Directorzone

COMPANIES: Demand Logic to Pinewood Group

Published by Directorzone Markets Ltd on February 15, 2016, 9:00 am in News, Other

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News about 14 UK growth companies and/or accelerators (turnover in brackets) in the GRID marketplace, 7th – 13th February 2016:

 

Mubaloo (£5m) | The App Business (£11.5m) | Vinader (£23m) | Zip World (£9.5m) | Demand Logic | Pimlico Plumbers (£25m) | Metal Assemblies (£8m) | Harvey Water Softeners (£20m) | Johnston Press (£270m) | Underdog Group – Hawksmoor (£29.9m) | Pinewood Group (£75m) | InvestingZone | Monitise (£33m) Riversimple Movement

Other companies, off-GRID*: Triumph Motorcycle (£364m)


* TRIUMPH MOTORCYCLE: great escape from losses | Sunday Times. 7 February
DZ profile:

Business: British bike maker. Was founded as a bicycle maker in Coventry. Launched its first motorcycle in 1902. Now has six plants worldwide
ICB Classification: 3353 Automobiles
Launched: 1887
Financials: £10.1m pre-tax profit in the year to last June. It lost £12.3m before tax in the year before. Previous year year to June 30, 2014, turnover dropped from £369 to £364m.
Investment: owned by the Derbyshire-based billionaire John Bloor 72, who made most of his fortune in housing. He bought Triumph out of liquidation for £150,000 in 1983 after assessing a factory as a site for homes. He has reportedly spent more than £80m reviving the marque.
News: has swung back into the black despite a fall in sales, after cutting out some overseas wholesale merchants. Triumph sold 51,400 motorcycles, down from 57,900 — although it made higher margins after launching new models and reducing the amount of stock sent to wholesalers. Triumph said it expected the market for bikes to “remain challenging” but that it is planning to launch new models and poised to expand into Thailand.


App, app and away | Andrew Lynch, Sunday Times.

MUBALOO: sale nets founder big payday
DZ profile:

Business: mobile app developer counts Aviva and the Met Office among its clients
ICB Classification: 9537 Software
Launched: 2010
Founder: Mark Mason, 50
Financials: turnover last year is believed to have been more than £5m
Investment: Mason who started Mubaloo with £180,000 of his own money, owned 76%. Senior staff held the rest.
News:
1. Has sold Mubaloo to IPG Mediabrands, part of Interpublic, one of the world’s top-four marketing agencies. The company is thought to have been worth up to £20m.
2. Mason will focus on his chairmanship at ForrestBrown, which advises businesses on winning tax relief for research and development. He also hopes to set up an investment fund to help aspiring businesses in the southwest.

THE APP BUSINESS:
DZ profile:

Business: Mobile app developer. 24th in The Sunday Times Tech Track 100
ICB Classification: 9537 Software
Financials: sales of £11.5m
News: sold to St Ives last month in a deal worth more than £50m.


VINADER: Buyout bosses invest £20m in designer | Kiki Loizou, Sunday Times.
DZ profile: Monica Vinader Limited

Business: Jewellery maker. Clients include: the Duchess of Cambridge, actress Kate Winslet and pop singer Jennifer Lopez. The jewellery is priced between £30 and £2,600.
Launched: 2007
Location: has three stores in London, shops in Hong Kong, Singapore, Dubai and South Korea and concessions in Harrods and Selfridges.
Founder: Monica Vinader, 47, Spanish designer, grew up in Spain and France before moving to Britain to study for A-levels. runs the business with her sister, Gabriela
Staff: 160 people
Financials: revenues of £23m
Investment: Buyout firm PIPER - which has invested in fashion chain Boden, healthy meals maker Diet Chef and soft drinks business Bottlegreen - is investing £14m. American investor WINONA CAPITAL, which is investing £6m.
News: is raising £20m to accelerate its overseas expansion in America and Asia.

UPDATE:
Jeweller Monica Vinader shines brighter | Liam Kelly, The Sunday Times. May 5 2019, 12:01am,
1. … pre-tax profits of £2.1m for the year ending last July, up from £670,000 for the previous 12 months.
Sales up by 20% to £42.8m, driven by the opening of two shops in London’s Covent Garden and Bicester shopping village in Oxfordshire. Sales in America and Asia accounted for nearly half the total.
2. ...offices in Norfolk, London, New York and Hong Kong, and employs more than 200 people. 


