A Bradford-based importer, distributor and retailer of confectionery has received a further investment of £500,000 from NPIF – Mercia Debt Finance, which is managed by Mercia and is part of the Northern Powerhouse Investment Fund (NPIF).

Candy Hero was founded in 2008 by brothers Frank and Leo Dillon, both former web designers. The business has quickly grown in size and now stocks one of Europe’s largest ranges of mainstream American candy. It also sells British retro sweets, energy candy, Jelly Belly, Japanese snacks, gifts, and other novelty and specialist items, boasting a range of over 20,000 products.

NPIF first invested £250,000 in Candy Hero in 2020 when it was generating £5.7m in turnover. Since then, turnover has almost trebled to reach £15.7m in December 2021 and an increase of £3m is anticipated this year.

Candy Hero has recently moved to a 20,000 sq ft premises, which accommodates a larger stock selection in response to the growing demand from its business customers. The funding will support the business to create seven new roles and further capitalise on its position as one of the UK’s top three importers of confectionery.

David Wright, Investment Manager at Mercia, said: “I’ve known Frank for four years, having worked with him so closely during that time. Naturally, I am very enthusiastic about their continued growth especially as this is a family-owned regional business. The co-founders, who are brothers, make a strong team who are committed to the continued investment into the business and its people. I look forward to seeing where this great regional business goes next.”

Frank Dillon, co-founder of Candy Hero, said: “We’ve experienced phenomenal growth over the past two years. The initial loan from NPIF – Mercia was the catalyst for this journey. I was delighted when NPIF and Mercia’s David Wright were able to support my request for an additional £500,000 of funding. This further investment has made a huge difference to the company and is supporting us as we drive the business forward, scale our operations and hire staff.”

Sean Hutchinson at British Business Bank, said: “Candy Hero has seen phenomenal success since the Northern Powerhouse Investment Fund first invested, and continues to see its revenues grow. Its story since then demonstrates how funding can make a real and measurable difference, providing vital funding to enable job creation and expansion into new markets. In turn, this helps create a more prosperous regional economy.”

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

Mercia Asset Management PLC, the proactive, regionally focused specialist asset manager with c.£959million of assets under management (“AuM”) is pleased to announce its preliminary results for the year ended 31 March 2022.

We provided a live management presentation and Q&A, presented by Dr Mark Payton, Chief Executive Officer, Martin Glanfield, Chief Financial Officer and Julian Viggars, Chief Investment Officer.

 

Read the full RNS here
Visit our Prelims 2022 area here

 

Mercia Asset Management PLC, the proactive, regionally focused specialist asset manager with c.£959million of assets under management (“AuM”) is pleased to announce its preliminary results for the year ended 31 March 2022.

Highlights

  • Adjusted operating profit up c.152% to £8.4million (2021: £3.3million)
  • Realised gains and finance income totalling £12.2million generated from the sale of Faradion
  • £11.4m fair value movement in direct investments, including fair value uplift of £6.7million in nDreams following significant third-party investment
  • Profit before taxation of £27.4million (2021: £34.0million)
  • Proposed final dividend up c.67% to 0.5 pence per share (2021: 0.3 pence per share)
  • Net assets of £200.6million (2021: 176.0million)
  • Net Assets per share up c.14% to 45.6 pence (2021: 40.0 pence)
  • Cash and short-term liquidity investments of £61.3million (2021: £54.7million)

