13/05/2014

Fund proves a business boost for Middlesbrough company

A Middlesbrough firm has secured a contract worth nearly £1m with backing from the £10m Tees Valley Catalyst Fund and Lloyds Bank Commercial Banking. 

Industrial Technology Systems (ITS), which provides process control and management information systems, has secured work on a new £70m Combined Heat and Intelligent Plant (CHiP) in London.

A £200,000 loan from the Tees Valley Catalyst Fund matched by funding from Lloyds Bank Commercial Banking enabled ITS to provide a performance bond required to win the contract. The fund, which is the brainchild of Tees Valley Unlimited and backed by the Government’s Regional Growth Fund is managed by award-winning fund manager, FW Capital. The fund provides loans to help companies fund the performance, warranty bonds and guarantees that are often required when tendering for new contracts.

ITS, which employs more than 30 people on Teesside, has been sub-contracted to design and install process control systems on the CHiP project. The six-to-nine-month contract is worth £800,000 to ITS and will create new jobs in the Tees Valley.

Malcolm Knott, Managing Director of ITS, said: “The Tees Valley Catalyst Fund is a brilliant idea.  It has meant we have not had to tie-up our capital, which could have hampered us operating effectively.

“FW Capital has been extremely supportive and its speed of response enabled us to provide the bond and as a result win this prestigious contract, which we hope will open more doors and lead to us securing work on other similar projects.”

Stephen Catchpole, Managing Director of Tees Valley Unlimited, the Local Enterprise Partnership for Tees Valley, said: “Many established Tees Valley businesses, such as ITS, have the technical expertise to bid for large new contracts, but having to provide substantial financial guarantees can hinder that process.

“Tees Valley Catalyst Fund has been set up to overcome that obstruction and help firms win significant contracts as is demonstrated by the loan to ITS.”

FW Capital Investment Executive, Nicky Atkinson worked with ITS and Lloyds Bank Commercial Banking to structure the loan.  She said: “Winning this contract is a major boost for the staff and management team at ITS.  It’s an established company capable of undertaking larger contracts and loans from the Tees Valley Catalyst Fund and Lloyds Bank Commercial Banking have enabled it to fund the performance bond it needed to secure the contract.

“ITS is an important supplier in the North East and we wish them well as they fulfil this important contract.  ITS’s win demonstrates how the Fund is giving Tees Valley companies the confidence to grow by bidding for larger contracts.  We hope it will spearhead ITS’s future growth.”  

John Curtis, Relationship Director for Lloyds Bank Commercial Banking, which is matching the £200,000 loan from the Catalyst Fund, said: “Providing the necessary financial security for a bond can be an obstacle to many companies when trying to land larger contracts and grow their business.  Our contribution, allied with the support of the Catalyst Fund, has enabled ITS to overcome that barrier.”

Felix O’Hare who manages the Business Acceleration Programme for SMEs (BASME) on behalf of the North East Process Industry Cluster (NEPIC) and who introduced ITS to FW Capital said: “When ITS approached me about a way to gain financial support in order to secure a large order, I immediately thought of the Tees Valley Catalyst Fund as the ideal scheme to meet this requirement and hence strengthen the ability of a local company to win work and provide employment.”

Tees Valley Unlimited launched TVCF after pinpointing that a lack of help to provide bonds was a barrier to growth for many companies in the region.

It is anticipated that the Fund will unlock almost £700m of additional work and support approximately 1,440 jobs in Tees Valley during the next ten years. 

Funding is only usually required for a relatively short period – typically up to 24 months from contract confirmation to completion – and FW Capital can structure loan repayments to suit the needs of individual contracts.

Although primarily aimed at small and medium-sized businesses (SMEs), larger companies, which may already have a bond facility in place, will be able to access the fund to extend their existing facility to account for significant, one-off contracts which otherwise they may be unable to bid for.

ITS, which has been in business 23 years, provides process control and management information systems to sectors including Nuclear, Pharmaceuticals, Chemical and airports.

Companies interested in the Tees Valley Catalyst Fund should visit www.fwcapital.co.uk/catalystfund  or call the Tees Valley investment team on 01642 343 494