ZIP WORLD: Commando’s zip wire adventure keeps picking up speed |Laura Onita, Sunday Times.
DZ profile:

Business: three adventure playground sites for grown-ups in north Wales. 200,000 visitors a year pay up to £60 for a zip wire ride to take them downhill at speeds of up to 120mph. To bring in business all the year round, Taylor opened a site at Llechwedd slate caverns in 2014, which includes the world’s largest underground zip-wire course and Bounce Below, an underground trampoline complex. A woodland site with a high-rope adventure course opened as Zip World Forest this year.
ICB Classification: 5755 Recreational Services
Launched: Zip World opened its gates in 2013, after three years of construction work
Location: North Wales: Bethesda, Blaenau Ffestiniog and Betws y Coed.
Founders: Sean Taylor, 51 and Nick Moriarty, 48
Staff: more than 100 people. Staff numbers are expected to double once the site in south Wales is completed this autumn
Financials: profits of more than £4m on sales of £9.5m last year. Used £250,000 of their savings together with a loan of £250,000 from the Welsh government to build the first site at Penrhyn Quarry on the northern tip of Snowdonia national park. Expect to reinvest £5.5m this year to fuel expansion and spend £2.4m on a new office for the expanding team.
News:
1. Taylor saved money by making the equipment himself. Outsourcing would have cost an extra £1.5m.
2. Plans to one park in south Wales, two in England and two overseas: in South Africa and Grenada.


DEMAND LOGIC: Keeping it clean in California | Ready Business Britain. 7 February.
DZ profile:

Business: software company that helps buildings run more efficiently and get all of a building’s information running on a web portal. The company operates a subscription model for an annual fee. The firm is targeting large companies — either property firms or companies with large property estate. UK clients include Land Securities’ “Walkie-Talkie” building, 20 Fenchurch Street, in the City of London - and King’s College London, where £400,000 worth of savings were identified.
ICB Classification: 9537 Software
Staff: Sonny Masero, chairman
Financials: received R&D funding through Innovate UK. Turnover has increased by 300 per cent year-on-year for the last two years.
Investment: the firm has been largely self-funded. “… we’re not ready to give lots [of equity] away, so we don’t fit neatly into what VCs are expecting.”
News: This time last year, joined the Clean & Cool Mission, run by Innovate UK and UK Trade & Investment, to showcase the UK’s best cleantech businesses, and introduce their founders to new contacts in San Francisco.


PIMLICO PLUMBERS: Good times flow for tycoon plumber who keeps it simple | Alex Lawson, Evening Standard. 8 February, 2016
DZ profile: Pimlico Plumbers Limited

Business: Plumbing
Launched: 1979
Location: London
Founder: Charlie Mullins, 63, chief executive
Staff: 350 people and hopes to reach 500 in the next two years
Financials: £25m in revenues last year

UPDATE:
Charlie Mullins, plumber to the stars, bags £5.5m payout | Liam Kelly, The Sunday Times. March 3 2019, 12:01am,
1. Charlie Mullins landed a near £5.5m payday last year as Sales at Pimlico Plumbers soared 26% to £43.4m in the year ending May. Pre-tax profits dipped £700,000 to £4.4m after “heavy investment in both staff and systems”. Mullins received £4.9m in dividends — including £1.6m paid after the end of the financial year — as well as his £500,000 salary.
2. The accounts show that Pimlico Plumbers set aside £377,000 to pay costs incurred after losing a workers’ rights case that went to the Supreme Court.
3. Mullins, 66, a former Tory party donor who switched support to the Liberal Democrats because of Brexit, has now promised to bankroll the new Independent Group of MPs.


Poor broadband threatens UK growth | Peggy Hollinger, FT. 9 February.

 
METAL ASSEMBLIES
DZ profile:

Business: makes steel pressings for the automotive and aerospace industries
ICB Classification: 2757 Industrial Machinery
Staff: Stuart Fell, chairman
Financials: roughly £8m a year in sales
News: company “gave up using [third-party] broadband because the service was so unreliable” and had to spend £4,500 to install a dedicated line, and now pays £600 a month for access.

