Aerelink gets in shape for investment

THE co-founder of a Widnes-based telecoms business specialising in wireless networks is preparing his firm for investment which could see it embark on an acquisition spree.

Aerelink managing director Steve Swift, who was named Cheshire Young Director of the Year by the Institute of Directors in October, has recently beefed up the firm’s management team with the arrival of a new finance director.

He also argues that there are a couple of key growth drivers which should make the business more attractive to potential investees. The first is the £830m rollout of superfast broadband networks to rural areas confirmed by the government last week, which is expected to go to tender in the new year.

The second is the spending squeeze faced by local councils. Aerelink has been a prominent provider of telecoms and wireless systems to public sector bodies since completing its first deal in 2005 (for the wireless division of Scottish cable firm Brand Rex).

“We can provide cost savings that could save jobs or they could use the money to kick-start other projects,” he said.

Swift points to a testimony given by Dundee City Council’s head of IT Ged Bell which states that it achieved an annual saving of around £300,000 after Aerelink installed a wireless network allowing the council to run a voice over IP system.

Swift said that the company’s pipeline had grown considerably following the recent Comprehensive Spending Review. He added that Aerelink was pursuing four new potential public sector deals, which could lead to Aerelink achieving a turnover for the year to March 2011 of up to £4m “depending on when orders drop”.
“It will be somewhere between £3m-£4m,” said Swift.

He co-founded Aerelink with marketing director Ian Maynard in February 2004 after the pair became disillusioned with their former employer, which is no longer trading.

“They’d asked me to set up a wireless division. I’d created a fantastic team of people but we were just treated appallingly. A switch just flicked one evening and I thought that we could do this ourselves.”

Since then, he said the pair have poured all of the money they have earned through the business back into its development, completing three deals to date which have given it a nationwide presence and taking on a new 8,000 sq ft headoffice at Widnes Waterfront last year.

However, Swift acknowledges the need for external funding to take it to the next level.

“Our aim is is becoming a serious telecoms player and to have a group turnover of £20m-£25m within the next 3-5 years. That type of growth isn’t going to be achievable organically,” he said. He added that the firm already had a number of potential targets lined up.

“We’re looking for organisations of a specific size, and either in a similar sector or service line to ourselves who would complement our existing group structure.”

In preparation, the firm has been strengthening its management team, appointing Liverpool Vision’s ICT industry director Steve Smith as its new non-executive director in November and Steve Leicester as new chief financial officer in December. Leicester joined from mobile racking systems firm Rackline, but had previously worked in the industry for GK Communications Group and PAV Data.

“We know we have a wealth of knowledge when we are ready to attract financing,” said Swift.

“We haven’t tried it yet but we have a unique advantage over other organisations where the owners are looking for finance for a way out.

“We’re looking for funding for growth.”