News about 8 UK growth companies and/or accelerators in the GRID marketplace, 20 - 26th December 2015:
Berry Bros & Rudd £140m | Le Bistrot Pierre £18m | Veetee Rice £72m | Veetee Foods £18m | Gigaclear £7m | Purplebricks £3.4m | Axol Bioscience | Apta Biosciences
BERRY BROS & RUDD: Berry Bros in the red after sales of bordeaux fall flat / Sunday Times
DZ profile: BB&R Limited
Business: wine merchants. It sold whisky brand Cutty Sark to Edrington in 2010 and has since attempted to reinvent the business with a focus on premium wines and spirits. Berry Bros was started as a grocer’s in 1698 by a widow known only as Bourne. Its scales have weighed famous customers including Lord Byron.
Staff: Recently hired Dan Jago - Tesco’s former director of wine, spirits and beer - as chief executive. Simon Berry, chairman. Counts HSBC deputy chairman Sir Simon Robertson and former Allied Domecq and Smiths boss Philip Bowman among its directors.
Financials: reported an operating loss of £4.2m for the 12 months to March 31, more than doubling the deficit from the previous year, on sales of £140m.
News: Sales of bordeaux en primeur — fine wine bought by investors before it is bottled — were “much lower than expected”. It also struggled in the Far East. The final dividend was halved to 220p.
Berry Bros in vintage form | The Sunday Times. July 9 2017
Berry Bros & Rudd... which opened a new shop on London’s Pall Mall last May, saw turnover increase from £145m to £170.5m, buoyed by demand for 2016 en primeur — or wine futures. Dan Jago, chief executive, said: “According to the French, it was one of those years in bordeaux and burgundy. There was a big harvest and the fruit was in good condition.” Pre-tax losses widened to £5.6m as Berry Bros wrote off spending on IT and a US investment.
LE BISTROT PIERRE: On a platter. Private equity backs Le Bistrot Pierre / Peter Evans, Sunday Times.
DZ profile: Le Bistrot Pierre Limited
Business: fast-growing chain of 14 French restaurants
ICB Classification: 5757 Restaurants & Bars
Founders: founded by two Nottingham schoolfriends
Financials: made a profit of £2m on revenues of £18m in its most recent financial year.
Investment: The investment is thought to value the chain at about £20m.
1. LIVINGBRIDGE has invested £9.8m in Le Bistrot Pierre. Livingbridge, which earlier this year changed its name from Isis Equity Partners, bought a 25% stake in Crew in 2006 as part of a £7.7m deal.
2. It plans to open two restaurants in the next six months — in Birmingham and Swansea — with further “significant expansion” planned after that.
How I Made It: Moni Varma, founder Veetee Rice / Laura Onita, Sunday Times.
DZ profile: Veetee Rice Limited
Business: mills and packs rice for household names such as Marks & Spencer and Tesco. All the own-brand rice on the shelves of Waitrose, Asda, Sainsbury’s and Morrisons also comes from Veetee. Has two factories in Britain and one in India.
Location: head office in Rochester, Kent.
Founder: Moni Varma, 66. Arrived in Britain from Malawi as a 33-year-old in 1982. Varma, whose fortune is estimated at £215m, is ranked 450th on The Sunday Times Rich List. Son, Rajiv, 30, is deputy chairman.
Financials: sales of £72m and profits that top £3m. Expects revenues to remain the same for the next financial year because of volatile commodity prices
Investment: He has never turned to outside investors, having started the company with £135,000 of his savings and bank loans.
Staff: over 200
1. Has plans for a £25m factory in North Carolina to help Veetee win more business from American supermarket chains. It is already supplying 7,500 outlets, including Walmart, which bring in sales of £6m.
2. Plans a £1.7m marketing campaign next year.
Business: sells rice dishes ready to heat and eat. Sister company of Veetee Rice.
Financials: revenues of £18m for 2014.
Business: fibre optic internet company installs fibre cables in rural parts of the UK
Launched: December 2010
Founder: Matthew Hare, founder and chief executive
Financials: expects to turn over £7m in 2016 and become profitable a year later.
Investment: raised further investment from Neil Woodford and Prudential last year
News: Hare said tax breaks for small firms were essential when persuading private investors to back the business early on. “We would have built the business at a much slower rate without them,” he said.
PURPLEBRICKS: Entrepreneurs take on estate agents online. Woodford-backed Purplebricks heads for Aim IPO / Small Talk, Kate Burgess, FT.
DZ profile: Purplebricks Group Plc
Business: online estate agency offering a fixed-fee service: £665 + vat, or £995 + vat in expensive London postcodes, payable whether or not a home is sold. This compares with percentage-based fees charged by traditional agents that amount to an average £3,600 + vat on a £200,000 house, according to the consumer group Which?. These fees are paid only if a transaction takes place, however. Operates a network of 165 local licensed agents who provide face-to-face services, but does not run branches. Extra charges are incurred for services such as agents handling viewings. It has 4,300 residential properties listed for sale, which it says is more than twice as many as its closest online competitor.
Competitors: ZOOPLA, RIGHTMOVE, easyProperty, eMoov and HouseSimple.
Founders: Michael Bruce, chief executive, a former lawyer, and his brother Kenny, sales director, who together ran the high street estate agency Burchell Edwards until it was acquired by Connells in 2011.
Financials: revenues £3.4m in the year to April 2015. Forecasters estimate revenues could be £17.8m by April 2016 and £49m the year after. they don’t expect the company to turn much of a profit until 2018.
Investment: Prior to AIM float investors included: Wonga founder Errol Damelin; Paul Pindar, former chief executive of Capita; high-profile fund manager and investor Neil Woodford (29 per cent) - CF WOODFORD INVESTMENT FUND + WOODFORD PATIENT CAPITAL TRUST PLC. New shareholders include asset managers Old Mutual and Artemis .
1. Last week, the company floated on the Alternative Investment Market at a value of about £240m - 70 times the group’s revenues in its first year and 20 times forecasts for next year. The corporate finance boutique ZEUS CAPITAL acted as Purplebricks’ sole broker and nominated adviser.
Purplebricks property website halves losses as it plans US expansion |Judith Evans, FT.
June 29, 2017.
2. ... has almost halved its losses in its first full year since listing on London’s junior market. Revenues doubled to £46.7m in the year to April, from £18.6m a year earlier, while pre-tax losses fell to £6m from £11.9m. The group has launched an Australian offshoot and is preparing to enter the US in the hope of shaking up these markets with its fixed-price model as it has done in the UK. Michael Bruce …said the group’s UK operation had achieved its first operating profit of £200,000, and had enabled the sales of £5.8bn worth of UK homes. The group now expects UK revenues of £80m for the current year, almost doubling the 2016-17 figure.
3. ... has 448 UK agents, more than double the figure of YOPA, another start-up.
Michael Bruce: The entrepreneur behind Purplebricks who’s shaking the foundations of estate agency | The Evening Standard, June 30, 2017.
4. … a £1 billion unicorn with a bigger market value than rivals Countrywide, Foxtons and LSL put together. The latest results, published yesterday, showed a maiden profit in the UK, where it sells a home every nine minutes.
5. The economic logic driving the business is remorseless: compared with average fees of 1.3% and VAT from traditional agents — more than £7000 on a typical London home — Purplebricks charges a fixed fee of £1199 in the capital, and £849 elsewhere.
6. ...doesn’t say how many homes it actually sells, instead publishing how many instructions it receives. Bruce says that 83% of instructions end in a sale and promises more numbers “at the right time, when it would be more reflective of the performance of the business”.
Purplebricks doubles losses in slowing property market | Judith Evans, FT. December 13, 2018
7. ...in the six months to October from a year earlier Revenues rose 75 per cent year-on-year to £70.1m, thanks in part to a 39 per cent boost from the UK market to £48.3m. But losses were up from £11.4m a year earlier as it pushed to convert homebuyers in five countries to its digital model. ...also cut its revenue forecast for the full year and said the run-up to the UK’s departure from the EU was weighing on housing sales in its home market. Having previously said it expected £165m to £185m of revenues for the full year, the company said the figure would now be between £165m and £175m.It reported marketing costs of £39m for the period.
8. Purplebricks said it had completed sales of £5.4bn of UK property in the first half, up from £4.6bn a year previously. Mr Bruce said Purplebricks was targeting 10 per cent market share in the UK.
9. ...largest online rival, EMOOV, entered administration last week. ....in August COUNTRYWIDE, previously the largest high street group, was forced to agree a £140m rescue package after its share price collapsed.
10. The company will launch its “Purplebricks Plus” service, a dashboard for household bills, in the first half of next year, Mr Bruce said.
Purplebricks displays knack for turning faces purple | Kate Burgess, FT. February 21, 2019
11. ....said revenues will be close to a fifth below forecasts in the year to April and the heads of both the US and UK businesses had been replaced. …still claims that its UK revenues to April will be a fifth up on last year ….none of its overseas operations are profitable and sales — which represent about a third of the total — have been disappointing in both the US and Australia. Analysts now expect group pre-tax losses to worsen to £40m to £50m this year.
12. Neil Woodford of PATIENT CAPITAL TRUST … owns about 29 per cent …. German publisher AXEL SPRINGER…11 per cent stake
13. The group’s biggest cost is marketing, and it must maintain spending to keep customers coming. The risk is that vendors dry up if they are unconvinced Purplebricks’ agents can sell properties in a wobbly market. It is not clear exactly how many properties are actually sold by agents, who are not incentivised by commission to clinch deals. They are paid £200 on instruction and £50 on completing a transaction in the UK. Tellingly, in the US, customers’ response to marketing initiatives has been slower than wished and the group has moved to payments on completion.
Business: early-stage biotechnology company that produces customised human cells for use in medical research
Founder: CEO and Co-founder, Dr Yichen Shi
Investment: is seeking £600,000 through equity crowdfunding platform SYNDICATEROOM which has raised over £16m for life science companies. The Axol fundraising is led by serial Cambridge entrepreneurs Jonathan Milner and David Cleevely, whose previous start-ups include Abcam, a research tools company now valued at $1.2bn on London’s junior Aim market.
DZ profile: Apta Biosciences Limited
Business: research tools company
Location: UK and Singapore
Investment: raised £2.8m in two separate rounds with SYNDICATEROOM last year.