Finance in Cornwall 2016

Businesses trading for > 2 years

Scott Bentley - Partner

“Cornwall, we have lift off!”

pkf-francisclark.co.uk

.

Structure of morning

• Background, EU “calls”, grants and Banks (8:30am to 9:50am)

• LEP, Cornwall Chamber, FSB• Grants and Banks (intro)

• Funding and Business Support – stratified by age of business (10:10am to 11:20am)

• Equity, Business Support and Company presentations (11:40am to 1pm)

• State Aid• Crowdcube pitch..

• Q&A one to one/ Networking (1pm to 2pm)

pkf-francisclark.co.uk

• 8 minute presentations on:

• Invoice financing• International trade finance• Peer to Peer (unsecured)• Peer to Peer (secured)• Growth Funds - mezzanine• Growth Funds - equity• London Stock Exchange…• Get Set for Growth (Business Support)

Funding and support – for business >2 years old

Debt – Invoice Finance

John Hughes – RBS Invoice Finance

10th May 2016

What we’ll cover

03/05/2023Presentation information in footer 5

1. Getting paid what you are owed: reality check

2. What this means to UK businesses

3. What have businesses done?

4. What’s been the benefit?

5. How does Factoring work?

6. How does Invoice Discounting work?

7. How the invoice finance solutions work in practice

Getting paid what you are owed: reality check

52% of British SMEs are owed at least £10,000 each in late payments

British SMEs are owed £67.4 billion in unpaid invoices

60% of businesses have experienced late payments

Two-thirds of businesses have had to write off payments

Sources:

1 – ABFA, 2 BACS, 3 FSB, 4, Talking Business (All October 2015)

03/05/2023Information is classified as PUBLICSecurity may be required. Product fees may apply.

What this means to UK businesses

Cash flow problems

Restricted cash to invest

Wasted time on resource chasing payments

Need to write off bad debts

Limited growth and expansion opportunity

Reduced ability to secure early settlement or bulk purchase discounts from suppliers

03/05/2023r 8

So what have 43,000 UK businesses done?

· To manage their cash flow

· To support their growth

They have chosen a range of invoice finance solutions as an alternative to traditional funding such as overdrafts:

· Invoice discounting: to free up cash that’s trapped in unpaid invoices

· Factoring: remove the hassle of sales ledger administration

· Credit Protection: works alongside invoice discounting and factoring to lessen the impact of bad debt and customer insolvency

Information is classified as PUBLICSecurity may be required. Product fees may apply.

03/05/2023 9

What’s been the benefit?

Flexible funding that grows as the business’ sales grow

Business owners have more time and resource to focus on running the business

Protection against bad debt caused by the insolvency of customers

Businesses are supported if they already trade overseas, or if they’re looking to expand internationally

Businesses can access the funds they need to maximise opportunities and realise full potential

Freed up capital that would otherwise be tied up in unpaid invoices, so funds can be accessed more quickly

Information is classified as PUBLICInformation is classified as PUBLICSecurity may be required. Product fees may apply.

03/05/2023 10

How does Factoring work?

1 You invoice your customer as normal

2 Invoice details submittedusing FacFlow

3 We then advance you up to90% of the value of the invoicewithin 24 hours

4 Our experienced collectionsdepartment will then chasethe payment from yourcustomer

5 Your customer will then payus 100% of the value of theoutstanding invoice

6 We then give you the remainingvalue of the invoice less costs

90%

100%

Security may be required. Product fees may apply.

Information is classified as PUBLIC

03/05/2023 11

How does Invoice Discounting work?

1 You invoice your customer as normal

2 Invoice details submittedusing FacFlow

3 We then advance you up to90% of the value of the invoicewithin 24 hours

4 You run your sales ledgerand credit control

5 Your customer will then payus 100% of the value of theoutstanding invoice

6 We then give you the remainingvalue of the invoice less costs

90%

100%

Security may be required. Product fees may apply.

Information is classified as PUBLIC

03/05/2023 12

Security may be required. Product fees may apply.

How the invoice finance solutions work in practice

South West & Wales: ModuflexChallenge: Bristol manufacturer, was planning to open a second production facility in the city and needed funding to help this.

Solution: Invoice Discounting, Asset Finance and banking loan facilities.

Benefits: The Invoice Discounting facility has freed up funds, enabling Moduflex Limited to focus on growth and expansion without worrying about working capital.

Information is classified as PUBLIC

Thank youFor more information contact:John HughesBusiness Development Manager

M +44 (0)7917 087619E john.hughes@rbsif.co.uk

International TradeSimon King

BACKING YOUR AMBITION

GARETH OAKLEYManaging Director of SME Banking, Lloyds Bank

15

Our goal is to be the best bank for our clients. We’ll invest time in understanding your business,

and commit to building a strong local banking relationship

focused on helping you achieve your goals.

