Barhale has agreed a new three-year revolving credit facility with asset-based lending specialist Independent Growth Finance (IGF). Barhale was advised by FRP’s debt advisory team.
The deal nearly doubles the working capital available to the company from its previous lender as it moves to invest for growth and build its order book. So long as Barhale remains compliant with the terms, the source of funding will remain in place until December 2024.
The previous facility, for £6.0m, was set to expire in July 2022 and was considered insufficient for the needs of the business.
Barhale has more than 700 employees and its clients include water companies, Network Rail and Transport for London. Recent projects include HS2 utility diversions, the Thames Tideway Tunnel and upgrades to London’s Finsbury Park tube station.
In the year to 30th June 2021, Barhale Holdings made a pre-tax profit of £1.3m on turnover of £110.3m. In the pre-Covid year to June 2019, Barhale turned over £163m, although with so much of its work coming from the water industry it is subject to the spending patterns dictated by the regulated investment periods of the sector.
The order book stands at £ 968m, as of 30th June 2021. Net debt, excluding finance leases, was £4.3m.
Chief financial officer Julian Ripley said: “It is hard to overstate the significance of securing this funding for our future growth potential. Alongside our direct delivery model and extensive track record delivering some of the UK’s largest civil projects, we now have a solid platform and additional capacity to fuel sustainable growth. There is more than £650bn of private and public infrastructure investment planned in the UK over the next decade, which presents a huge opportunity for Barhale.”
FRP debt advisory partner Dave Edwards added: “This transaction proves the growing appetite for innovative and alternative lending models like ABL (asset based lending) in sectors such as construction, where they have not traditionally played but are now offering significant value.”