Manufacturing firm races to success with F1 tie up
Small business turns to Bibby Financial Services to manage seasonal staff boom
- Business: Codem Composites
- Location: Sawtry, Cambridgeshire
- Sector: Manufacturing for aerospace and automotive industries
- Segment: Flexidraft
- Funding: £80,000
- Turnover: £1.3 million
When the Grand Prix season starts revving-up each January, Kevin Doherty, owner and director of Codem Composites knows that he is in for a busy quarter. This Cambridgeshire business manufactures the light-weight carbon fibre parts needed for Formula One racing cars, supplying the likes of Mercedes and Force India. Between Christmas and Easter each year, his team can grow from 18 to 24 as they support the racing teams with building their new cars for the season ahead. “Mercedes won all but two of their Grand Prix’ this season,” Kevin said. “Nico Rosberg is leading the world championship and Lewis Hamilton is currently second. I like to think that we all play a part in their success.”
Kevin set up Codem Composites in 2009. He spotted a gap in the market which was to offer the high technical ability of larger composite manufacturing firms, but with the nimble agility of an SME. He has since grown his business to achieve a £1.3 million turnover and has landed other significant contracts in the motorsport and aerospace industries. Other major projects have included producing the lightweight panels for Air Canada’s 1st Class departure lounge at Heathrow Terminal 2, and lightweight satellite dishes for outside broadcast vans used to provide live pictures of sports events such as the World Cup, the Olympics and major news stories from around the world.
“Our industry has been quite well insulated from the recession because the demand for products made from lightweight, strong materials is growing exponentially,” Kevin said. “We stood out from our competitors because of our highly skilled workforce, who could do it slicker and quicker.”
Since inception, Codem Composites has maintained a steady, organic growth until last year, when it ramped up to around 20 per cent a year. In 2012, he set up a sister company CC Patterns, which provides the complimentary facility of machining work for the composite parts. This meant that the two companies combined now offer a complete turnkey solution to its customer base, the provision of this service has resulted in an accelerated growth for both businesses.
Kevin turned to Bibby Financial Services upon starting CC Patterns, opting for Flexidraft, which provides a steady flow of working capital.“We had the funds to set up CC Patterns, but what we needed was a safety net. We didn’t want to go down the loan route; we needed an overdraft just in case the growth profile was different to that which we’d planned.” Two years on, this flexible form of finance is at its most useful during the F1 pre-season peak period. During this time extra contract labour is needed and employees are required work overtime meaning that the company’s weekly wage bill can almost double.
Kevin said: “At the end of the week, people need to be paid. You can’t expect them wait because your customers’ invoices aren’t due for payment.” Having Flexidraft in place allows the business flexibility to take on additional projects at short notice in the summer months if they spot an opportunity and need to invest in additional equipment or specialist materials. It also means they can continue to invest in expanding the business’s apprenticeship programme and attending careers fairs to attract the best young talent. Looking ahead, Kevin expects to continue growing the business at 20 per cent a year, meaning that turnover will have doubled by 2018. He plans to continue using Flexidraft to help support any spikes in demand. "Flexidraft is what the banks should be doing,” he said. “I didn’t even consider going down the bank lending route. I knew with Bibby Financial Services that I’d get a conversation with a real person and a straight yes or no. It’s not about running it through a computer or ticking a box. It’s about a real person understanding the potential of your business.”
Paul Cunningham, Managing Director for Bibby Financial Services in the South East, said: “Businesses can often find that they need funding on standby to smooth out spikes in demand during peak periods. This is where products like Flexidraft can offer a cost-effective solution for firms when they need it, but no charges when they don’t.
“Codem Composites is a great example of a small business that has been able to grow at a significant, yet steady rate. It has been nimble enough to seize opportunities and we are pleased that we’ve been able to support this growth.”