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“These risks suggest that it is vital for potential investors who are not experts in this field to use
experienced investment advisors/managers who are knowledgeable about the sector”
of this issue is also highlighted by the
eligibility of Precision Engineering
companies, in qualifying areas, for
government grants for items such as
new machinery, including the European
Regional Development Fund, England’s
Regional Growth Fund, Scotland’s
Regional Selective Assistance and the
Welsh Government Business Finance
initiative: Regional aid is typically
offered as capital investment for
businesses in less prosperous local
economies, given assisted area status.
TECHNICAL RISKS
Within this expert field, the machines
used are usually reliable and accurate
and maintained to high standards, but
any industry which relies on machinery
can experience breakdowns that
cause delays and late delivery, causing
damage to client relationships and
potentially performance penalties.
Other commercial risks include warranty
claims as it is normal in this sector for
companies to guarantee items for 12
months post-delivery to their customers.
These risks suggest that it is vital
for potential investors who are not
experts in this field to use experienced
investment advisors/managers who
are knowledgeable about the sector.
This can be hard to assess in such a
technical sector, so a track record of
success in the field is highly desirable.
Such advisors/managers should
be gauging multiple factors,
including the following when
looking at potential acquisitions:
Company reputation/perception
Assets and machinery;
is equipment
up to date? Are the premises too big,
too small? Are they owned outright?
Order book;
is it over concentrated
on a specific supplier? What stock does
it hold? What is the work in progress?
Accreditations;
which ones
does the company have and
can they be transferred to any
entity which acquires them?
Embedded relationships;
how many
customers are there and who are they?
How long has the relationship been?
Sector;
do the customers allow for
diversification of existing investments
and use of the same machinery?
Synergies;
are there aspects
which allow cost reductions and
cultivation of key customers for other
products of existing investments?
BRITISH TURNED PARTS
MANUFACTURERS
ASSOCIATION
ENGINEERING
COUNCIL
INSTITUTE OF
ENGINEERING
AND TECHNOLOGY
actively encourages the pursuit of
excellence, providing a network
of information and assistance
with effective lobbying and
representation - helping promote
the engineering industry in the
UK, Europe and global markets.
ENGINEERING
INDUSTRIES
ASSOCIATION
not for profit organisation,
which works in partnership
with the engineering
community to promote the
vital role of engineers and
engineering to society.
not for profit organisation,
which works in partnership with
the engineering community to
promote the vital role of engineers
and engineering to society.
one of the world’s largest
engineering institutions with
over 160,000 members in
127 countries spanning many
engineering disciplines.
UK-based trade association
representing leading companies
in Precision Engineering, rapid
product development, tool-
making, tooling technologies,
metrology and other critical
manufacturing related
products and services.
ENGINEERING UK
GTMA
PLIMSOLL
not for profit organisation,
which works in partnership
with the engineering
community to promote the
vital role of engineers and
engineering to society.
has been providing
analysis of the UK
Precision Engineering
sector for the last
several years.
SOURCES OF INFORMATION
