Universal targets £25m turnover
A SHEFFIELD wholesaler for the commercial vehicle industry is aiming to increase turnover to £25m within two years thanks to backing from South Yorkshire Investment Fund.
Universal Components UK, based on Stevenson Way, Attercliffe, is enjoying year-on-year profitability following a £100,000 loan from SYIF.
The company has used the funding to meet working capital requirements during an expansion of its operations and now aims to make strategic acquisitions to boost growth.
Universal Components was bought in 2004 after previously being owned by the RAC. The business sells equipment and spares all over the world for heavy goods vehicles and trailers.
Chief executive, Gary Hadley, purchased the business after initially arriving as interim financial director to find a buyer or close down the company. After seeing the books and its potential he put forward a successful management buy-out.
David Kernahan, managing director at Universal Components, said: “When we took over things were in a bad way with the company losing money. We quickly restructured and reviewed the product range and eventually turned it into a profitable business within the first 12 months.
“We have since enjoyed year-on-year profitability growth and 2007 will have another healthy increase.”
To continue the success of the company, Universal Components turned to the support of SYIF. Mr Kernahan added: “We worked on developing new products sourced from across Europe and the Far East. However, many deliveries of these products need to be paid for in advance or have very short payment terms.
“This product development, coupled with a growth in the customer base, began to cause a drain on the working capital. We therefore needed assistance to continue the expansion and this is where South Yorkshire Investment Fund came in.”
Chris Sellars, corporate finance manager for Hart Shaw, acted as the introducer for Universal Components.
Universal Components is now re-organising the business with the launch of two new brands.
Universal Electrics is being established to become a specialist distributor of commercial vehicle electrical components, while Universal Truck will provide parts to the heavy vehicle trade. Universal Components can then focus on distributing trailer products.
“We are also developing ways to become a wholesaler for the light commercial vehicles,” added Mr Kernahan. “There is an already established client-base in this area, we just need to expand our product range.”
Grahame Lunt, investment manager at South Yorkshire Investment Fund, said: “Universal Components have done extremely well. They have turned around a business, which was near to closing, into a successful profitable operation.
“They have continued to expand with the introduction of new products and services. We are therefore pleased to help them progress further.”
South Yorkshire Investment Fund,.created as part of the European Union Objective 1 programme, has investors including the European Regional Development Fund and regional development agency Yorkshire Forward.
It can provide seedcorn, loan and equity linked investments, ranging from £15,000 to £2.5m, specifically to help small and medium businesses meet the gaps in funding they need for growth and development. It can also provide access to business angel investors through the Yorkshire Association of Business Angels.
For more information see www.syif.com
