“We’re not a property company, but we have a large property portfolio,” explained group finance director Peter Johnston. “This frees cash up that we can better invest. The yield on this deal is around 9% which is a good yield in terms of the commercial market.”
The £5m “bullet” debt pre-payment frees Polestar from further payments to its bankers in its current financial year. The remainder of the £10m will be used for Polestar’s “ongoing investment strategy”.
Johnston said Polestar had enlisted specialists Healey & Baker to help it review its entire property portfolio, and that further leaseback deals were a possibility – at the right price. “What I’m not going to do is realise value at levels that are uneconomic,” Johnston added.
Polestar has also decided to invest around £250,000 implementing Hyperion business performance management software across its operations. Johnston said it would “considerably enhance” the group’s performance. “It will improve the speed of reporting and enable the financial guys at our sites to get on with running the business as opposed to historical financial reporting.”
Polestar is also looking at enhancing its shopfloor and supply chain processes. “We want to have visibility on a consolidated basis across all our sites, by implementing an ERP [enterprise resource planning] system, and Hyperion sits above that. It brings us into the modern age,” Johnston added.
Story by Jo Francis
Pictured: Johnston – £5m debt repayment
