Brompton Bicycle, the folding bike-maker which is among Britain’s most prominent exporters, is in talks to sell a £20m stake months after disclosing a sharp fall in profits.
Sky News has learnt that Brompton has asked shareholders to approve an investment worth nearly £20m from the BGF, the high street bank-backed fund.
Insiders said the investment, if agreed, would value the company on a pre-money basis at about £180m.
Brompton, which declined to comment on Monday, has been hit by increased supply chain and manufacturing costs over the last 18 months.
In its latest results filed at Companies House, the company said pre-tax profits had slipped to £7.3m, with margins nearly halving during the year ended 31 March 2022.
Brompton is widely regarded as one of Britain’s most distinctive manufacturers, and is regularly feted by government ministers.
It sold more than 93,000 bikes in its last financial year, a sharp increase on the previous 12 months.
House price growth slows as buyers ‘take note of economic headwinds’
Prezzo to shut 46 restaurants putting 810 staff at risk – full list of sites closing
Credit Suisse says £55bn left bank before its rescue
It was unclear how the valuation implied by the new capital-raising compared with prior valuations of the company.
The BGF has invested in hundreds of smaller and medium-sized UK companies since it was established in 2011.
It was established in the aftermath of the banking crisis as a way for lenders including Barclays and Lloyds Banking Group to rebuild their reputations.
One source said the deal between the BGF and Brompton was “not certain” to be approved by Brompton’s eclectic register of shareholders.
Plans for ‘revolutionary’ new factory
Based in west London, it unveiled proposals last year for a “revolutionary” new factory aimed at fuelling further international expansion.
The company, which is run by Will Butler-Adams, said it had identified a 100-acre site on a floodplain in Kent that it intends to redevelop in partnership with Ashford Borough Council.
If a planning application is approved, Brompton plans to open the site in 2027, with its existing home in Greenford operating until at least 2030.
The site will also incorporate a visitors’ centre, museum, educational space, and café.
Impact of supply chain disruption
The announcement underlined a confident outlook for the company in the context of warnings from Mr Butler-Adams about the impact of supply chain disruption on Brompton.
In October 2021, he said shortages of key raw materials such as aluminium and steel were posing a particular challenge, with Russia’s invasion of Ukraine and rising geopolitical tensions over China further exacerbating the headache for specialist manufacturers.
Mr Butler-Adams joined the company 20 years ago when it had a workforce of just 24 and was selling roughly 6,000 bikes each year.
It had been founded in 1975 by Andrew Ritchie, who began designing the iconic folding bike in his flat in London’s Knightsbridge.
The BGF also declined to comment.