 
HARVEY WATER SOFTENERS
DZ profile:

Business: make and instal water softeners
ICB Classification: 2357 Heavy Construction
Location: Woking
Staff: Casey Bowden, chairman
Financials: sales of £20m a year
News: company is planning investment of £2.5m over the next two years and its designers, engineers and even machines will be connected through cloud services. Has had to install a backup service, and last year three brief outages cost the company an estimated £60,000.


JOHNSTON PRESS: confirms £24m deal for ‘i’ | FT. 13 February
Johnston press: thankful for small mercies | Kate Burgess, FT. 8 February.
DZ profile: Johnston Press Plc

Business: publisher of more than 200 local papers, including the Scotsman and the Yorkshire Post
Staff: 3,000. Ashley Highfield, chief executive since 2011
Financials: The group has been loss-making on a pre-tax level for the last four years, although it succeeded in narrowing its losses to £23.9m in 2014 from £291.4m a year earlier. In 2008 was earning pre-tax profits of close to £130m on turnover of £600m. Its market capitalisation was £500m. Now turning over £270m, struggling to make a profit and its market value is sub-£50m. Net debt of £183m and a pension liability of £500m
News:
1. Is buying the ‘i’ newspaper from Russian millionaires Alexander and Evgeny Lebedev …and said the deal, for £24m in cash, would enhance its earnings and provide “strong cash generation”. Ashley Highfield: “By joining with Johnston Press the combined circulation will be equal to 9 per cent of national daily circulation, making us the fourth largest player in the market.”
2. Pensions liability is less than expected. Last week, JP shares bounced 15 per cent after it said the shortfall between the fund’s assets and the incomes promised to pensioners was not £90m but £40m.
3. Decline in print circulation. Since 2002, the number of regional daily titles in the UK has halved to fewer than 80. According to Highfield, readers  ...won’t pay for local news and information online when they can get it free via social media or the BBC.
Stop press: local hero Johnston Press collapses | Ben Woods, The Sunday Times. November 18 2018
4. A break-up of Johnston Press can’t be ruled out after it folded yesterday. After an 18-month scramble to tackle its £220m debt pile, the board called in administrators on Friday night. Despite more than 60 expressions of interest in either all or part of the business, the board judged that no offer would deliver “significant value”. In reality, there was no way Johnston Press’s collection of assets would raise anywhere near £220m. After crunch talks on Friday the company opted for a deal that would see US bondholder GOLDENTREE ASSET MANAGEMENT seize control through a new company, JPI MEDIA. The stake of Christen Ager-Hanssen, Johnston Press’s biggest shareholder was wiped out.

5. The move slashes its debt from £220m to £85m. The bondholders, including BENEFIT STREET PARTNERS, CARVAL and FIDELITY, will pump in £35m of emergency liquidity to keep the presses rolling. Under the plans, 2,000 staff will transfer to the new company and ensure its collection of titles remains intact. King will stay at the helm, while the rest of the Johnston Press board will be disbanded.

6. The company will be removed from the London Stock Exchange, its market value having crashed from £1.6bn in 2005 to about £4m on Friday.

7. Freddie Johnston, who spent 27 years in charge before stepping down in 2001, transformed the business into a regional press powerhouse through a stream of acquisitions. The rise of the US tech giants has taken a heavy toll on the business models of the regional press as advertising has moved online, with revenues from classified advertising being sucked up by eBay and Google. (Johnston Press commanded classified revenues of £177m in 2008, but these had dwindled to £22m by last year. Newspaper sales sank from £101m to £55m over the same period.)
Johnston Press administrator warns of cash shortfall for creditors | Josephine Cumbo and Matthew Garrahan, FT. November 23, 2018
8. Administrator: ALIXPARTNERS. The report for creditors revealed that Johnston Press received several offers for the company before it filed for administration. The best offer valued the company at between £140m and £150m, significantly less than the £220m Johnston Press owed its bondholders and not enough to cover its liabilities. The purchase of the company out of administration by JPIMedia Group, the company set up by Johnston Press’s lenders, valued it at £181m, the report said.
9. Johnston Press’s pension fund, which has a deficit of £40m, will not transfer to the new owners. The Pension Protection Fund, the largest unsecured creditor, is expected to lodge a claim for £305m with Johnston Press’s administrator, for taking over the scheme’s liabilities.