16

INTERNATIONALLY – OUR GLOBAL CONNECTIONS

COVERING 100 COUNTRIES

Countries

20

28

30

14

8

100

Continent

Africa

Americas

Asia

Europe

Middle East

Local Network Banks

Standard Bank, Standard Chartered and local regional banks

Scotiabank and local regional banks

ANZ, ICICI and Standard Chartered

Crédit Agricole and local regional banks

Leading local banks

OUR OFFERING

Extensive global connections through arrangements with key network banks.

In-country expertise and specialist knowledge of the local legislative environments.

Comprehensive guarantee solutions delivered with our key network banks.

Indicative and competitive up front pricing, with individual quotes provided upon request.

SUPPORTING INTERNATIONAL TRADE – EFFICIENT BANK SOLUTIONS

17

Our products and services are designed to make international trade as smooth as possible.

InformationOur online solutions provide information and fingertip control:

Lloyds Online Trade Services – view, monitor and manage your trade activity.

Arena – our comprehensive e-solution combining foreign exchange and money markets trading with economic insight.

TravelLink – order currency online for secure delivery to any UK based office.

SecurityTo help you trade more securely internationally, our services include:

Urgent and non-urgent payment mechanisms.

Documentary credits or collections.

Bonds and Guarantee services.

Single European Payment Area (SEPA) Direct Debits.

100% of transactions are processed in the UK

EfficiencyInternational accounts:

Euro accounts for businesses trading in Euros.

Foreign currency accounts for businesses making transactions in foreign currencies.

Currency loans for trading internationally.

PartnershipIn March 2015 Lloyds Bank was the first UK Bank to enter into a strategic partnership with UK Trade and Investment (UKTI).

This two year partnership will help UK businesses to export and to attract inward investment into the UK.

Its aim is to help UK exports reach £1trn by 2020.

It will increase the number of businesses helped by Lloyds Bank to trade internationally to 75,000 by 2017.

It is supporting efforts to double the UK’s stock of foreign investment by 2020.

18

OUR INTERNATIONAL PRODUCT CAPABILITIES – OVERVIEW

A simple and cost-effective way to enable payments between key network banks.

Key capabilities to keep your international trade running smoothly.

Documentary Collections

Letters of Credit

Bonds & Guarantees

Foreign Exchange (FX) Services

To support you to deal confidently with your suppliers or your buyers, secure in the knowledge that payment will be made if the transaction is carried out according to the terms, and is crucially supported by a bank guarantee of payment.

To support your ability to perform under a contract or meet payment obligations. They may also be used to underpin any bid to win new business.

A good way to help manage exchange rate risks and can be tailored to your specific needs.

To help you to improve your credit management and free up cash flow to support business growth.

A comprehensive range of finance solutions to help fund your working capital, whether buying or selling.

Invoice Financing

Trade Finance

To support your trade needs

WORKINGCAPITALMANAGEMENT

RISKMANAGEMENT

Stage 2. Tailor financial solutions to meet your needsThrough building the timeline, we can provide bespoke trade solutions for your needs in both risk management and working capital.

Stage 2Stage 1

19

TAILORED TRADE SOLUTIONS – EXAMPLE

Putting your needs first, our specialist teams will work with partner networks and use expert trade knowledge to deliver the right banking solutions.

-30 0 30 45 100

TenderingContract Signed

Goods ShippedSupplier Paid

Goods Arrive Invoice Sent

Invoice Paid

Letters of Credit

Trade FinanceInvoice

Financing

Letters of Credit

Bonds & Guarantees

Commercial events and timelines

Improve Working Capital

Mitigate Risk

Client needs Tailored solutions

Stage 1. Initial assessment to understand your needsBy conducting an initial timeline assessment, we get a full understanding of the critical commercial and geographic events in your trade cycle.

60 70

Documentary Collections

Documentary Collections

Illustrative purposes only

Foreign Exchange (FX) Services

20

IMPORTANT INFORMATION

This presentation is for information purposes only. It is intended as a summary only and whilst it contains some information about the potential risks and benefits of various products and services it should not of itself form the basis for any investment decision. Whilst Lloyds Bank plc has exercised reasonable care in preparing this presentation and any views or information expressed or presented are based on sources it believes to be accurate and reliable, no representation or warranty, express or implied, is made as to the accuracy, reliability or completeness of the information with other information which you have received from us, you should refer this to your Lloyds Bank relationship team for clarification.

