Sugden Limited

The company manufactures hot plates which are used to create English muffins, exporting and installing the machinery around the world. The company supplies bakeries with complete production lines capable of turning out up to 26,000 English muffins per hour.

How was the deal introduced?

The team was initially introduced to the company by Steve Wall from Access 2 Finance in 2014. Our detailed knowledge of the business enabled us to provide further support four years later.

What did the company plan to use the initial funds for?

The first round of investment was utilised to support bank facilities to merge the businesses of Baldwin Technical Services Limited and Sugden Limited.  The integration was successful and in 2018 Mercia provided a second loan alongside new bank facilities allowing Sugdens to relocate to new purpose-built factory premises, proving much improved manufacturing facilities.

What progress has the company made since the first investment?

This company has grown significantly. The combined business has increased turnover from £5.2m to almost £10m, with profits rising from £655,000 to £1.3m. The company has also been able to materially increase its presence in export markets, installing equipment in areas such as New Zealand, Australia and USA.

The Mercia Effect

What have we been able to do for this company as a result of our involvement?

The flexibility of investment in terms of providing gap funding, has helped them enormously. Whilst the loans have been structured over a five-year term, the company retains the flexibility to repay loans early without penalty if it has surplus cash available. We have been able to make introductions to BOOST (Lancashire's growth hub) and through that the company has received help and support with its export drive. We also take a pragmatic view in terms of security, preferring to concentrate on operating cash flow and the company's ability to repay its debt, rather than being ‘hung up’ on tangible security to cover the loan.