How a more flexible approach to finance helped Bromford Iron & Steel improve their cash flow

 

Bromford Iron & Steel case study transcript

Andrew Rich, Operations Director at Bromford Iron & Steel

Everything in Bromford is traditional and has history; the same as the culture. We’ve been on the site making steel since 1610. It’s a very, very traditional process – hot rolling of steel from billets to a finished section. These businesses, there aren’t many left anymore. Obviously we’re going and our ambition is to keep Bromford going and to keep the traditional hot rolling process in the Black Country for as long as possible.

Heather Palfrey, Commercial Director at Bromford Iron & Steel

Steel is a passion. At Bromford we’ve got that passion. Our guys here, if you cut them through, you’ll see Bromford Iron and Steel through them, they’re like sticks of rock. I’ve worked for Bromford Iron & Steel now for 26 years and in that time the steel industry dynamics has changed and Bromford has had to adapt. We had to decide whether we wanted to stay in a volume market or go for a niche market so we changed the business. What we do now is offer the non-standard sizes, non-standard tolerances, non-standard lengths and bespoke products.

Martyn Coles, Financial Director at Bromford Iron & Steel

The previous invoice discounter exited the market wholesale. We held a beauty parade of up to seven people, whittling that down to four and at the end of the day, Close Brothers were selected by providing the best offer. Invoice discounting helps the business by giving us consistent streams of money into the business. We’re not having to make credit control calls, waiting for a customer who may have promised money on a particular date and it comes in a week later. I know those funds are going to be there 24 hours later so it makes planning the cashflow a lot easier.

With the traditional banks it tends to be very fixed rules, not taking into account the day to day requirements of the business. I found Close Brothers to be much more real world. If I’ve got a small issue, I can ring them up, ask them for a little bit of more funding for a few days and they can give me a bit more flexibility. Close Brothers did offer us additional finance to the invoice discounting which also helped with the financing of the business.

Andrew Rich, Operations Director at Bromford Iron & Steel

So we’ve invested £30,000 in one project so that we get feedback from the rolls. So, we’re applying technology to a traditional process. Because we are bespoke, we are different and our plant is the only one like it, we need people on site to learn the Bromford way of manufacture. There’s a skills shortage in this industry. To go and find people to come straight in and do a job is not easy so we’re going to develop, with the help of Close Brothers, our own people.

Martyn Coles, Financial Director at Bromford Iron & Steel

I find the contact system with Close Brothers very good. I literally have to pick up the phone, have a discussion and Close Brothers will help me out and that has been a great help to us over the last twelve months. I think the future for Bromford, now, is secure. We’ve been through a very difficult period. Knowing that Close Brothers’ support with short term difficulties has been there, has given me a lot more confidence to be able to say that Bromford Iron & Steel will continue well into the future.