If you have a hearing or speech impairment you can use Text Relay (previously Typetalk) or if you would prefer to use a Textphone, please feel free to call us on 0345 601 6909 (lines open 7am-8pm Monday-Friday and 9am-2pm Saturday).

Calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help improve our quality of service.

Please note any data sent via email is not secure and could be read by others.

Lloyds Bank plc registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Telephone 0207 626 1500.

Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under Registration Number 119278. We subscribe to The Lending Code; copies of the Code can be obtained from lendingstandardsboard.org.uk

Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS). Please note that due to FSCS and FOS eligibility criteria not all Business customers will be covered.

Invoice Finance, Asset Finance, Asset Based Lending and Debtor Protection facilities are provided by Lloyds Bank Commercial Finance. Payroll Finance facilities are provided by Cash Friday.  Lloyds Bank Commercial Finance and Cash Friday are trading names of Lloyds Bank Commercial Finance Ltd. Registered office: No.1, Brookhill Way, Banbury OX16 3EL. Registered in England and Wales no.733011. Lloyds Bank Commercial Finance Limited is part of Lloyds Banking Group and is authorised and regulated by the Financial Conduct Authority for activities relating to certain types of consumer credit which are regulated under the Consumer Credit Act 1974 and by the Financial Services and Markets Act 2000. We are not deposit takers and are not regulated by the Prudential Regulation Authority. The provision of credit or leasing services by us is subject to your meeting our Credit approval.  Please ensure that you only apply for credit or leasing services that you can comfortably afford.

Lloyds Bank Private Banking Limited. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2019697. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under number 122626.

Lloyds Bank plc is an introducer to Arthur J. Gallagher Insurance Brokers Limited who arrange and administer Lloyds Bank Business Insurance Services and source products from a panel of insurers.

Introductions will be made to selected companies within the Lloyds Banking Group. The Lloyds Banking Group includes companies using brands including Lloyds Bank, Halifax and Bank of Scotland and their associated companies. More information on the Lloyds Banking Group can be found at lloydsbankinggroup.com

21

Funding Circle

Jeremy CrinallBusiness Development Manager South West

Simple, affordable business loans

“At present the largest four banks account for over 80% of UK SMEs’ main banking relationships.

Many SMEs only approach the largest banks when seeking finance…in the case of the first time SME borrowers the rejection rate is 50%.”

Gov.uk, 2014

“ Over 50 per cent of business owners have used or considered using alternative finance such as peer-to-peer (P2P) lending, crowdfunding, invoice

finance, property finance and asset finance. ”

lsbf.org.uk, 2016

What's the difference?

Traditional lending

Market place lending

A simple model: Lenders can spread risk by lending small amounts to hundreds of businesses

Business loan

Loan parts

Loan parts

Loan parts

Loan parts

Loan parts

Loan parts

Loan parts

Loan parts

Loan parts

The global leader in marketplace lending for small businesses

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Q3 2014

Q4 2014

Q1 2015

Q2 2015

Q3 2015

Q4 2015

0

50

100

150

200

250

300

350

400

1 3 4 4 6 12 14 14 21 27 33 4355

6586

99122

175199 226

303

372

12 14 14 21 27 33 43 55 64 80 83111

150 167 170222

248

0.7745.92744316.701954

11.343063

24.77959131.841632

56.000971

81.340363

106

18

UK US CE Total

August 2010Founding of

Funding Circle

October 2015Launch in Germany, Spain &

Netherlands (acquisition)

October 2013Launch in the US

(acquisition)

Originated over $1.85 BN to thousands of small businesses since 2010

• £531 million lent in the UK in 2015 giving 90% YoY growth• # 1 player in the UK with ~50% market share• c. 500 employees globally

March 2015Series E round with $150M funding from DST, Temasek, Blackrock, Baillie Gifford,

Sands Capital

FC Q

uarte

rly N

ew L

endi

ng ($

m)2

In Q1 the Funding Circle platform was the 5th largest net lender to SMEs in the UK

Q1 Net lending to UK SMEs£m

United Trust Bank

Santander

OneSavings Bank

Yorkshire Building Society

Arbuthnot Latham

Funding Circle

Close Brothers

Metro Bank

Aldermore

Lloyds Banking Group

22

27

37

38

88

96

111

125

157

232

Source: Bank of England - Funding for Lending Scheme Extension

• We are not a Bank - Funding Circle do not lend our own money

• Funding Circle are an online market-place – where investors lend directly to SME businesses

• £147m lent to SME’s in South West (May 2016)

• £24.9m Lent to SME’s in Cornwall since 2010 increase from £5.2m in May 2015 (5 X increase in 12 months)

