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Bank deal helps firm hit turnover record

A SIGN designer and manufacturer has reported a record turnover in its 75th year of trading helped by large contracts in the banking sector and a successful acquisition.

SIGN OF THE TIMES: Merson SIgns says rebranding work for banks including TSB boosted its turnover. Picture: PA
SIGN OF THE TIMES: Merson SIgns says rebranding work for banks including TSB boosted its turnover. Picture: PA

Merson Signs said work on rebranding Lloyds Banking Group branches and the recently launched TSB helped it to a 57% rise in turnover to £26 million.

Although figures for the 12 months to September 30 have still to be audited, the company expects to report pre-tax profits in excess of £1m. That would be more than double the £455,112 recorded in the 2012 financial year when turnover was £15.3m.

Chief executive Roddy Angus said the company also benefited from the acquisition of CGL Systems, which designs and manufactures cladding and rainwater management systems for the construction industry, in January this year.

A move into larger premises in East Kilbride, covering around 50,000 square feet, also helped.

Mr Angus said: "We are investing a lot of the profit in the business going forward to [set us up] for the next five years hopefully. We have got a big research and development and capital expenditure programme on plant and equipment."

Mr Angus confirmed the research and development projects will be run from Scotland where the company employs around 170 of its 220 staff.

He said plans included "new products and trying to use LED lighting, for example, creatively and also new processes within the business in areas such as how we run our projects". He added: "We will be investing heavily in systems and people for that."

The Scottish Loan Fund, run by Maven, backed the CGL deal with a mezzanine debt facility. The purchase of the CGL assets was also backed by a Regional Selective Assistance grant from Scottish Enterprise and funding from HSBC.

Merson, which does all its manufacturing in Scotland, is now looking at further deals to expand its offering. Mr Angus said: "We are actively looking for other acquisitions that suit what we do. We are looking to extend our product range more than the geography."

While it does consulting work in the Middle East it has yet to break into the export market with its products.

Mr Angus hopes that will change over the next two to three years as large infrastructure projects on which Merson has been consulting start to move to construction.

Merson, which has blue chip clients across a number of industries and also worked on signage for the London Olympics, said its banking work was a major driver of growth in the financial year just finished.

Mr Angus said: "That is business that has been pending for some time and is really the reason behind the successful year.

"We are hoping to have a successful year this year but have to find new contracts.

"Traditionally we will always be busy in the run up to Christmas and it is always a bit sluggish to start in January but our order book is looking quite good so we are optimistic."

The general pick-up in economic activity appears to be benefiting the company with more demand for its services.

Mr Angus said: "There is no doubt there is a lot more activity now. We went abroad in 2009 to generate fees to keep ourselves busy.

"Now there is a lot more tenders, design requests and planning of future projects and refurbishments in the UK.

"A lot of what we do is brand related so we perhaps tend to see [the improving confidence] earlier and I think we are seeing that now, without a doubt."

Merson was founded by Jim Merson in 1938 as Scottish Neon Products. It became Merson Signs in 1971 and left its Glasgow base to move to East Kilbride four years later.

Mr Merson retired and sold the business to Bruce Lyle who remained as owner until his own retirement in 2005.

It was then that Mr Angus headed a management buy-out of the business.

Mr Angus and his executive team have worked closely with partners at accountancy firm Johnston Carmichael in recent years.

Ricky Murray from the firm said: "Merson is another great example of a Scottish business that has expanded its reach across the UK and beyond through hard work and innovation.

"The success in delivering large scale projects has come through its ability to devise a quality design and manufacturing process and roll it out within their clients' timescales and to their exact specification."

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