Asset based finance creates healthy cash flow for manufacturer

A Birmingham-based manufacturer is set to increase turnover and employ more staff after securing a six figure asset based finance facility from Lloyds TSB Commercial Finance.

Jenkins Distribution Ltd manufactures a variety of rotary washing lines, posts and props and is a wholesale supplier of hardware, gardening and laundry products to independent retailers across the UK, but concentrated in the Midlands and South West.

Established 25 years ago and recently acquired by current management, the business employs eight members of staff and operates from its warehouse in Stechford which houses 2,500 stock lines.

To capitalise on increasing demand during the peak summer trading months, management implemented a growth strategy to increase its customer base, boost stock numbers and diversify its product range.

The company approached Lloyds TSB Commercial Finance, which provided an asset based finance facility that enabled the firm to unlock the cash tied up in its sales ledger.

Now the company is set to increase like for like sales by 12 per cent, and is recruiting two more members of staff.

Management are also focusing on developing other divisions of the business, including increasing production of their popular own-brand washing line range, alongside its wholesale products.

Colin Walters, financial director of Jenkins Distribution, said: “Central to our success has been close relationships with customers and so far in 2010 we have continued to grow. As we supply to independent retailers in the local area we weren’t as affected by the economic downturn as many manufacturers."

“The asset based finance facility provides a stronger flow of working capital which has allowed us to build up more stock in our warehouse and invest in new products to meet changing customer demand. The finance has enabled us to quickly implement our expansion strategy and we hope to see further growth in the future.”

Martin Rowe, regional manager for Lloyds TSB Commercial Finance, said: “Demand is the driving force in the wholesale industry and Colin’s team have taken advantage of the flexible finance options to fully capitalise on the increased demand in the homeware sector."

“Jenkins Distribution is a great example of how businesses can enjoy longevity by aligning business strategy to customer demand. Like many firms which have seasonal peaks, it is essential to capitalise on demand as more people spend time gardening and doing DIY."

“Asset based finance ensures the business can build its product inventory and simplifies budget management by creating a healthier cash flow.”

June 2010