• Liquidity depends on both the ‘Fractional Retail’ and ‘Institutional Whole Loan’ market-place

• Institutional investors agreed to invest £127m & $434m in our ‘Whole Loan’ market-place – UK & US & CE

Market-place lending

• The Government lent an initial tranche of £20m through Funding Circle in 2013

• A further £40m has been committed in late 2014

• Forms part of the Business Finance Partnership scheme (British Business Bank)

• 10% of every loan on the platform is financed by Government

The Government’s commitment to Funding Circle

Unsecured Loan

£5k - £250kSuitable for a wide range

of purposes6 months to 5 year termFixed interest rates from

6% Arrangement fees between

3-4% of loan amountNo ERP’s

Secured Loan

£150k - £1m All asset security

agreement Charge on specific

properties or assets

Types of borrowing

£150k-£3m Development Commercial Investment Fixed interest rates No early

repayment fees Circa 8% pa.

Property Finance

Asset finance

£20k - £1m Suitable for a wide

range of hard assets Hire purchase Flexible on LTV–100%

considered Individual deals up to

£250k, credit lines of up to £1m

Any business, any purpose……

Loan Purpose

Working capitalExpansion/growth Cap-italAsset purchaseOtherResidential property developmentAsset financeRefinancing a loanTax paymentTax liabilityAnnual purchaseCommercial mortgage

Sector

Automotive FinanceLeisure & Hospitality Education & TrainingI.T and Telecommuni-cations

Agriculture

Consumer Services HealthcareManufacturing and Engineering

Other

Professional and Business Support

Property and Con-struction

Retail Transport and LogisticsWholesale

Minimum FC criteria includes

Companies:

History:

Directors:

Accounts:

Ownership:

Guarantees: Loan supported by PG

Beneficial ownership in UK

Min turnover £50,000, Upward growth trend and no consecutive losses.

Trading for 2+ years with at least 2 years of filed accounts

A good credit history – no CCJs, CVAs, CVLs or liquidated companies within 3-4 years. UK resident.

Limited companies, limited liability partnerships & non limited

Thank you for listening

Jeremy CrinallBusiness Development Managerjeremy.crinall@fundingcircle.com0203 667 2250

Secured LendingDavid Brown – Managing Director

38

We look at things differently

What do we do?

39

We are an ENABLER

• Simple

• Mobilising money in the countryside

• Enabling people to utilise property assets

• People Power

• Fair deal

• Help local community

40

Secured Lending• All loans secured against land or property.

• Not your primary residence (or a property in which you

reside in more than 40%).

• 60% Loan to Value

What We Offer Lenders

The ability to support and invest in their local community whilst receiving a competitive interest rate

* Based on the amount lost by a lender (excludes temporary delays in interest repayments)

• Minimum lending value of £25,000

• Secured return of 6.5% paid monthly

• Zero defaults to date*

• Lending can be to a specific borrower as a sole Lender, or as part of a ‘Lender Pool’

What We Offer Businesses

The ability to utilise property assets to help business grow or boost working capital

• Interest-only repayment at 6.5%

• All lending secured against property

• Offer up to 60% LTV

• Loans of 3 months - 5 years

• We take a holistic view: choosy but fair

43

Best Lending Platform for SMEs• Secured• Straightforward• Fast Enabler• Attractive rate 6.5%• People business• Local focus• Award winning

Proudly Cornish

• £93m invested in the South West.

• Provide a way to keep local money local• Provided funding to kick-start major Cornish projects

i.e. Truro development project resulting in Stadium for Cornwall.

• Head Office in Launceston.

