'Angel' opens the door to growth

A DOOR company which had a brief period in administration last year is expected to achieve turnover of £3m by 2012 after attracting investment from one of Yorkshire's best-known entrepreneurs.

Stephen Martin, the chief executive of construction firm Clugston Group, has invested in the Composite Door Company (CDC) after finding out about the company's plans through the Yorkshire Association of Business Angels (YABA).

YABA puts fledgling business leaders in touch with investors who could help their business grow.

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Mr Martin said he was very excited about CDC's prospects. A television advertising campaign to help it increase its market share is being launched next week. However, Mr Martin claimed that some of the major banks were still not doing enough to back companies with high growth potential.

CDC, which is based in Normanton, West Yorkshire, has eight full time and four part-time staff and plans to hire more soon.

Mr Martin said: "Composite doors are the latest technology in door design and manufacture

and are set to be the largest growing door type over the next few years.

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"In the first year of trading, CDC achieved sales of around 500,000 and I am confident, that, following my investment, it will be able to break the 1m barrier this financial year and 3m the following year."

He added: "I made contact with CDC through YABA, which is like Dragons' Den but without potential investors breathing fire at

you.

"The CDC doors are maintenance free – it's got all the aesthetics of a timber door and they are far more energy efficient than UPVC doors. I felt that they were a dynamic company that was definitely going places.

"Many small businesses have had a hard time due to lack of support from the banks. A lot of young companies are struggling to get finance. They might get sales, but they might not get the funding they need to grow to their full potential. I believe some of the banks are choking off the recovery before it gets started. The really good banks are the ones who will go out and look at a business, instead of just making a desk top decision based on a business plan. Some banks are putting so many hurdles to make it difficult to borrow from them. We need to take calculated risks to support businesses."

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Mr Martin said the new TV commercial features a man who says he doesn't need a UPVC door because he's got a composite one. He added: "We see significant potential for growth although we're not looking for massive volumes." He said CDC's products would appeal to consumers who liked the look of wood doors but didn't like the cost of maintenance.

Mark Hinchliffe, the managing director of CDC, said the company had gone into administration in February 2009 due to "funding issues". He added: "I bought it out of administration four weeks later after selling various assets. We continued trading and no jobs were lost."

Mr Hinchliffe claimed that some banks seemed to be in an "ivory tower" adding: "The moat is around the tower and they are only letting a few people across. We could double our staff and turnover if we had the right funding year-on-year."

As the new-build market was struggling, more people were investing in their current home, which included fitting new doors, he added.

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Brian Mairs, of the British Bankers Association, said: "Business angels can make higher risk investments than banks. Angels are venturing their own cash; banks are entrusting their customers' deposits, which at some point must be returned to those customers.

"Banks are approving four out of every five business loan applications, and are registering some 40,000 new business banking relationships every month – predominantly start-ups. Money is being made available to viable businesses. It is also true that the application process is likely to be more rigorous than it was."

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