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Case Studies, Urgent Funding

Success Story for Publishing Client

If you read The Times or the Sunday Times you will be aware of our client’s work. They offer premium, independent publishing of special interest reports covering a wide range of topics from Fintech, IT, Retail, Talent Management, Healthcare & AI to name a few.

Our client approached us after a new free monthly magazine venture failed to meet advertising revenue targets – they were experiencing losses and needed a rapid injection of funds to aid cash-flow. We went to work seeking an investor who could not only provide the funding needed but also take an active role in the business. A number of potential investors, including a boutique private equity firm, expressed interest and met the CEO. The client was in a difficult position, exhibiting all the distress symptoms of a classic turnaround – HMRC demanding immediate payments and a large trade creditor threatening to cease all business. A CVA or pre-pack was the preferred route forward to many.

Our priority was to support the CEO in relieving the immediate pressure before moving forward with the equity investment transaction. We negotiated payment plans with HMRC and the largest trade creditor. With daylight ahead of us, we also secured a new alternative finance provider with better terms and a higher facility.

With all immediate distress items addressed, we went back to have further meetings with the investors – a small cohort of proven c-suite operators partnered with a special situations family office. This blend of operational expertise, and an ability to successfully structure and transact a complex deal, has ensured that the client has benefitted from experienced strategic input and critical operational rigour.

All parties were delighted to conclude the transaction with an investment of £600,000 of new funding, a beefed-up board and a re-set of management duties and plans to move forwards with the business.

The core publishing business has continued to grow and improve its operating profit, a separate agency business is now delivering strong growth and in 2021 the company made its first acquisition. Staff numbers across the group are over 100, with a very solid leadership team, supported by the investor board.

With the focus on driving the business forwards, it’s a pleasure for us to report back on our client turned fortunes. Revenues have grown from £6.7m £12m, with the respective operating profit rising from £409k to £2m, since 2018.

The group is now expanding internationally and is forecasting strong growth for the next few years.

a note from the client…

Having dealt with the critical issues of threats from our client’s major creditor and HMRC, and delivered a healthy funding line with a progressive ABL, we avoided the need for a formal insolvency procedure – crucial in itself to maintain the value in the business. We then delivered the final piece of the jigsaw – private investment with serious added value management skills from the incoming investors.

Ash Hussain, B&Y Associate
Special Interest Publishing

I was immediately interested when I heard about the company and enthused by the young, dynamic management team.  It’s a people and creative business and those people gave me a strongly positive feeling.  I bought in alongside great colleagues from different backgrounds and we work closely with an expanded team who are challenging norms and pushing boundaries.  Thanks to Beer & Young for introducing this exciting and promising opportunity.

“We are an active small group of investors looking for exciting and well-presented investment opportunities. We feel we bring more than capital and like to roll up our sleeves in the early months, particularly when the business is stressed or in distress.

“We’ve worked with Beer & Young for many years now and are always impressed with the quality of the projects they put forward and crucially the sensible advice they give to their clients when undertaking an equity raise.

RP - Chairman and Investor
Special Interest Publishing

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