* Source: BRDC SME Finance Monitor Q3 2015

www.folk2folk.comTwitter.com/Folk2FolkUKFacebook.com/folk2folk

Linkedin.com/company/folk2folk

INTRODUCTION TO GROWTH CAPITAL

Paul Julian

Relationship Director

GROWTH CAPITAL HELPS FILL THE FUNDING GAP

COST EFFICIENT ALTERNATIVE TO EQUITY / UNIQUE BANK PRODUCT

Debt product

Not equity risk

Interest only loan

Preserves cash within the business

Cash flow lending

Not limited to tangible security

Structured loan

Flexible

Low cost alternative

Hands on approach

Experienced team

Strong relationship

All banking Santander

Unique bank product

OUR BROAD CRITERIA

Privately owned business, annual sales

typically £2m - £50m

Growing businesses that are profitable and

cash generative

Proven management team. Good finance

function

Investment in opex / capex / bolt-ons. Proven product or service to roll out

At least 3 years of financial history

A STRUCTURED PRODUCT

3.0% arrangement fee

2.5% commitment fee

L+5% plus 5% rolled up

5 year maturity

Comprehensive security package

Full banking

No change of control

No annual fees

No prepayment fees

No penalty for early prepayment

External due diligence

No automatic requirement for PGs

Integrated Financial Model

Restrictions on use of cash / distributions

No further indebtedness

Subordination of other loans

Financial covenants

Quarterly testing

Monthly MI

£1.5m Growth Capital

Childcare and education

60 new jobs

September 2014

£1.35m Growth Capital

Vibration monitoring

62 new jobs

July 2014

£1m Growth Capital

Engineering consultancy

95 new jobs

July 2014

£0.75m Growth Capital

Cloud brokerage services

35 new jobs

May 2014

£1.6m of Facilities

Bakeries

45 new jobs

December 2014

£1.8m of Facilities

Services

43 new jobs

September 2014

£2.4m of Facilities

Supplier & Manufacturer

19 new jobs

December 2014

SOME RECENT SMEs WE HAVE SUPPORTED….

£6.0m of Facilities

Trampoline parks

February 2016

£5.8m of Facilities

Fulfilment & global delivery services

October 2015

£10.9m of Facilities

Clothing retailer

400 new jobs

£0.8m of Facilities

Sea salt retailer

25 new jobs

£4.2m of Facilities

Taxi service operator

30 new jobs

March 2015

August 2015 August 2015 April 2015

£undisclosed

Credit reporting agency

£0.5m Growth Capital

Healthy fast food chain

40 new jobs

October 2014

Breakthrough:

Helping Your Business Go Further

Breakthrough

Knowledge

Meet British business

legends face to face and

soak up their expertise at

exclusive events.

Breakthrough

Talent

Support to find and keep

the best talent, including

access to 2,000 subsidised

graduate interns.

Breakthrough

International

Connect with the pick of

190,000 international

contacts who can help you

break into new markets.

Breakthrough

Connections

Keep one step ahead by

joining our exclusive

network of entrepreneurs

and business leaders.

Breakthrough Finance

Funding beyond the

ordinary, including a

unique financing solution to

fuel your growth ambitions

CUSTOMER ADVOCACY

“It is mind-blowing that a bank would be that

entrepreneurial and supportive. They are a

breath of fresh air.”

Paul Bradford, Southern Communications, CEO

“Santander gets close to you in terms of

understanding the business and our Relationship

Director really understands the nuts and bolts of

what we’re doing and the issues we have.”

Mike Bishop, Finance Director and CoFounder, YourVets

“I think the Growth Capital investment is a really

well thought-out product. It allows us to draw

down funds as the company grows without having

to keep going back to the bank.”

Tim Hobbs, CFO, Vital Ingredient

“Before the deal we had 35 employees but only

one sales person. Now we have the resources to

grow the team and hire people to manage direct

sales, partners and channels.”

Mat Atkinson, CEO, ProofHQ

“It’s fascinating to see that entrepreneurship is

a genuine objective of Santander and not just words.”

Geoff van Sonsbeeck, co-founder,Isabella Oliver

“The Santander team got to know us individually

and we felt the approach of the team was

sensible and pragmatic.”

Graeme Scott, CEO, Bertram Nursery Group

“The expertise of the people who came in from

Santander was completely different from the

other banks... They could see the frustrations of a

small business. They also understood that a small

business needs time to do things.”

Andy Hill, CEO, I Like Music

DISCLAIMER

The information and opinions in this document have been compiled by Santander Corporate

Banking in good faith from sources believed to be reliable. The information and opinions

contained in this document are published for the assistance of the recipients but they should

not be relied upon as authoritative or definitive and should not be taken into account in the

exercise of judgements by any recipient. Distribution of this document does not oblige us to

enter into any transaction. Any offer would be made at a later date and subject to contract,

satisfactory documentation and market conditions. Nothing in this document constitutes

investment, legal, tax or accounting advice and we recommend you do not make a decision

based on this information without first taking the appropriate advice. This document is

intended for recipient only, should not be disclosed to retail clients, and should not be

distributed to others or replicated without the consent of Santander Corporate Banking.

Santander Corporate Banking is the brand name of Santander UK plc, Abbey National

Treasury Services plc (which also uses the brand name of Santander Global Banking and

Markets) and Santander Asset Finance plc, all (with the exception of Santander Asset

Finance plc) authorised and regulated by the Financial Services Authority, except in respect

of consumer credit products which are regulated by the Office of Fair Trading. FSA

registration numbers: 106054, 146003 and 423530 respectively. Registered offices: 2

Triton Square, Regent’s Place, London NW1 3AN and Carlton Park, Narborough LE19 0AL.

