Sheffield Firm Reaches for Top Gear
Published: 28th November 2007
Left to Right, Graham Lunt from South Yorkshire Investment Fund, Mark Simms of Hart Shaw, Gary Hadley Chief Executive of Universal Components and David Kernahan, Managing Director at Universal Components.
A Sheffield wholesaler for the commercial vehicle industry has come out of reverse and is reaching for top gear.
Universal Components UK Ltd, based on Stevenson Way, Attercliffe, is enjoying year-on-year profitability following a £100,000 loan from South Yorkshire Investment Fund (SYIF).
The company has used the funding to meet working capital requirements during an expansion of their operations.
Universal Components has continued growth in mind aiming to turnover between £20m and £25m in the next two years. This will be done with a mixture of continued organic growth and strategic acquisition.
Universal Components was bought in 2004 after previously being owned by the RAC. The business sells equipment and spares all over the world for heavy goods vehicles and trailers.
Chief Executive, Gary Hadley, purchased the business after initially arriving as interim financial director to find a buyer or close down the company. After seeing the books and its potential he put forward a successful management buy-out.
David Kernahan, Managing Director at Universal Components, said: “When we took over things were in a bad way with the company losing money. We quickly restructured and reviewed the product range and eventually turned it into a profitable business within the first 12 months.
"We have since enjoyed year-on-year profitability growth and 2007 will have another healthy increase."
To continue the success of the company, Universal Components turned to the support of SYIF. David added: "We worked on developing new products sourced from across Europe and the Far East. However, many deliveries of these products need to be paid for in advance or have very short payment terms."
"This product development, coupled with a growth in the customer base, began to cause a drain on the working capital. We therefore needed assistance to continue the expansion and this is where South Yorkshire Investment Fund came in."
Chris Sellars, Corporate Finance Manager for Hart Shaw, acted as the introducer for Universal Components.
David explained: "We worked with Chris in the past on another deal, so we have known him for a long time. He was aware of the huge growth our company had enjoyed and he put us in touch with SYIF to help continue this."
Universal Components are now re-organising the business with the launch of two new brands.
Universal Electrics is being established to become a specialist distributor of commercial vehicle electrical components, while Universal Truck will provide parts to the heavy vehicle trade. Universal Components can then focus on distributing trailer products.
"We are also developing ways to become a wholesaler for the light commercial vehicles," added David. "There is an already established client-base in this area, we just need to expand our product range."
Grahame Lunt, Investment Manager at South Yorkshire Investment Fund, said: “Universal Components have done extremely well. They have turned around a business, which was near to closing, into a successful profitable operation.
"They have continued to expand with the introduction of new products and services. We are therefore pleased to help them progress further."
South Yorkshire Investment Fund can provide seedcorn, loan and equity linked investments, ranging from £15k to £2.5m, specifically to help small and medium businesses meet the gaps in funding they need for growth and development.
For more information on how South Yorkshire Investment Fund can help your business please call 01709 386 377.
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About South Yorkshire Investment Fund
South Yorkshire Investment Fund provided seedcorn, loan and equity linked investments, ranging from £15k to £2.5m, specifically to help small and medium businesses meet the gaps in funding they need for growth and development.
Created as part of the Objective 1 programme, the Fund is a private and public sector business finance provider. The European Regional Development Fund and Yorkshire Forward are investors in the Fund.
South Yorkshire Investment Fund also provided access to Business Angel investments from the Yorkshire Association of Business Angels and Microloans through BiG Business Loan Fund and Donbac Microloan Fund.
Finance Yorkshire has now taken on responsibility for providing gap finance in Yorkshire and the Humber.
For further details please contact Suzanne Tinkler, on 0845 649 0000.
South Yorkshire Investment Fund Ltd is a company limited by guarantee (Registered No 3936065). South Yorkshire Investment Fund comprises three sub funds, the South Yorkshire Investment Capital Fund, the South Yorkshire Investment Development Fund, which are each managed by YFM Venture Finance Limited, and the South Yorkshire Investment Small Business Fund, which is managed by Finance South Yorkshire Ltd. YFM Venture Finance Limited (Tel 0113 294 5000) and Finance South Yorkshire Ltd (Tel 01709 386 377) are each authorised and regulated by the Financial Services Authority. South Yorkshire Investment Fund also provides a number of services, which are not regulated by The Financial Services Authority. These include the pilot Seedcorn Fund, BiG Business Loan Fund, Mentorbank and access to the Donbac Microloan Fund. BiG Business Loan Fund is managed by Donbac Ltd (company registration No. 01925556) and Key Fund Yorkshire Ltd (Tel 0114 242 8900).