For Anglia Maltings’ CFO George Thompson, however, this was not a crisis but an opportunity. Thompson, who has been on the board since 2018 and became CFO in 2021, had a major refinancing of the Group on the top of his to-do list.
An existing five-year syndicated arrangement had been rolled over in single-year extensions as a result of the Covid pandemic but he was eager to reset the banking facilities for the group to provide a financing structure for the longer term.
“You only want to refinance once every few years but it was fortuitous that we were revisiting our limits and our facility levels at that time. We wanted to refinance term loans that had been part of a previous investment strategy but also increase the limits on our inventory and debtor finance facilities to accommodate the higher working capital consumption that the combination of higher barley and energy prices was demanding.”
Against this fast-moving backdrop, Thompson and CEO Stuart Sands presented their strategy and vision to a number of banks.
There had been a relationship between the Anglia Maltings group and HSBC UK for seven years and the strength of that relationship came to the fore. Thompson says that the facility could have been syndicated – as it had been previously - but ultimately chose HSBC UK to be the sole financier, agreeing a new £93m Asset Based Lending facility based on a three-year term, with an option to extend.
“When we asked about whether HSBC UK would provide 100% of the finance, their decision-making was very fast,” says Thompson. “They were flexible, pragmatic and understood our business. They had seen it perform well. We didn’t have to explain in detail how the Ukraine war was affecting our working capital cycle because Allan Wilkinson, HSBC UK’s head of agrifoods, understood immediately. That gave us great comfort. They knew that this was a requirement for working capital and not a structural increase in risk on the business.
“That speed and agility was something we wanted in our financing partner. It was quite clear that they weren't just a bank. They were a financing partner. They really understood what we wanted to achieve. They shared in the vision of how we want to succeed and they wanted to support us in that. When you talk to them, you always feel like they are proactively trying to find a solution for how it can work for the business.”
HSBC UK’s international presence was another important consideration. Crisp Malt was already using HSBC UK to provide banking services for its Polish operation. “They have always been a global bank to us and if we see further opportunities abroad, HSBC UK’s worldwide footprint is a consideration.”
The new facility provides the Anglia Maltings group with the financial flexibility and liquidity to comfortably trade through the current high commodity cycle while also supporting its long-term strategic objectives.
Crisp provides 450,000 tonnes of high-quality finished malt and other products every year to brewers, distillers and food manufacturers. Its focus is on speciality malts which enable its customers to create different products. That flavour-packed craft beer you sampled recently? It’s the Crisp malt that packed it with flavour. Not only is there a growing and diversifying demand for speciality malts in the beer and whisky markets but also as an ingredient for innovative developments in foods such as cereals and cakes.
“We are operating as a producer of The Finest Malt, supplying our customers when, where and with the malts they want” says Thompson, “and we want to grow with our customers, creating lasting partnerships that bring flavour and joy to life.” One area where the company’s customers are creating flavour and joy is the Scotch whisky industry. “It’s a buoyant market experiencing strong demand, particularly in Asia and in North America,” notes Thompson, “so it's growing our exports and it’s a delicious product!”