Spirit Circuits, a leading innovative manufacturer of Printed Circuit Boards (PCBs) in the UK has secured a £4.1 million funding package from Bibby Financial Services (BFS) to drive future growth. The package includes a combination of invoice finance, trade finance and foreign exchange facilities.
Spirit Circuits, based in Waterlooville, Hampshire, designs and manufactures PCBs in the UK for products in the fire and security controls, LED lighting and electronic vehicle markets. With the help of the new funding, the business has set its sights on an ambitious growth strategy, targeting 20% year-on-year growth by 2019.
To keep up with the pace of growth in the UK, BFS was able to offer an increased funding line that will help support the business as it enhances its capabilities with the support of its state-of-the-art manufacturing operations.
Steve Driver, group CEO, commented: “2017 has been a very strong year and has put us in a position to capitalise on a positive outlook for the next 12 months. BFS really understood our business and provided the support that no other funder could. Crucial to our continued success was having a trade finance package that could help us operate in overseas markets.
“We strongly believe in the value of manufacturing to the UK economy and are continuously striving to innovate and develop new technology, both of which require significant investment. Over the last 20 years, the number of UK based PCB manufacturers has decreased from 400 to about 40. Despite this fall, the UK remains a global leader in PCB design and manufacturing and we have been able to grow the business in recent years through a number of acquisitions.”
As well as designing, prototyping and manufacturing here in the UK, Spirit Circuits has an office in China which gives it access to local suppliers and allows customers to work with a business with local market knowledge. To support the flow of goods from China and meet customer orders, the business required a trade finance funding line, delivering the volume it needs and the ability to pay up front to have the goods shipped.
The business also has a new manufacturing plant in Romania that is able to supply medium sized volumes at rapid speed and deliver across Europe within 48 hours of manufacturing.
With this international profile, the business has been exposed to recent currency market volatility. Following the EU Referendum vote, the business has seen the cost of importing raw materials increase by up to 20%. In China, the business buys in US dollars and then sells in GB pounds and euros, while 30% of its sales are exports to markets including Europe, South Africa and the USA.
Driver added: “Like all businesses with growth aspirations, we have to continuously look beyond our own market and think internationally. Our operations in China and Romania provide us with the level of flexibility and ‘Just in Time’ approach to delivering the goods to our customers at the right price and right time.
“The trade finance package means we can now afford to have our products on the ocean for several weeks whilst remaining in a positive cashflow position. This has a net benefit to our business as we can transport goods through shipping freight rather than air freight, delivering significant saving on a monthly basis.
“Being able to combine trade finance and FX facilities with a leading provider like BFS is a huge advantage to us, enabling us to both access working capital to fund the entire trade cycle, and manage currency exchange risk."
Paul Fraser, UK sales director for specialist finance at Bibby Financial Services, added: “Spirit Circuits is a fantastic business that flies the flag for UK manufactured products. Working with Steve and his team, we were able to understand the intricacies and unique challenges of the business from designing and manufacturing here in the UK, manufacturing medium sized orders in Romania and working with local partners in China for large orders.
“Maintaining cashflow across the business cycle, while also ensuring that goods are moving to the desired location, is crucial. We were able to put together the right package that will help the business grow even more and take on new business and orders that were previously out of reach.”