UNDERDOG GROUP: Hawksmoor - a lot to chew on in the Big Apple | Natalie Whittle, FT. 10 February.
DZ profile:

Business: Steakhouse chain. Hawksmoor’s model is based on a menu of high-welfare, grass-fed beef, cooked over charcoal. In 2013, it launched the first of four Hawksmoor neighbourhood spin-offs under the name Foxlow.
ICB Classification: 5757 Restaurants & Bars
Launched: 2003
Location: have opened 5 restaurants in London over the past decade, with a Manchester outpost added last year. Hawksmoor New York is set to open in 2017.
Founders: Will Beckett and Huw Gott, both 38
Staff: 700+ people across the locations. Hawksmoor will hire about 200 people in the US
Financials: In 2014, operating profit was £3.1m on turnover of £29.9m, up from £2.4m on £17.7m year on year. Although they have borrowed from banks, they have not raised money to fund expansion since 2009.
Investment: in 2013, Graphite Capital, part-owner of the Groucho Club in London, acquired 51 per cent of the business. The 2 founders “own a significant share each” and senior staff own the rest.
News: Opening a steakhouse in New York at the invitation of Westfield Corporation, the mall and retail group, which will run the retail, food and beverage outlets at the World Trade Center. For the vast flagship restaurant in Tower 3 – with 330 covers and room for 100 in the bar - Westfield wanted “something that didn’t exist already in New York”. Hawksmoor’s biggest London restaurant, on Air Street, has 235 covers and 50 in the bar, and the site’s annual turnover is less than £10m a year. “The rent on the New York site is more than our six English restaurants put together, and for it to work it has to be in the top 15 grossing restaurants in the whole of New York,” Mr Beckett says.


PINEWOOD GROUP: Pinewood puts £250m sale on agenda for new hire Rothschild | Peter Campbell, FT. 11 February
‘Star Wars’ and Bond drive revenues at Pinewood to record high | Robert Cookson, FT. 1st July.
DZ profile:

Business: UK film studio group which has played host to some of the most recognised films in history including – from Oliver Twist, Dr No, the first James Bond film, Superman, Mission: Impossible to three of the largest film productions of the 2015: Star Wars: Episode VII — The Force Awakens, Avengers: Age of Ultron, The Man from U.N.C.L.E and the 24th James Bond film Spectre. While Pinewood’s main business is providing studio space to movie production companies, it also provides film finance. During the year, the group provided funds totalling £969,000 to its wholly owned subsidiary film production companies for the production of Take Down and Genius.
ICB Classification: 5553 Broadcasting & Entertainment
Launched: 1935
Location: site set in Buckinghamshire woodland, just west of London
Staff: Ivan Dunleavy, chief executive
Financials: revenues rose 17 per cent to £75m in the year to the end of March 2015. Net profit climbed to £8.1m, up from £5.4m in 2014.
Investment: Aim-listed. Three of its largest investors hold 79 per cent of the stock which bars the studio from achieving a market listing on the London Stock Exchange
-- Peel Holdings, the Manchester-based conglomerate, 39 per cent
-- Warren James, the UK jeweller, 26.1 per cent
-- Aviva Investors, 13.1 per cent after acquiring shares last year.
News:
1. Raised £30m through a placing of shares in April 2015 to fund the first phase of a £200m expansion project and increase the company’s free float, which would in turn allow it to graduate from Aim to the main LSE market.
2. Has hired Rothschild to carry out a “strategic review” of the company’s structure and ownership, which could involve bringing in investors to expand its shareholder register, or even a full sale of the business.
3. Crystal Amber, the activist investor sold out in 2011 but rejoined the register last year – buying a 4 per cent stake - and began pushing for the removal of chairman Michael Grade.
4. Sahill Shan, an analyst at N+1 Singer - Pinewood’s house broker and the only sellside analyst to publish research on the thinly traded stock - says Pinewood could seek an investment of about 15 per cent and that the most likely trade buyers are
-- DALIAN WANDA, the Chinese property and media group. Pinewood already has a deal with Wanda, to help it build one of the largest film and TV studios in China - part of the “Qingdao Oriental Movie Metropolis”, located west of Qingdao in Shandong province, and will be in the country. Wanda is on the expansion trail internationally - this month, it bought a controlling stake in Hollywood studio Legendary Entertainment, maker of the hit films Godzilla and Jurassic World. The company bought a 20 per cent stake in Spanish football club Atlético Madrid last year and in 2012, acquired the US cinema chain AMC.
-- or RIVER’S ROCK from the US, which Pinewood has a joint venture with to build a studio in Atlanta. River’s Rock is a holding company for the Cathy family - the 41st richest family in the US, according to Forbes, with a net worth of $7bn - the billionaires behind US fast-food chain Chick-fil-A.
UPDATE
Sterling: the movie | Katie Martin, FT. July 1, 2016.
Financials: The company described the year to March as one of “strong growth”, with a near 11 per cent rise in revenues to £83.2m and pre-tax profits of £24.8m, up from just under £17m in the previous year.

