Client case study
APS Group is a major supplier of fresh produce to UK multiple retailers including Tesco and Iceland. The Group is headquartered in Middlewich and operates a total of 43 acres of state-of-the-art glasshouse in Cheshire and Kent in addition to 14 acres in outsourced growing capacity. It also operates three specialist pack houses dealing with both imported and UK grown produce. Its activities are as follows:
- Sourcing of fresh produce from UK and overseas
- UK growing of premium tomato varieties
- Packing and distribution of fresh produce
The business has been in operation since the 1940s but the last decade has seen an unprecedented period of growth with revenues growing from £2m in 2004 to around £50m for 2013 and over £100m today. As a result the company featured in the ‘Sunday Times Top 100’ which lists the fastest growing UK businesses. APS also has industry leading green credentials, operating a unique Anaerobic Digestion plant and pioneering the use of Combined Heat and Power (“CHP”) facilities, which provide glasshouse heating and CO2 to enhance the growing environment. Energy costs are mitigated by exporting electricity to the grid.
Rickitt Mitchell has been providing strategic advice to APS Group since 2011 with the aim of helping management generate shareholder value during a time of significant evolution in the Group’s operations.
We have helped replace a complex legacy corporate structure with one suitable for attracting external investment, whilst maintaining an acceptable security profile for the existing bank lender. Allied with the corporate restructuring the Group has redefined its management structures to provide greater control of business activities and optimisation of reporting lines.
Investment in infrastructure
The Group has an on-going programme to expand its production capacity. It has increased its production area from 12 acres to 43 acres since 2010 and achieved a step change in scale with the acquisition of Wight Salads Limited. The total investment in infrastructure since 2010 has been nearly £20m, with a significant proportion of this raised from new bank facilities. In order to support the energy requirements of the Group’s expanding production facilities in Kent the construction of a major CHP facility is underway. This £10m programme will take total CHP power output at this site to 15MW, making it one of the industry’s largest CHP operators.
“We have formed a strong partnership with Rickitt Mitchell. Since their involvement Paul and Neil have become trusted advisors to the Group, providing important strategic financial and commercial advice during a period marked by significant challenges and unprecedented growth.”Mark Pearson | MD | APS Group
Rickitt Mitchell has helped APS optimise its corporate structure to enable external investment. We have provided continued advice in support of the client's on-going programme of high value capital expenditure and corporate acquisition. We continue to provide fundraising support and strategic advice to help management develop financial strategy to support future development goals and enhance shareholder value.
The full impact of the expansion carried out to date is forecast to deliver significant improvements to profitability in the coming years. Management aims to drive further value generation with a number of programmes including:
• Investment in an additional 14 acres of glasshouse
• Significant upgrades enabling winter production under artificial lighting
• Establishment of an integrated packing and distribution facility
• Major upgrade of the Cheshire CHP facility increasing capacity from 1.7MW to 3.3MW
• Further optimisation of the Group’s financial structure
• Acquisitions of complementary businesses
£2m Revenue 2004
£50m Revenue 2013
£20m Investment in Infrastructure
£10m Investment in CHP programme