Smart meter firm’s £16.25m funding boost
WIGAN-based independent business support services company providing gas and electricity metering services to the UK utilities sector, Lowri Beck Services (LBS), is set to switch homes from dumb meters to smart meters after receiving £16.25m funding package from Santander Corporate & Commercial.
This follows the introduction of new Government regulations for the rollout of smart meters.
By the end of 2020, gas and energy companies are required to have installed smart meters in every home and business in the UK, which will result in some 50 million smart meters being installed.
In the short to medium term this will lead to a shortage of cash flow, however in the long term will lead to significant growth opportunities.
However, the funding package from Santander will allow LBS to help fulfil the statutory requirements.
Contracts have already been agreed with two leading energy firms and LBS is forecasting its annual revenue to grow from £36m in 2014 to nearly £100m by 2018.
The support from Santander includes £6.5m in growth capital loans, which will be used specifically to help LBS to invest in significant levels of staff training and upskilling. These new contracts alone will require more than 500 meter installers.
Santander’s Growth Capital loans are targeted at businesses with annual turnovers of up to £50m which have a demonstrated history of high year-on-year growth in turnover, profit or employment.
The facility is part of the bank’s Breakthrough product suite, which is aimed at fast-growth, ambitious businesses.
LBS managing director Bob Vernon said: “We have seen an annualised growth rate of 20% since 2002, a figure which we expect to grow once the smart meter rollout begins.
“There are clear opportunities available as a result of the new regulations and the £16.25m investment and funding from Santander will allow us to take significant advantage of these changes affecting the whole of the UK.”
Nancy Butler, relationship director, Santander Corporate & Commercial, said: “LBS is an impressive business which has seen high growth rates in recent years as a direct result of understanding the opportunities presented by the energy market.”
LBS was advised by Andrew Baggott of Clarke Nicklin Cheadle.
