FINANCE

Investment financial analysis



Investment financial analysis

Introduction

Fenner PLC is a well-known and quality manufacturer of polymer products, which is situated in the center of United Kingdom (Fenner, 2011, pp.5-25). The company generally functions in two different sectors that are “engineered conveyor solution and Advanced Engineered Products”. Fenner produces heavyweight belting using PVC, fabric and steel reinforced rubber. Being the leader of polymer technology the company is particularly known for producing heavyweight belting by means of quality PVC fabric and steel reinforced rubber.

In addition to heavyweight belting, the company is also known for producing several other products including “detachable V-belts, thermoplastic belts, Flat belts, Textile structure and others”. In addition to this, advanced technologies used by Fenner have played a vital role in enhancing the position of the company, and in providing the m the competitive edge among its competitors. Company with constant innovation and strong focus attitude to satisfy the need of our customers has resulted in making us the leader of our industry.

In addition to production site, company is actively involved in service sector, for instance, they are known for providing immediate and free support services to its loyal customers(Fenner, 2011, pp.5-25). Company with its innovative mission and vision statement, and unique leadership style has expended its business activities across several countries of the globe.

Discussion

Main source of finance

Fenner plc and its associated groups are mixed finance organization, which means that they are being financed partially through equity, partially through debt, retained earnings, and bank loans. The primary loan services are arranged by the parent company, where as all the subsidiaries enhanced the available funding through overdraft and working capital activities. However, during the current fiscal year, the company along with its subsidiaries has entered into a new deal of around £100m credit transaction of five years.

Out of £100m, around 80 million pound were invested in the clubs of four well known UK based banks, and remaining amount was invested with one of the bank with the aim of gaining extra facilities for the company. These new investment were made after replacing the previous investment of £145million, that were going to expire at the end of year. Moreover, other than £100 million investment, company has also purchased an addition US dollar of $290 million.

As per 31st august 2012, the company overall loan facilities, including US loan comprises of £305.7 million (Benschop & Meihuizen, 2002, pp.611-636). Moreover, within total loan investment around £122.7 million loan amount is committed with banks, and out of 122 million, company has invested 100 million in UK long term loan, that are going to expire on year 2017. Further, at August 31 2012, around £106.2m of purchased facilities by the company were not used up, and this makes total unused facilities of £30m.

The Fundamental financial agreements of the company are related to dedicated loan amenities comprise of EBITDA interest cover, net debt of the company. According to the accounting rules net debt of the company must be 5 times less than EBITDA, and must ...