Member Article

Newcastle bus engine specialists secure six-figure investment

A specialist engine ‘repowering’ firm based in Newcastle has secured a six-figure investment from the Finance for Business North East Growth Fund.

Smiles Engineering North East Ltd, based on Brunswick Park Industrial Estate, will invest in new equipment, staff training, and software with the money.

It is the second tranche of investment from the Fund for Smiles who specialise in re-engineering buses’ existing power systems at a far lower cost than replacing the whole vehicle would entail.

The firm is led by experienced engineer Gordon Mockett, Smiles is the only UK developer to offer a repowered engine fuelled entirely on CNG or Bio-methane gas, and is able to provide fuel savings of up to 40%, compared with diesel on its latest engine integration systems.

Smiles is looking to bring more of its engineering and analytical activities in-house, so that the revenues devoted to them stay within the business, and it is aiming to build on the six new jobs it has created over the last year, which has taken the total workforce to 29.

Gordon Mockett says: “Modern buses are obviously very expensive to buy, as is the fuel that they use, and the industry-leading repowered systems we develop provide operators with substantial operational and environmental benefits that also make a real impact on their cost base.

“Our relationship with Cummins is already strong, but strengthening it further with the new dealership and strategic bus engine repower agreement that we’re aiming for will give us the opportunity and credibility needed to target a wider range of operators that use their equipment, including several based within the North East.

“Widening the range of work we undertake ourselves and improving our in-house skills set through strategic recruitment and training will also mean we’re able to keep more revenue within the business, and will give us even more control over the detail and quality of the work we do.

“Market conditions remain challenging, but we’ve made good progress over the last year, and remain excited about the business’s prospects over the next few years, both at home and overseas.

“The NEL investment team has been very helpful and supportive over the last year, and we couldn’t have achieved what we have so far without their involvement.”

Simon Johnson, senior investment executive at NEL Fund Managers, adds: “Smiles’ success so far has been based on providing innovative, high quality services to customers in a valuable niche market, and they’re now well equipped to take their next steps forwards.

“Having follow-on investments available to forward-thinking businesses like Smiles who want to keep making progress is essential to the long-term health of the North East economy.”

Aimed at regional businesses which are at a development and growth stage, the Growth Fund forms part of the wider Finance for Business North East Fund.

Managed by North East Finance, it will see £125 million of investment capital injected into the region by the European Investment Bank and the European Regional Development Fund 2007-13 over a five year period.

NEL is looking to make around 130 investments over the five-year life span of the Growth Fund, and is actively looking to speak to ambitious north east companies with robust business plans.

For more information about NEL’s investment criteria, visit www.nel.co.uk or contact the investment team on 0845 111 1850.

The ERDF 2007-13 programme is bringing over £300m into North East England to support innovation, enterprise and business support. It will help create and safeguard 28,000 new jobs, start 3,000 new businesses and increase the region’s productivity by £1.1 billion per annum.

This was posted in Bdaily's Members' News section by Tom Keighley .