Ambitious Elstat mulls investment amid £200m growth plan

ENVIRONMENTAL technology firm Elstat is mulling private equity investment as it sets out on an aggressive drive to grow sales from £25m this year to more than  £200m.

The privately-owned Preston company is behind an innovative technology which is installed into refrigeration units and helps the environment and saves customers money.

Its patented product ensures energy is not wasted – it learns the usage patterns of the refrigerator – which makes sure operating and product temperatures are maintained exactly when required and no longer.

Depending on usage patterns – the technology can save up to 50% of annual energy energy costs of the refrigeration unit it is installed in. Soaring demand has driven sales from just £2.6m in 2006 to around £25m this year.

Chief executive Dave Stevenson and his team, who have revived Elstat’s fortunes in the last three years says: “Elstat is a really exciting company and one with tremendous potential.

“We’re trying to change thinking on the way refrigeration is used. Historically it was 24/7, regardless of when the product was needed . Our goal is to grow revenues to £200m in the next four years.”

With a manufacturing base in China and offices already in the US, India, Hong Kong and Mexico, Elstat is looking seriously at its strategic options.

Mr Stevenson, pictured, says: “The next step for us is continued growth through a concerted effort to raise awareness of the product. We are seeing a tipping point in the market in terms of the agenda towards sustainability.

“We look very interesting now, In May 2007 when we first came in to the business I took a lot of time to take the business around various VCs to keep it alive, it was in a very difficult financial position. I could not even get past the first meeting, or even get a first meeting with some of them.

“Now we have got VCs from three different countries, and several in the UK genuinely very interested, we could probably give up some equity tomorrow, so we have a lot to think about.

“We may look at VC funding, maybe private investors. or we may extend our banking facilities. It depends really how quickly we want to develop – my biggest concern is that we miss out on the opportunity in the market place for us and I am not thinking big enough.”

Mr Stevenson, 43, from Stockport, who specialised in helping struggling businesses, said the company lacked focus when he joined it. This was soon rectified.

He recalls: “The business was making something like 30 to 40 products when I first got involved and was supplying more than 40 different customers and was basically not making any money. Within three months we were making just one product.”

Elstat – whose own environmental credentials see its sales team driving hybrid cars – is being supported in its growth by Lloyds TSB Corporate Markets.

Dave Bowen, relationship director, says: “The Elstat Group is a fantastic business, which has an extremely knowledgeable and savvy management team led by Dave Stevenson.

“The coming few years will provide Elstat with enormous growth opportunities, and we look forward to offering the support needed to turn those opportunities into a reality.”

Based on the Astra Business Centre, north Preston, Elstat employs nearly 300 people worldwide. Around 60 are based in the North West.