The North East’s largest motor group, Benfield, is on the verge of further expansion after securing a £40m funding package to support a three-year capital investment programme.
The fast-growing Newcastle company, already one the biggest in the UK motor retailing market, intends to add three more dealerships to its 34-strong network throughout the North East, Yorkshire and the North West.
These would comprise a Ford outlet in Sunderland, due to open in July 2014; a Newcastle Audi dealership, set to open in July of the same year; and a Sunderland Audi dealership, destined for a 2015 launch.
The funding package, which Benfield hopes will create local employment opportunities, consists of a joint £23.5m Revolving Credit Facility from RBS CIB and Barclays, as well as £16.5m from RBS, including £7m from specialist asset finance division, Lombard.
Finance director of Benfield Motor Group, Gerard Murray, said: “The funding package will allow us to execute our significant capital investment programme to provide first-class motor retail facilities and deliver an outstanding retail experience to our growing number of customers.
“We have worked with RBS for 40 years now and have always valued the bank’s advice and, along with the significant input and advice from Barclays, look forward to a strong and even more successful future for the business.”
Benfield Motor Group was founded in Newcastle in 1957 and now employes more than 1,500 people. The latest investment comes after a strong period for the group, which saw turnover rise 30% in 2012 to £541m, reflecting the results of several significant acquisitions and other moves towards expansion.
Operating profit likewise rose from around £4.5m in 2011 to around £4.7m – although profit before taxation dropped from £3.6m to £3.1m, given the costs incurred during a time of major change.
Earlier this year, Benfield also saw the return of its former chief executive, Mark Squires.
The latest deal was led by David Wilkinson at Royal Bank of Scotland and Judith Richardson, relationship director at Barclays Bank.
Wilkinson said: “We’re delighted to close this transaction with Benfield and support this great local business in its investment plans.
“The motor retailing market is one RBS has good experience in lending to and we are especially pleased to work with a management team who have dealt head-on with challenging market conditions and continued to prosper.
“I am confident that Benfield will continue to have a very successful, strong future.”