H&M Distribution seize opportunities to expand overseas

H&M Distribution is set to increase turnover by 40 per cent in the next two years on the back of its subsidiary international venture, set up after securing a six-figure invoice finance facility from Lloyds TSB Commercial Finance.

Based in Newton-le-Willows in Merseyside, the distribution company was established in 2007 and delivers pallets of freight for a wide variety of clients, from the construction and wholesale industries to electronic firms and dog food manufacturers.

Operating from a 120,000 sq ft depot, the business works in partnership with The Palletways Group, Europe’s largest dedicated provider of express distribution services.

Like many SMEs during the downturn, H&M Distribution saw increased opportunities to develop its business overseas as the weakened sterling created a favourable trading environment.

Therefore the business approached its banking partner, Lloyds TSB Commercial Finance for a cash flow boost to capitalise on prospects abroad.

The funder provided the company with a six-figure invoice finance facility, which releases the value of capital which was previously tied up in issued invoices.

Using this increased cash flow, the business launched H&M International Distribution which serves customers in mainland Europe, as well as exporting globally due to a partnership with a sea freight firm.

Since the international arm was launched in June, customer numbers have increased by 30 per cent and management hope to see turnover rise by 40 per cent in the next 12-24 months.

Simon Mulvey, owner of H&M Distribution, said: “By spreading our sales ledger across a wide variety of clients we were able to trade profitably during the recession and as we saw favourable trading conditions overseas with the weakened sterling, the opportunity to launch H&M International Distribution was too good to miss.

“The funding from Lloyds TSB Commercial Finance was instrumental in setting up the new venture as it provided a rapid cash flow boost needed to finance start-up costs.

“We are now in a strong position for future growth and we plan to continue to develop H&M International, with new customer wins our main priority.”
 
Geoff Webster, regional manager at Lloyds TSB Commercial Finance, said: “Forward thinking SMEs are increasingly looking overseas to boost sales and improve business prospects, so it shows great insight by Simon to have invested in an international trading arm.

“So far the new venture has provided a significant uplift in customer numbers and the team has predicted this will continue to rise, along with turnover.  

“Invoice finance is ideal for firms wishing to expand or launch an additional business as it is drawn from money already in the sales ledger, in the form of unpaid invoices and grows in line with the company, coping with cash flow fluctuations easily.” 

January 2011