Managed fund developments

  • Third-party funds under management (“FuM”) of c.£758million (2021: c.£764million) contributed £19.5million in revenue, excluding performance fees, for the year (2021: £18.2million)
  • Cash returned to fund investors from successful realisations of c.£87million (2021: c.£27million)
  • Venture FuM c.£592million (2021: c.£600million)
    • £15.7million successfully raised across three Enterprise Investment Scheme (“EIS”) funds during the year
    • c.£15million additional allocation from British Business Bank under the Northern Powerhouse Investment Fund Equity mandate, with effect from 1 November 2021
    • Interim and final dividends totalling £17.0million paid by the three Northern Venture Capital Trusts (“VCTs”), in addition to special dividends paid of £20.8million arising from successful realisations
  • Private equity FuM c.£48million (2021: c.£54million)
    • Portfolio trading and prospects improving post pandemic
  • Debt FuM c.£118million (2021: c.£110million)
    • Accreditation awarded to the Group to deliver debt funding under the Recovery Loan Scheme (“RLS”)
    • c.£11million additional allocation from British Business Bank under the Northern Powerhouse Investment Fund Debt mandate, with effect from 1 November 2021

Direct investment portfolio developments

  • Direct investment portfolio fair value of £119.6million (2021: £96.2million), up c.24% notwithstanding the significant investment realisation of Faradion, completed in the year
  • Sale of Faradion in January 2022 resulted in total cash receipts of £19.4million (including a £1.5million loan repayment), generating £9.9million of realised gains together with crystallised loan interest and redemption premiums totalling £2.3million for the year
  • £18.4million net invested into 16 portfolio companies (2021: £15.4million net invested into 19 portfolio companies), including new direct investments into Forensic Analytics Limited and Pimberly Limited
  • Completion of a significant third-party investment into nDreams, resulting in a £6.7million fair value increase to the Group’s investment holding value as at 31 March 2022

Post year end developments

  • In April 2022 the Group’s AuM surpassed £1.0billion, with the three Northern Venture Capital Trusts raising £40.0million through the allotment of new shares, plus Mercia’s maiden Knowledge-intensive Impact EIS Fund raising £4.5million. Both successes reflect continued confidence in the track records of the VCT and EIS portfolios and the investment teams who manage them
  • Demerger from Intechnica of its cybersecurity bot-management business Netacea, to allow both companies to benefit from a refined focus on capitalising on their respective significant growth opportunities. Mercia retains stakes in both businesses post demerger equal in value to its previous holding value
  • Exciting commercial progress continues to be made by the direct investment portfolio
  • Mercia has been accredited as a carbon neutral organisation, demonstrating its commitment to ESG principles

Mark Payton, Chief Executive Officer of Mercia, commented:

“I am pleased to share a set of results that showcase the strength and maturity of Mercia and its business model. The significant success that we have seen during the last two financial years, and our positive future prospects, have been made possible by the combined efforts of everyone connected with Mercia. I would therefore like to express my sincere gratitude to the amazing portfolio companies that we have the privilege to support. As a Group, we are also very appreciative of the growing belief in Mercia from our third-party fund investors, and both VCT and Mercia shareholders, that the UK regions can deliver value and returns. Finally, I would like to thank Mercia’s employees, without whom we would not have become who we are today: #OneMercia.”

Read the full RNS here
Visit our Prelims 2022 area here

 

A Yorkshire consultancy that helps firms to meet the standards required by the UK’s financial services watchdog has secured a £200,000 loan from NPIF – Mercia Debt Finance, which is managed by Mercia and is part of the Northern Powerhouse Investment Fund (NPIF), as new rules increase demand for its services.

The Compliance Company helps financial services firms and those offering consumer credit to gain authorisation from the Financial Conduct Authority (FCA) and comply with the rules. The company, which currently employs 15 staff and has offices in Leeds and Derby, has increased client numbers by 13% in the past year. It now supports around 350 businesses throughout the UK such as lenders, insurance brokers and claims management companies as well as motor dealers and retailers offering payment plans.

The funding will enable it to gear up for the expected growth in demand as tougher standards are introduced and regulations are extended to other sectors. From July, funeral plan providers must be authorised by the FCA, and the government is also planning to regulate some types of ‘buy now pay later’ lending and crypto assets.

