Edinburgh-based recruitment specialist Edgar Stewart is targeting further growth thanks to a £425k funding deal which has allowed it to diversify.
The firm, which has more than trebled its headcount in the last year after establishing a reputation for placing top quality candidates into permanent positions via its three recruitment brands, has now expanded into temporary placements after securing a £425,000 invoice finance facility provided by the Scottish office of SME invoice finance specialist Ultimate Finance.
It follows an impressive 12 months in which Edgar Stewart has increased turnover by 300 per cent to nearly £3 million after launching water and energy spin-out ‘Cyrus’.
The firm is now focused on growing the contract business to meet the growing demand for Cyrus’s services and provide continuity in revenue streams, enabling the firm to plan ahead and fuel growth. Unlike permanent positions which provide a one-off fee, income from temporary placements is ongoing throughout the length of the contract.
The invoice finance facility was arranged to cover the gap between Edgar Stewart paying the placements on a predominantly weekly basis and receiving payment from client invoices, which can take 30 days or more, and help to boost cash flow.
Sara Zorriasatein, founding director of Cyrus, which launched earlier this year as part of Edgar Stewart, said: “The invoice finance facility has provided us with the flexibility to further develop the service we are able to provide to our clients.
“As well as providing temporary cover during our clients’ busy spells and support them with specific projects, we can now also provide staff for holiday cover, maternity leave and long term sickness.”
Cyrus is the first and only dedicated recruitment service to specialise in Scotland’s largely public-funded water and energy markets.
The demand for its services, coupled with the ability to utilise invoice finance, has helped to grow Edgar Stewart’s turnover from £500,000 to nearly £3 million in a very short space of time.
Zorriasatein added: “The benefit to us is that we can plan business growth better, as we are able to project fee income months in advance.”
“We wouldn’t have been able to develop this service without the funding line supplied to us by Ultimate Finance. As demand for the service grows, so would the pressure on cash flow, caused by the period of time we have to wait from paying the contractors wages to being paid by our clients.
“The support Ultimate Finance has given us has helped us grow our overall turnover to circa £2.8 million.
“We are extremely grateful to Lynsey Innes and her team at Ultimate Finance. They quickly understood our requirements and worked in partnership with us to provide the support and flexibility we needed to take the business to the next level.”
Lynsey Innes of Ultimate Finance said: “We have worked with many recruitment companies, so we understand the business model and requirements when working in the temporary contract market.
“Edgar Stewart has an excellent business which was being held back because of the funding gap. With a knowledgeable and committed management team and blue chip clients I could quickly see the potential for the business to grow and therefore had no hesitation in providing the invoice finance facility.”
Zorriasatein launched Cyrus in April with £20k of her own money – which Edgar Stewart quickly matched, taking the total investment to £40k.
After taking up residency at the firm’s business incubator and start-up hub in Stockbridge, Cyrus became the third successful spin-out to be launched as part of the Edgar Stewart family, which also earlier launched Talented, a recruitment service for start-ups, SMEs and high-growth spin-outs, and Focus, a dedicated food and drink service, which has since ‘flown the nest’ after being fully incubated.