 


INVESTINGZONE: Crowdfunding sites and finance houses merge | Andrew Bounds, FT. 11 February
DZ profile:

Business: Equity crowdfunding platform. Has raised £12m to date from about 3,000 wealthy investors. They use the tax-friendly Enterprise Investment Scheme and Seed EIS to limit risks.
ICB Classification: 8777 Investment Services
Launched: 2013
Staff: Jean Miller, chief executive
Investment: majority owned by venture capitalist Jon Moulton
News: has merged with ACCELERIS, a Manchester corporate financier that is part of the SENECA GROUP. Miller said that:
-- InvestingZone would become a private equity exchange with companies going through multiple funding rounds. …--- want to attract technology businesses.
-- the deal would ensure due diligence was done on businesses seeking funds and that professional investors were put off by unrealistic valuations and the “Kickstarter” model that treated investments almost as philanthropy.


MONITISE: losses stack up after £167m writedown | Peter Campbell, FT. 13 February
Monitise warns cash balance to fall further than expected | Robert Cookson and Mark Vandevelde, FT. January 21, 2016
Monitise faces tricky sell after clumsy attempt at transformation | Murad Ahmed and Emma Dunkley, FT. 11 September, 2015
DZ profile:

Business: British mobile payments group, which builds mobile services for banks and financial institutions. The company’s partnership agreement with IBM will help it build and implement its mobile platform, while also giving Monitise access to its client base of big corporate customers. French bank Société Générale has already capitalised on the partnership, by launching a new mobile banking offering with the support of IBM and Monitise, to be rolled out across Africa.
ICB Classification: 9537 Software
Launched: 2003
Founders: Alastair Lukies and Steven Atkinson
Staff: chief executive Lee Cameron, the company’s third boss in under 12 months. Peter Ayliffe, chairman.
Financials: Pre-tax loss of £227m for the year to June 30 2015, more than three times the £63m it lost a year earlier. Half-year results in the six months to 31 December:
-- sales fell from £42m to £33m.
-- wrote down £166.8m to the value of its non-cloud businesses.
-- pre-tax losses rose from £58m to £211m. Ebitda losses — a figure that does not include the hefty impairment — reduced from £30.8m to £20.2m. Said it would make a profit in the second half of the year.
Investment: AIM-listed company which saw its valuation exceed £1bn. Has lost 95 per cent of its value in the past two years. Shares, which peaked at more than 80p during 2014, have since fallen to lower than 2p .Spanish bank Santander, telecoms group Telefónica and MasterCard became big shareholders in the company.
News:
1. Is now trying to persuade its customers to adopt a single “cloud” platform that can be accessed by all, hoping to build a more consistent revenue stream from subscriptions than it does from charging licence fees for its products.
Is closing contracts for its new FINkit cloud product.
2. 2015: parted ways with two chief executives and Brad Petzer, who became finance chief in 2013. In September, the company announced that chief executive Elizabeth Buse was departing for “personal reasons”, leaving her deputy Lee Cameron to take over the top job. Ms Buse had only taken sole charge of the company in March, after Alastair Lukies, Monitise’s founder and then co-chief executive, left his position following a strategic review.

UPDATE: Monitise share price soars 23 per cent after US fintech expert Fiserv announces £70m deal to buy the London-based business | Shruti Tripathi Chopra, City A.M. June 13, 2017.

3. Monitise's shares soared over 23 per cent this morning after US finance giant FISERV snapped up the London-based fintech firm in a £70m deal. The selling price is significantly lower than Monitise's £2bn valuation in early 2014. The acquisition is expected to be completed in the third quarter of the year. Founded in 2003, