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Optical chain sets its sights on growth

BGF News 12.15.2013

Duncan & Todd will be expanding its strong north east presence and exploring further acquisitions across Scotland and the rest of the UK thanks to a £5.6m investment of growth capital from BGF.

This is BGF’s eighth investment in Scotland bringing its current Scottish investment total to over £42m.

BGF is investing £5.6m, to fund acquisitions, increase manufacturing capacity and support sales growth.  BGF has taken a minority stake and Bob Brannan will join the board as chairman. Bob brings a wealth of experience in the consumer goods and service sectors. He is the current chairman of Vets Now and the William Jackson Food Group. His former roles include being chairman of Ben Sherman and group managing director of Whyte & Mackay. BGF senior investment manager Patrick Graham has also been appointed to the board.

Duncan & Todd was established in 1973 and is one of Scotland’s largest independent optical chains with a turnover of over £10m and employing 182 staff.  It was the subject of a management buy-out in 2007 led by the current managing director Frances Duncan, who has been with the business for fast approaching 30 years.  Duncan is a qualified dispensing optician with a deep understanding of the sector and has been instrumental in the successful growth of the chain.

The business operates in three divisions – retail stores offering the full patient journey from professional eye exams to eyewear purchases, DSE compliance and safety eye care services for corporate customers and manufacturing spectacle lenses in its own workshop.  The chain currently has 23 retail stores spread across cities and market towns in Scotland from St Andrews in Fife to Wick in Caithness.  It will be banked by the RBS Healthcare division going forward.

Frances Duncan, managing director of Duncan & Todd, explained: “I am very proud of the Duncan & Todd brand and the strong reputation every member of the Duncan & Todd team has helped create.  I have always been committed to the business but my allegiance and goals for Duncan & Todd became more evident during the MBO in 2007 and now this growth capital injection from BGF allows me to focus on bringing these goals to fruition in the future.

“We have a clear vision that will see improvements across all divisions in the business.  As well as acquisitions in new territories, we are committed to enhancing our existing retail units to cater for our growing customer base.  We can now increase our manufacturing capacity and strengthen the promotion of our own ‘ID’ branded goods.

“It was important to find a long-term investor of the right quality.  The team at BGF share the same values and goals as the Duncan & Todd team and we look forward to working together to generate further success for the business.”

Patrick Graham, senior investment manager at BGF, said: “Frances and her team have created a profitable business with significant growth potential.  BGF was established to provide long-term capital to ambitious UK companies and Duncan & Todd most certainly meets all the criteria we look for when selecting our investments.

“Much of the chain’s success has come from strategically locating its retail units in market towns, providing a strong local service and offering a broad range of eye wear at competitive prices.  BGF’s support will now allow Duncan & Todd to widen its horizons and discussions are already underway to acquire a number of additional retail units.”

The market for UK ophthalmic goods and services was worth £3.54bn in 2012 representing an increase of 13.8% since 2008.  Market research estimates that the sector will grow by 9.9% between 2013 and 2017 to a value of £4bn.