvest, delivering significant growth in turnover and profit, culminating in him being given an opportunity by the owners to put together a MBO bid.

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Neil Davis (pictured) said: "I am proud and excited to have the opportunity to lead the long-term development of Harvest Healthcare, and am grateful to the professional team who have helped make this possible. We are determined to help more and more customers provide exceptional care to their residents and patients, whilst building fulfilling careers for our staff, and growth opportunities for our supply chain partners."

Patrick Lynch, corporate finance executive at Castle Square, said: "It is fantastic to have advised the highly experienced and successful managing director and entrepreneur Neil Davis on the transaction. During the last 21 months Neil has been supported by the wider management team, in particular finance director Tim Woods, who has also provided tremendous support throughout the transaction.

"The buy-out gives Harvest the platform build on the recent success and continue to manufacture and supply innovative high-quality equipment supplied into multiple healthcare environments."

Matt Ainsworth, corporate partner at Keebles, added: "We are delighted to have worked on this transaction. Harvest Healthcare is a great example of some of the fantastic businesses we have in South Yorkshire that local funders and deal advisory teams can support. We are confident that Neil and Tim will capitalise on the huge potential in the care sector to drive the business forward."

Following the structured debt fundraising process led by the Castle Square team, HSBC emerged as the preferred funding partner - providing the acquisition finance on the transaction alongside working capital facilities.

Chris Alsop from HSBC's corporate team in Sheffield, said: "I am very happy to back this strong management team whom I am confident will take Harvest Healthcare from strength to strength."

HSBC were advised on the legal aspects of the transaction by Irwin Mitchell and financial due diligence was provided by Sheffield's BHP team. Hollis & Co provided specialist tax due diligence.

Harvest Healthcare website
Castle Square website
Keebles website
HSBC website

Images: Harvest Healthcare / Will Armson

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Monday, December 10, 2018

News: Bodycote announces further expansion in Rotherham

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Bodycote, the world's largest provider of heat treatment and specialist thermal processing services, has revealed plans for significant expansion at its new site in Rotherham.

Bodycote improves the properties of metals and alloys, extending the life of vital components through heat treatment services and specialist thermal processes, Hot Isostatic Pressing and surface technology.

Over the summer, Bodycote opened a new facility on the Advanced Manufacturing Park (AMP) in Rotherham to support the aerospace and power generation markets in the UK and Europe.

At the official opening event last week, bosses at Macclesfield-headquartered firm confirmed that it had already secured extra units on the AMP.

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Tom Gibbons, president of Bodycote's Aerospace, Defence & Energy division, said: "Due to customer demand and interest since the announcement of this new plant in July, we are investing in further capacity and technology. The additional space we secured here at Rotherham is nearly three times the size of our existing unit. We are committed to ensuring we are able to meet our customers' demand in the years ahead."

The new advanced heat treatment centre is within Harworth Group's R-evolution development on the AMP, close to Rolls-Royce's £110m casting facility. In April this year, a contract with Rolls-Royce's Civil Aerospace business was announced that is expected to be worth over £160m in incremental revenues over the next 15 years. Sales will ramp up over the next five years.

The Rotherham facility was officially opened by Andy Greasley, executive vice president of Rolls-Royce's Turbines Supply Chain Unit. He said: "Heat treatment and processing is a vital part of our supply chain and Rolls-Royce are delighted to be supported by Bodycote on the Advanced Manufacturing Park in Rotherham. Close coupling of this capability to our own Rolls-Royce business is critical for our future success and our relationship with Bodycote is one that we truly value."

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Also speaking at the event, Colin Sirett, CEO of the Advanced Manufacturing Research Centre, said the new centre will bring a key capability to the AMP: "We've got everything from aircraft parts through to carbon fibre chassis for supercars all being manufactured on this site; the one piece of the process that was missing was materials processing.

"We can cast, we can forge, we can assemble, we can machine, but the one key element that was missing is exactly what Bodycote brings to the park. So it's great to welcome the Bodycote team here and we are looking forward to working with them for many years to come."

Bodycote website

Images: Bodycote

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News: Trust needed before building can begin at Bassingthorpe

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Rotherham Council is proposing to pool its land together with that of other landowners in order to progress development at Bassingthorpe Farm.

As part of the Local Plan core strategy that was adopted in 2014, the 215 hectare area close to Rotherham town centre was controversially removed from the Green Belt and designated as a Strategic Allocation and the main location for new housing, employment and retail growth.

Around 57 hectares (26%) of the site is under Rotherham Council's ownership and the Council has been leading on the proposals for a number of years, working collaboratively with major landowner, Fitzwilliam (Wentworth) Estates, on how to bring forward the project.

The Council is now finalising details of a proposal to put its Bassingthorpe land into a land pooling arrangement, known as a Bare Trust, to progress delivery and enable a partner to be procured to help deliver the development.

Trustees would appoint a partner to sell off land parcels to housebuilders and commercial developers in return for a share of the capital receipts.

It was in November 2016 when the authority approved plans to search for a "Promotion Partner" that would bring skills and funding to facilitate the delivery of the site.

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2,400 dwellings could be joined by 11 hectares for employment use, a local health centre, primary school, and a local centre together with the green and social infrastructure necessary to create facilities to serve the new and existing communities.

Masterplanners, WYG, undertook consultation last year on the vision to create a "garden suburb for the 21st century." It showed a range of character areas including a new modern urban living housing area at Clough Bank View. A mixed use area is also included incorporating the Grade II Listed Bassingthorpe Farm buildings and showed a primary school, retail, health, community uses and sports pitches.

Rotherham Council believes that development "will not commence before 2021 due to the size and complexity of the site." The authority are also set to prepare planning guidance known as a Supplementary Planning Document (SPD) for the site which will require further consultation.

One key issue is the search for external funds to support the infrastructure around the site. Rothbiz reported in August that Rotherham Council had drawn up an outline business case for £8.45m worth of transport improvements.

Bassingthorpe was one of a number of projects discussed at a recent Housing Developer Summit where Rotherham Council highlighted plans to boost housebuilding in the borough.

The overall number of homes in the borough increased by 479 units in the 2017/18 financial year with 233 new homes delivered in the borough during this current financial year. The Council's target is currently 641 units a year.

Images: RMBC / WYG

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