Smith & McLaurin revamped to exploit growth potential
Small-sized producers of specialized coated materials for labels and tags tend to live precarious lives. Smith & McLaurin has certainly had its share of mixed fortunes during its 152 year history. Four years ago a management team led by Ian Mackay rescued the company from administration and removed the risk of almost certain closure. He drafted Colin Gault as managing director to help him transform the ailing business. Mackay is a part owner of a turnaround/investment corporate finance firm which actively invests in the recovery of distressed and growth businesses. Now that it is back in the black a new share restructuring deal is intended to spread ownership more widely across the management. This will allow SMcL to implement a five-year business plan. The deal, “worth a seven-figure sum”, was funded by a loan from a Scottish bank and provides facilities worth £6 million ($11.33 million) to the company.
Besides supplying some 2,000 paper products for labels, tags and tickets, including thermal-coated papers, SMcL also manufactures label adhesives and paper and filmic release liners. Over the past four years the company has increased turnover by 46 percent, from £12 million to £17.6 million, raising export sales from 30 to 40 percent in the same period. Various improvements to working practices have increased capacity by 30 percent and saved the company upwards of £100,000 in material yield within the last financial year. Customer lead times have contracted from weeks to days, “and even hours in some instances”, it is claimed.
“It’s been a fantastic year for the business and the performance is testament to the response we received from the workforce,” said Gault. He said export growth had played a key role, with overseas sales making up 40 percent of turnover. Key markets include Ireland, Belgium, Holland, France and Scandinavia. “Our share of the UK market is approximately 4 percent, so there’s lots of room for profitable growth here and that’s why the management were keen to increase their investment as we continue to take the firm forward over the next few years.”