MAGNATE MERCHANTS

Magnate Merchants Ltd is a company based in London, U.K. We source bulk supplies of industrial chemicals from highly respected suppliers from around the world. We then provide raw materials for manufacturing factories in Africa & Asia with a local source of products they require. Our mission is to streamline and simplify the global supply chain for petrochemical raw materials, ensuring a seamless connection between leading manufacturers and key industrial sectors.

We pride ourselves on our bespoke portfolio of products we have nurtured over the years and our superb technical support provided by our sales representatives. By listening to the challenges our customers face, we help create solutions with our products to meet market demands of today. Our portfolio includes critical components of a number of basic industrial products such as rubber and adhesives. We also source and distribute compounds used in cosmetics, inks, dyes, and other more consumer-oriented products.

Some of our largest international clients are situated in Dubai and Singapore, giving us a reach that expands to some of the busiest trade hubs on the planet. We strive to continue connecting nations through their need for chemical components, and crossing borders with industrial unity. Magnate Merchants is building a better future, one hydrocarbon at a time.

Credit commentary:
The directors Baheertha and Kanagasabapathy Kumanan are providing a personal guarantee, which means should the business fail and have insufficient assets within the business to repay the loan, we can look to the guarantor(s) to repay any shortfall on repayment. There have been no CCJs for the business or director. The Equifax score and grade, which we use to assess risk, are based on the 2023 accounts. The primary activity of the business is to purchase PVC Resin from countries like Taiwan & South Korea and sell to distributors from Singapore, Taiwan and U.A.E. In evaluating the company's financial health, their total EBITDA of £486k provides a strong basis for covering interest, existing debt payments, and the proposed facility. The impressive 45% increase in turnover between 2022 and 2023-2024, alongside a gross margin of 16.12%, underscores robust operational growth and profitability. The company's dual banking arrangements, with consistent positive cash flow in their US dollar account and a February-end balance of £234k, reflect sound liquidity management. The increase in tangible net worth to £213M from 2022 to 2023 further signifies stability and a solid financial foundation. Additionally, the company's debt service coverage ratio (DSC) of 1.29 and negative net gearing of -88% highlight a moderate financial risk profile, suggesting effective debt management. The director’s current loan account stands at £106k, while retained earnings have grown to £213k for 2023. Net cash from financing activities has also risen by £187k, and stock levels have increased to £95k. Average balances in their main bank statements consistently reflect five-figure amounts, further evidencing strong cash flow. Current debt obligations with Santander are being managed well, reinforcing the company's overall financial stability.

Inflation comments:
Magnate Merchants expect to be unaffected by inflation, even though they engage in international trade of petrochemical products.