Company numbers: 2294747, 2338548 and 1533123 respectively. Registered in England.

Santander and the flame logo are registered trademarks.

Growth Capital Investors

Introduction to BGF

Ned Dorbin10 May 2016

Growth Capital Investors

BGF is an investment firm that provides growth capital of £2m - £10m to UK businesses with turnover of > £5m.

Who we are. Funding for growth and equity release

Investment of £2m – £10m for a minority stake

Long-term and patient capital, no forced exit

Access to huge network and support

Fast and focused investment process

109

£20m

88£5.5m£2.6bn

£700m 19,300

11

£100m

8

£17m

£15m

companies backed by BGF

average turnover of companies at time of investment

experienced non-executive chairmen and directors introduced to investee

companies

average first investment

combined turnover of all companies in portfolio

Total amount committed

people employed across the portfolio

different sectors

Amount of follow-on investment

offices across the UK

the most invested in a single company

Realised gains (from exits)

(£250m in 2015)

Growth Capital Investors58

Growth Capital Investors

Investment of £2m-£10m

Cash-in: to support long term growth

Cash-out: for existing shareholders

Equity stake of up to 40%

Always a minority partner – you retain control

No closed fund pressures Patient capital. No drag rights, no forced exit

What we offer. Working alongside the banks, BGF provides growth capital in a way that meets companies’ needs.

Growth Capital Investors

Flexible structures – equity / loan notes

Meets the needs of the company and shareholder

Fair legal approach Less onerous investor legal protections

Fast and focused investment process Minimises disruption and fees

More than money Access to impressive network and support

What we offer. Working alongside the banks, BGF provides growth capital in a way that meets companies’ needs.

Growth Capital Investors61

BGF contacts in the South West

James AustinInvestor

james.austin@bgf.co.uk07872 819093

Alex GarfittInvestor

alex.garfitt@bgf.co.uk07770 582021

Greg NormanInvestor

greg.norman@bgf.co.uk07557 747302

Edwin DaviesInvestor

edwin.davies@bgf.co.uk07880 384983

Paul OldhamRegional Director

paul.oldham@bgf.co.uk07887 657697

Sarah LedwidgeInvestor

sarah.ledwidge@bgf.co.uk07557 232034

Dan TapsonInvestor

dan.tapson@bgf.co.uk07964 904443

Ned DorbinInvestor

ned.dorbin@bgf.co.uk07800 682195

Alex SnodgrassInvestor

Alex.snodgrass@bgf.co.uk07766 781293 

Growing your business on the public equity markets

Claire DorrianLondon Stock Exchange

10th May 2016

63

A Choice of Routes to Market

Private Equity

Venture Capital

Seed Capital

Business Angels

Friends Family

Start - Up Early Stage Expansion Consolidation & further capital raising

Diversification of investors, M&A and International Expansion

Concept & seed stage

Fund

ing

requ

irem

ent

£500k

£1m

£100k

£50k

£150m

£1bn

Strategic consideration

64

AIM - A market for smaller companies

Market Cap Profile of AIM Companies

£0 - 2m £2 - 5m £5 - 10m £10 - 25m £25 - 50m £50 - 100m £100 - 250m £250 - 500m £500 - 1bn £1bn+

104

124 130

191

155

119106

45

175

Source: London Stock Exchange statistics, 31 March 2016*23 companies either suspended or undetermined value

65

Diverse Sector Representation

*ICB industry classification

Oil & Gas; 113

Basic Materials, 156

Industrials; 173

Consumer Goods; 59Health Care, 86

Consumer Services; 109

Telecommunications; 15

Utilities; 13

Financials; 182

Technology; 114

Source: London Stock Exchange statistics, 31 March 2016*23 companies either suspended or undetermined value

The sector diversity of AIM has contributed to its success and robustness through sector and economic cycles.

113Oil &Gas

156Basic Materials

173Industrials

59Consumer Goods

86Health Care

109Consumer Services

15Telecom

13Utilities

182Financials

114Technology

66

AIM Admissions Activity

Source: London Stock Exchange statistics, 31March 2016*23 companies either suspended or undetermined value

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

0

100

200

300

400

500

600

123145

10775

102

277

177160 162

355

519

462

284

114

36

102 9071

99118

61

15

Series3 International UK

The number of admissions has reduced post financial crisis, as other private sources of capital emerge and companies take longer to prepare for IPO. However, the median fundraising amount at admission has doubled.

