A Newport-based bakery has invested £100,000 in new machinery to boost production and service increased demand, after securing an asset finance loan from Lloyds TSB Commercial Finance.
D Gibbon & Sons, which was established over 40 years ago, is a manufacturer and wholesaler of its own bread, rolls and cakes as well as having baking contracts with national brands such as Hovis.
It is now a £5.5 million turnover business which employs over 50 people and makes approximately 1,000 deliveries every day across a 120 mile radius.
The company supplies almost 30 Aldi stores throughout the UK and expects to double this number over the next 12 months. It also aims to win new business with convenience stores, as well as increase catering contracts with firms such as Enterprise Foods, and Booker.
In order to boost production and capitalise on the growing demand for its products, D Gibbon & Sons required two new ovens, a flow wrapper and a van. To fund the capital outlay, the business approached Lloyds TSB Commercial Finance, which provided an asset finance facility.
Russell Gibbon, managing director at D Gibbon & Sons, commented: “Paying cash outright for the new equipment would have significantly reduced our working capital but Lloyds TSB Commercial Finance ensured we were able to fund upfront costs, allowing us to comfortably expand.
“The machinery has enabled us to produce more of our goods, increase capacity and target new business and larger contracts.”
Danielle Bruton at Lloyds TSB Commercial Finance, said: “When tendering for larger contracts, like D Gibbon & Sons, it’s important to have the ability to fund the upfront costs of materials required, as these costs can drain a firm of working capital and cause cash flow issues.
“Asset finance enables companies to obtain funding for the purchase of significant assets they need to seize growth opportunities. It allows firms to spread the cost of these assets without having to fund off the balance sheet.”
In addition to the asset finance facility from Lloyds TSB Commercial Finance, D Gibbon & Sons has also been banking with Lloyds TSB Commercial for 40 years.
Sean Phillips, relationship manager at Lloyds TSB Commercial, added: “We’re committed to helping our customers find the most appropriate funding. Being a part of a large Group means that we are able to draw on a variety of sophisticated lending products, not just traditional loans and overdrafts.
“We worked closely with management at D Gibbon & Sons and our colleagues at Lloyds TSB Commercial Finance to identify the business’ requirements and provide specialist financing to suit these needs.”
January 2010