Forest Fuels makes premium grade fuels from wood chips and pellets
We are delighted to announce the launch of the Forest Fuels loan auction on the Money&Co. website. Forest Fuels is seeking £275,000, over a 60-month term to fund long-term growth. The credit-analysis team has awarded the company a B+ rating, with an indicative gross yield of over 9 per cent. Led by forestry specialist Peter Solly, the company is, in its own words, "established and profitable".
We reproduce some of the borrower's "pitch" to lenders. The full text is visible to all who go through the simple, free registration process. To register, click here.
"Forest Fuels is an award winning, established and profitable specialist wood fuel consultant and supplier to small and medium scale heat boilers, from a national network of 17 depots. The company currently supplies Premium Grade wood pellet and wood chip fuel to over 500 boilers. As well as fuel supply, we offer consultancy advice to those considering biomass. Forest Fuels also offers ESCOs, where we fund a new biomass boiler installed on a customer's site. There are a number of different contract structures available, suitable for a wide range of customer and site types.
"The business is growing fast as new boilers are installed and require fuel. Sales in year ending March 2012 were £1.8m, in March 2013 were £3.029m, and management accounts for the year ending March 2014 show sales of £4.2m. This strong sales growth is profitable, with a net margin of c.5%. The strategy is to grow the business by securing long-term contract business whilst there is fast growth in the market, to achieve annual turnover of £10m. This growth will be profitable but are investing in overheads ahead of time to be able to cope with the growth."
"The long term growth in wood fuel heating is being accelerated by the Renewable Heat Incentive (RHI), a government scheme which incentivises the conversion to biomass from fossil fuels by paying a subsidy per unit of renewable heat which is generated, for 20 years after boiler installation. Biomass boilers are eligible, and there is a significant increase in the number of commercial scale biomass boilers being installed, for example in schools, hospitals, farms etc. The total UK market for wood fuel supply to the small and medium scale boilers that we supply is estimated at £500 million per year by 2020."