Meanwhile, firms which are already regulated are facing new obligations, such as the Consumer Duty guidance which aims to improve the standards of care they offer consumers. Further initiatives include efforts to promote diversity and inclusion and encourage investment in green energy as the UK moves towards its net zero goals in the financial services sector.

The Compliance Company was founded in 2013 by Ian Beardmore after the FCA took over as the UK’s financial regulator for consumer credit. It was one of the first consultancies to help companies comply with the demands of the new regime and is now one of the leading firms of its type in the UK. The business, which also offers e-learning courses, expects to create at least two new jobs in the coming months.

Ian Beardmore, founder, said: “As the regulatory landscape has undergone a major shake-up in recent years, our consultants have been helping companies to navigate the changes and operate in a compliant way. The company has been expanding steadily and the introduction of new standards will only create additional demand for our services. The funding from Mercia and NPIF will help us to take the business to the next level.”

Andy Clough of Mercia, said: “FCA regulation is vital to protect consumers but the rules can be a real burden to smaller businesses without a dedicated compliance specialist. The Compliance Company plays a valuable role in helping them to meet their obligations, and in supporting a vibrant financial services sector. The business is already one of the UK market leaders and the funding will help it to continue its growth and take advantage of new opportunities.”

Sean Hutchinson at British Business Bank, said: “There is an abundance of opportunities that access to finance can unlock for businesses in the North. With this loan, The Compliance Company is able to create new jobs and prepare for a surge in demand brought upon by new regulation. By supporting companies adapting to new market trends, NPIF is able play a key role in the dynamic Northern business environment.”

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

 

NPIF – Mercia Debt Finance, which is managed by Mercia and is part of the Northern Powerhouse Investment Fund (NPIF), has lent over £50m since its launch five years ago.

During that time the fund has provided loans to almost 200 businesses across Yorkshire and Humber and helped to attract an additional £31m in private sector co-investment.

It has supported a diverse range of businesses, from traditional manufacturers to rural businesses and tech firms. They include Sheffield’s Tinsley Bridge Group, a leading provider of suspension parts for trucks and industrial steel products; Rosehill Polymers of Sowerby Bridge which makes rubber products including security barriers, rail crossings and traffic islands; Wold Top Brewery in North Yorkshire; Huddersfield software company Adventoris; and Sheffield animation studio Red Star.

One of the first businesses to benefit was STEPS, a bespoke Sheffield rehabilitation centre founded by sisters Toria Chan and Jules Leahy. The fund provided investment during the very early stages of the business to help it develop and grow. STEPS is now one of the leading facilities of its kind in the region, employing around 140 staff.

NPIF – Mercia Debt Finance can provide loans from £100,000 to £750,000 and is accredited under the government’s Recovery Loans Scheme (RLS), which aims to support business in the post-pandemic period and improve the terms for SMEs looking to borrow, including lower rates of interest than would otherwise be the case.

Paul Taberner, Managing Director, Debt at Mercia, says: “NPIF – Mercia Debt Finance has played a key role in plugging the funding gap between the amount that banks and other funders are able to provide to a business and the amount that it requires for growth. Over the past five years the fund has supported broad swathes of the regional economy. It has helped businesses take on new projects, invest in equipment, develop new products, adapt to changing markets and navigate the challenges of the pandemic.

“Whereas many lenders will assess a company purely on its past trading record, we are prepared to consider what it could achieve in the future – which is particularly important as businesses recover from the pandemic. A key benefit is that instead of having to fill in an online form or deal with a call centre, businesses have their own investment manager who understands their business and will work with them to achieve their goals.”

Sean Hutchinson at British Business Bank adds: “The work that the Northern Powerhouse Investment Fund and Mercia have been doing over the last five years has been transformational for businesses in Yorkshire and Humber. Since it launched five years ago, businesses have been able to thrive and achieve their goals, using investment to create jobs, launch new products, and expand into new markets. I’m excited for the future opportunities that this fund will support, and build, creating a stronger North.”

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

 

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