MOD battery supplier recharged with seven figure facility
The largest supplier of batteries to the British military for use in communications and transport has secured a £1.25m funding line as it looks to expand its reach into the UK energy market.
Denchi Power has provided more than 60% of Lithium-Ion cell batteries for military equipment since agreeing a £45m contract with the Ministry of Defence in 2002. These have been integrated into the British Army’s Bowman communications system, as well as unmanned aerial vehicles (UAV) and military land vehicles.
Founded in 1996 as part of the privatisation of the UK’s Atomic Energy Agency (AEA), the business specialises in providing primary and secondary rechargeable batteries to high reliability markets. In addition to its work in the global defence sector, this includes clients in security, oil and gas and healthcare.
The business has expanded its sites in Abingdon and Thurso in the Scottish Highlands since completing a management buyout in 2014, with a total headcount of 120. The company’s latest financial results saw turnover hit £5.7m in the year to February 2017, a rise of 10% on 2016 figures.
The invoice discounting line, provided by Secure Trust Bank Commercial Finance, will enable the business to launch a new product into the UK energy market.
The ‘Slice’ batteries, which capture power from intermittent renewable energy sources, have been created to produce an alternative energy supply to the National Grid to be used in residential, commercial and utility markets.
Currently in the final stages of testing, initial sales are expected to commence in the first quarter of 2018 to address a potential market of £80m.
Tony Young, regional sales director at Secure Trust Bank Commercial Finance, said: “Denchi Power has been at the centre of powering the British military for more than 20 years, but has now set its sight on revolutionising the utilities and energy market.
“As the sector continues to remove reliance on non-renewable energy, the Slice product has enormous potential for growth, particularly with the backing and ongoing investment from the government.
“With the flexible funding we have provided, the business now has the ability to use its profitable income stream to take this opportunity, alongside its long-standing relationship with the Ministry of Defence.”
Simon Blake, corporate finance partner at Price Bailey, said: “We worked with Denchi’s management team to identify its growth expectations, future strategic vision and funding requirements.
“The decision was taken to initially leverage the company’s existing debtor book, which was unencumbered.
“This funding solution has the advantage of the shareholders not having to dilute their existing equity stake in the company as well as paving the way for additional future funding.”