67

Fundraising activity on AIM

Source: London Stock Exchange statistics, 31 March 2016*23 companies either suspended or undetermined value

19951996

19971998

19992000

20012002

20032004

20052006

20072008

20092010

20112012

20132014

2015

2016 YTD

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Further New

AIM investors support companies at IPO and throughout their life on market, as evident from the £55 billion raised through further fundraisings since 1995, compared to £41 billion at admission.

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Benefits for companies

6868

Diverse & deep pool of capital

Strong support from institutions

Funding for acquisitions & expansion to new markets

Access to capital Wide support network

Nominated advisers

Accountants

Lawyers

Banks/Brokers

Analysts

Financial PR / IR

Media

Profile

Visibility

Bargaining power with customers & supplier

Access to incremental research coverage

Marketability of stock

Global peer group

Balanced regulatory approach

Disclosure requirements tailored to growing companies

Based on EU FSAP Directives & UK Prescribed Market Regime

Local & International investor confidence in regulatory framework

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Prepare Ahead

Early Investor Engagement is

Key

Early preparation is critical - very hard to accelerate an IPO process Increasingly common practice to meet investors early (12 months ahead) – therefore need to work on key

financials, KPIs for the business, equity story well in advance

The practice of “early look” engagement with a number of the key investors has been very valuable: Feedback for the Company and owners at an early stage on the business model, the management team

and likely valuation parameters Investors get an opportunity to build a rapport with management at this early stage, enhancing their likely

participation at the IPO

Demand Patterns are Shifting

Maximising demand means understanding the dynamics within the investor community: Long only vs hedge funds UK vs. Europe vs. US vs. Asia Retail participation

Consider complementary distribution platforms in IPO syndicates to tap all of these pockets

Current Investor Appetite

London - Lessons from Recent IPOs

Recent ITFs indicate broad interest across sectors (tech, fintech, industrials, support services) With plenty of potential IPO supply into 2016, investors will continue to be selective and differentiation of equity

story has become even more important – size, simplicity of story and valuations matter! Seeing more structures to de-risk IPO execution - shortening timetables, stealth marketing (no intention to float)

anchor / cornerstone orders, reverse into shells (e.g. BCA, Iglo) etc.

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ELITE – a business support programme for private companies

78 companies have joined the UK programme since April 2014 ranging in size and sector.

£1bn + Aggregate revenue

9,700Aggregate employees

38Locations

19Sub sectors

Industrial Goods and Services

Technology

Media Retail

Telecomms

Oil and GasTravel & Leisure

Food & BeverageHealthcare

10 companies 20 companies

7 companies 12 companies

2 companies

3 companies 2 companies

12 companies 2 companies

Fintech / Financial Services

4 companies

Chemicals

1 company

Property

2 companies

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A Structured Engagement Over 3 Phases

Delivered in partnership with Imperial College Business School in the UK, ELITE will enhance the growth prospects of member companies through a unique three-part package.

Continued access to the entire ELITE community across Europe via the online platform

PHASE 1 Stimulates company review

A comprehensive programme, delivered with entrepreneurs, investors and advisers, to stimulate organisational review and change.

Readiness Survey Diagnostic Interviews

PHASE 2 Plan for change

Practical and technical workshops designed to reflect on company-specific issues and plan for change with the support of the ELITE Partner network.

PHASE 3Capitalise on the benefits

Utilise the ELITE community and learnings from the first two phases to access new business opportunities and consider funding options and processes to explore in more detail.

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A Vibrant Ecosystem Across Europe

+ Others+ Others

+ Others+ Others

+ Others

150+ELITE Partners

100+ELITE Investors

380+ELITE companies

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LSE’s Equity Primary Markets Team

Global Head of Primary Markets John Millar +44 (0)20 7797 1586 jmillar@lseg.com

Relationship ManagementRegion Telephone Email

UK Marcus StuttardTom AttenboroughMark FahyClaire DorrianJames Clark

+44 20 7797 3364+44 20 7797 3747+44 20 7797 6396+44 20 7797 2074 +44 20 7797 1863

mstuttard@lseg.comtattenborough@lseg.commfahy@lseg.comcdorrian@lseg.comjclark@lseg.com

Russia, CIS, Asia – Pacific Jon Edwards (Beijing)Ayuna Nechaeva (London)Yi Xie (HK)

+44 20 7797 1599+44 20 7797 4386+852 3555 6395

jedwards@lseg.comanechaeva@lseg.comyxie@lseg.com

India, Middle East, Africa Ibukun AdebayoJasmine Arora

+44 207 797 1085+44 20 7797 1868

IAdebayo@lseg.comjarora@lseg.com

Americas Sarah E Baker (New York)Chris Mayo

+1 917 582 1815+44 20 7797 3134

sebaker@lseg.comcmayo@lseg.com

Continental Europe Luca Peyrano (Milan)Axel Kalinowski

+39 0 272 426291+44 20 7797 4108

lpeyrano@lseg.comakalinowski@lseg.com

Research and Product Development Market Telephone Email

Main Market, AIM, PSM, SFM, ELITE and ATT Only

Darko HajdukovicUmerah AkramSarah J Baker Emma TitmusLouis DaviesShengYuan WuHetal Patel

