In 2004, the then parent company of Specialist Engineering Services Ltd (SES),one of the UK’s premier railway and civil engineering providers, acquired the business assets of TEi Ltd and brought it into the SES Holdings Group. SES already held an impressive client portfolio, including Network Rail and Transport for London. TEi Ltd, a leading engineering manufacturing and installation organisation, continued to prosper under the SES Group. As a result, SES Holdings developed into a circa £50 million turnover Group.
In 2017, another subsidiary trading company under SES Holdings experienced cash flow challenges. A common occurrence amongst SMEs. However due to the cumbersome and connected funding structure across SES Holdings, it caused an unexpected, and unwelcomed, financial ripple effect. TEi Ltd and SES, two successful subsidiaries generating £26 million and £10 million turnover per annum respectively, began to feel the strain. Something needed to be done and quickly.
Flexibility key to adapting
The decision was taken to dismantle the Group. SES Holdings approached its financier to enable its businesses to separate and operate on their own merits. Providing each company with its own line of funding would ensure they would continue to flourish and innovate.
Although the board anticipated a quick and easy solution this was not available from its traditional financier. Dave Hyland, managing director, SES, explains, “We very quickly came to the end of our journey with our existing provider of invoice discounting finance. Despite being a successful Group turning over £40 to £50 million every year, when we needed their support and flexibility the most, they could not provide the service we needed. Inevitably we went on the search for a new financier. We needed a funder who offered us not only quick and flexible funding, but more importantly a partnership.”
SES Holdings needed to move fast to find a new funder to minimise the financial impact being felt across the Group and provide the very solution its traditional financier could not offer.
Selecting a partner, not just a source of funding
SES Holdings turned to Independent Growth Finance (IGF) to restructure the group’s finance and support ongoing working capital. Dave Hyland continued, “Selecting IGF was an easy choice. They listened to our ambitions and challenges and understood the urgent need to completely restructure our finance. They promised a timely transition and funding certainty and absolutely delivered on it.”
IGF provided SES with £2.5 million invoice discounting and TEi Ltd £5 million. IGF was able to provide better rates for SES and TEi Ltd compared to their previous financing structure. In May 2018, just weeks after partnering with IGF, tailor made funding facilities were rolled out across SES and TEi Ltd.
Gaining freedom to continue on the track to success
Richard Spielbichler, ABL Director, Independent Growth Finance, said, “Companies across all sectors need to adapt and evolve at stages during their lifetime. In many instances it is due to growth or expansion. Sometimes however those situations are forced upon companies and they immediately turn to their lending partners for advice, support and funding. At IGF we have genuine empathy for companies with entrepreneurial spirit who come to us to discuss ways to adapt. Providing SES and TEi Ltd with a total of £7.5 million invoice discounting to enable a financial restructure was a straight forward decision for us. Ultimately it has allowed both companies the freedom to continue prospering and innovating.”
Following the funding roll-out, both companies have secured the freedom and financial backing to continue to execute major projects and provide expert service across their respective sectors; both now prospering under their own tailor-made financial structure.
