The economic opportunity around renewables is activating at speed, not just in Scotland but around the UK and wider world, with construction opportunities moving from grand designs on paper to physical infrastructure being constructed at pace.
SSEN Transmission’s economic report published in June showed that the business’s planned investment of £29bn over the next five years will support up to 10,000 jobs in the north of Scotland, and 24,000 across Scotland.
On average, £1.6bn a year will flow into north of Scotland businesses, creating unprecedented supply chain opportunities.
Up to one in every five construction jobs in the north of Scotland will be connected to this investment.
The size of this economic prize has been under the watch of the Blackhall & Powis team for several years and over the past 12 months it has fired the starting gun on its expansion plans.
The nine year-old Glasgow-headquartered energy and infrastructure adviser has secured an invoice finance facility of up to £1m from Ultimate Finance to bankroll two of the largest investments in its history.
The funding is helping to create a new office on England’s south coast and a hub in the Middle East.
Founder and managing director of Blackhall & Powis, John Hillis, said: “It enables us to grow the business and it enables us to maintain control of the business, so we retain all the share capital in it.
“When we deliver on our growth plan, that’s value we’re creating for the existing shareholder base, which is still the founders of the business.
“If you look at it across the whole growth cycle we’re in, it’s a very efficient and cost-effective way of funding your business.”
The consultancy, which provides land, property, geospatial, planning and construction phase services to renewable developers and regulated network operators, employs 117 people across nine UK offices and one overseas.
Turnover will close the financial year at between £8.8m and £9m. The five-year plan takes it to £23m.
Before the Ultimate facility was agreed, that horizon stood at £12m.
The decision to expand was taken last October, when the board signed off investments in a Salisbury office, expected to house between 20 and 70 staff within five years, and an international division following clients into the Middle East, Africa and Asia.
Financial modelling ran through to December, at which point the company approached its broker, Robert Perrie of TWO Business Finance, who introduced Ultimate as a funding partner. Talks opened in December with the funding completed shortly afterwards.
Keeping equity and cash within the business was a key strategic goal for the Blackhall & Powis team who are keen to take advantage of upcoming growth opportunities.
John says that only firms with capital behind them will have the option to build.
He said: “I think we’re at a point in the development of the human race where we’ve probably got the greatest array of opportunities that we probably have for 200 years.
“There’s huge potential to grow some really big Scottish and UK-based businesses. I would urge anyone who’s thinking about doing that to just get it done.
“Now’s the time to be starting a billion-pound business.”
Invoice finance suits businesses that ship, invoice and move on.
Blackhall & Powis’ revenue is contractual, tied to multi-stage advisory work on infrastructure projects that are becoming more complex rather than less.
This layered billing cycle can deter funders, indeed Ultimate Finance itself declined the company in 2021, when its finance function was less mature.
Alex Russon, regional director at Ultimate Finance, said: “Invoice finance is quite a bespoke product and it’s only suitable for certain types of industries.
“When you’ve got a contractual element, that presents a problem to most companies because we like simple, straightforward sell-and-forget businesses.
“But when it gets contractual, which John’s business is, there are hurdles to jump. The key thing is properly understanding the business, what they invoice for, what’s expected of them and what their ongoing obligations are.”
The facility is structured to cover at least the next 12 months of trading, with headroom to extend if Blackhall & Powis outruns its own forecasts.
Ultimate Finance is headquartered in Bristol but runs an office on George Street in Edinburgh.
Alex said: “Pretty well every client we take on, if you revisit them 12 months later, something fundamental will have changed.
“They may have a high concentration on one customer, then diversified. They may suddenly be invoicing a lot more abroad.
“Lots can change in a short space of time, so it’s about keeping up to speed and adapting accordingly. If John came to us and said £1m isn’t sufficient anymore, we’d look at increasing it.”
Blackhall & Powis has the capital in place to take advantage of a growing renewable energy market and will be one of the Scottish companies to watch over the next five years.
Robert Perrie, commercial finance specialist at TWO Business Finance, said: “We at TWO Business Finance have been working with Blackhall & Powis now for 5 years. It was clear from the outset that John and the business were on a fast-growth trajectory. Our role is to align the client with lenders who have similar relationship traits. B&P and Ultimate IF are two peas in a pod and long may that continue…Delighted to have supported them both.”
Invoice finance explained
Invoice finance releases the cash tied up in unpaid invoices rather than leaving a business to wait out its credit terms.
The funder advances a proportion of an invoice’s value shortly after it is raised, this can be up to 95 per cent, typically within 24 hours, and forwards the balance, less its fee, once the customer settles.
It comes in three main forms.
Under factoring, the funder advances the cash and manages collections.
Under invoice discounting, the business handles its own credit control.
Confidential invoice discounting works the same way but keeps the funder’s involvement from customers.
Debtor protection, covering customer non-payment, can be bolted on.
Security takes the form of an assignment of invoices supported by a debenture.
Ultimate offers facilities up to £10m and says arrangements can typically be set up within five working days, with the option of a cashflow loan of up to £500,000 alongside.
The attraction for growing companies is that the facility scales with sales.
As turnover rises, so does the funding available, without issuing fresh equity or taking on a fixed-term loan.
Five ways Blackhall & Powis is funding its next stage
1. Invoice finance rather than equity
The up to £1m facility from Ultimate Finance is secured against the company’s receivables rather than its share capital. The founders retain every share, meaning the value created by the five-year plan accrues to the existing shareholder base rather than an incoming investor.
2. Retained earnings, still doing the heavy lifting
For most of its nine years the consultancy has grown by reinvesting profits, supplemented by conventional debt. The Ultimate facility sits alongside that rather than replacing it, funding working capital while retained earnings continue to underwrite longer-term investment.
3. A facility sized to grow with turnover
The arrangement is structured to cover at least the next 12 months of trading, with scope to extend if turnover runs ahead of forecast. As invoicing rises, so does the funding available, without a fresh credit application each time the business outgrows its line.
4. Headroom for further products
Ultimate’s wider offering includes asset finance and cashflow loans of up to £500,000. Neither is in place at present, but both remain open to Blackhall & Powis as the Salisbury office and Middle East hub move from set-up into trading.
5. Cash held back for growth
Keeping equity and cash inside the business is deliberate so that it can take advantage of future growth opportunities as they emerge.