A successful north east diesel power generation business is sailing away from the rough seas of the recession as it targets major expansion across existing and new markets.
Royston Power Generation sells, installs, maintains, services and repairs diesel engines for a wide range of domestic and overseas blue chip clients in the marine, offshore, utility and defence sectors.
Despite the economic difficulties in its core markets over the last three years, the company has continued to grow on the back of its market-leading products, and has now achieved an annual turnover of around £9m.
Now, as part of implementing plans to add substantially to this turnover figure within the next four years, regional fund management firm NEL Fund Managers is backing Royston with a significant six-figure investment from the Finance For Business North East Growth Fund.
The investment provides the capital that Royston requires to take advantage of new opportunities for capital projects.
NEL has had a strong working relationship with Royston for several years, providing funding for various capital projects in 2007, and supporting the successful development and launch of Royston’s enginei fuel and engine monitoring system in 2009.
Since then, around 30 enginei systems have been sold to customers around the globe, and two new overseas distributors have also been appointed to help find new routes to market for the product.
In addition to this, existing contracts with organisations including the Ministry of Defence and the National Grid have been extended, and new opportunities within specific higher-value sectors are also arising.
Founded more than three decades ago, Royston employs around 80 people, the vast majority of whom are based at its Walker Riverside headquarters.
Finance Director Graham Denholm says: “The last few years have been undeniably difficult for our sector, as budgets for both capital investments and maintenance work have been hit by the recession, but we’ve come out of this period in great shape and have a lot of reasons to be extremely optimistic about the future.
“For example, the rise in fuel costs has placed extra emphasis on managing fuel as efficiently as possible, and our enginei system is ideally placed to do this by enabling owners and operators of large ships to both reduce fuel usage and engine maintenance costs and achieve optimum engine performance during a ship’s journey.
“It’s a proven system that is working successfully in vessels around the globe, and the uplift in enquiries that we’ve had about it in recent months suggests even greater revenues can be generated from it to go with the impressive sales figures it has already recorded.
“The new investment that we’ve attracted gives us the flexibility and the strength to compete for even larger and better capital investment tenders, and we’re certain it will help us reinforce our commercial success within domestic and overseas markets to an even greater degree.
“Since we began working with NEL, Royston’s turnover has risen by over 50 per cent, and we anticipate a similar rate of growth year on year in future. NEL’s ongoing support, advice and guidance has been invaluable to us as our operations have developed.”
David Thomas, investment executive at NEL Fund Managers, adds: “The Royston management team has matched technical expertise to commercial opportunities within markets that it knows inside out to create a company with an enviable track record and an extremely bright future.
“The company has also clearly shown what can be achieved with carefully planned utilisation of investment capital, and other north east businesses have a fantastic opportunity to follow Royston’s example through accessing the Finance For Business North East Fund.”
Aimed at regional businesses which are at a development and growth stage, the Growth Fund forms part of the wider Finance for Business North East Fund.
Managed by North East Finance, it will see £125m of investment capital injected into the region by the European Investment Bank, the European Regional Development Fund 2007-13 and the regional development agency over the next five years.
NEL is looking to make around 130 investments over the five-year life span of the Growth Fund, and is actively looking to speak to ambitious north east companies with robust business plans. For more information about NEL’s investment criteria, visit www.nel.co.uk or contact the investment team on 0845 111 1850.
The ERDF 2007-13 programme is bringing over £300m into North East England to support innovation, enterprise and business support. It will help create and safeguard 28,000 new jobs, start 3,000 new businesses and increase the region’s productivity by £1.1bn per annum.