+44 20 7797 3306+44 20 7797 4707+44 20 7797 1542+44 20 7797 1464+44 20 7797 1633+44 20 7797 4096+44 20 7797 1043

dhajdukovic@lseg.comuakram@lseg.comsbaker2@lseg.cometitmus@lseg.comldavies@lseg.comswu@lseg.comhpatel2@lseg.com

For further information refer to www.lseg.com

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This document has been compiled by the London Stock Exchange plc (the “Exchange”). The Exchange has attempted to ensure that the information in this document is accurate, however the information is provided “AS IS” and on an “AS AVAILABLE” basis and may not be accurate or up to date. The Exchange does not guarantee the accuracy, timeliness, completeness, performance or fitness for a particular purpose of the document or any of the information in it. The Exchange is not responsible for any third party content which is set out in this document. No responsibility is accepted by or on behalf of the Exchange for any errors, omissions, or inaccurate information in the document.No action should be taken or omitted to be taken in reliance upon information in this document. The Exchange accepts no liability for the results of any action taken on the basis of the information in this document. All implied warranties, including but not limited to the implied warranties of satisfactory quality, fitness for a particular purpose, non-infringement, compatibility, security and accuracy are excluded by the Exchange to the extent that they may be excluded as a matter of law. Further, the Exchange does not warrant that the document is error free or that any defects will be corrected.To the extent permitted by applicable law, the Exchange expressly disclaims all liability howsoever arising whether in contract, tort (or deceit) or otherwise (including, but not limited to, liability for any negligent act or omissions) to any person in respect of any claims or losses of any nature, arising directly or indirectly from: (i) anything done or the consequences of anything done or omitted to be done wholly or partly in reliance upon the whole or any part of the contents of this document, and (ii) the use of any data or materials in this document.Information in this document is not offered as advice on any particular matter and must not be treated as a substitute for specific advice. In particular information in the document does not constitute professional, financial or investment advice and must not be used as a basis for making investment decisions and is in no way intended, directly or indirectly, as an attempt to market or sell any type of financial instrument. Advice from a suitably qualified professional should always be sought in relation to any particular matter or circumstances.The contents of this document do not constitute an invitation to invest in shares of the Exchange, or constitute or form a part of any offer for the sale or subscription of, or any invitation to offer to buy or subscribe for, any securities or other financial instruments, nor should it or any part of it form the basis of, or be relied upon in any connection with any contract or commitment whatsoever.London Stock Exchange and the London Stock Exchange coat of arms device are registered trade marks of London Stock Exchange plc. Other logos, organisations and company names referred to may be the trade marks of their respective owners.

© May 2016London Stock Exchange plc

10 Paternoster SquareLondon EC4M 7LS

Telephone +44 (0)20 7797 1000www.lseg.com

Legal Disclaimer

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DAVE LEAMAN

BUSINESS SUPPORT

76

A FULLY FUNDED INVESTMENT READINESS AND GROWTH SERVICE FOR AMBITIOUS

BUSINESSES

ACROSS THE SOUTH WEST

77

WHO DO WE SUPPORT?

S.M.E. BUSINESSES

ANY AGE

WHO HAVE AMBITIONS TO GROW

78

• Financial appraisal• Cashflow forecast• Profit & Loss forecast• Business plans• Identify appropriate funding sources

• Funding application assistance• Investor presentation/pitches

ACCESS TO FINANCE EXPERTS

79

ACCESS TO SALES/MARKETING EXPERTS• Sales & Marketing Diagnostic• Access to your Market• Customer Needs• Value Proposition• Marketing Strategy• Sales Pipeline

80

DELIVERED VIA…Workshops / 1:1s / Masterclasses / Drop-in sessions

Finance

Help you get the money you need

to take your company forward

Sales & Marketing

Skills & Knowledge

Create, develop and strengthen marketing and sales strategy

Develop world-class skills and

knowledge

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• Already supporting: 1,103 clients

• Already raised: £3.2million

• Jobs created/safeguarded: 120

Success so far this year – Q1 2016…

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- Visit our stand

- getsetforgrowth.com

- Tel 0800 587 7707

GET IN TOUCH

pkf-francisclark.co.uk

BreakSession 3 start time

11.40am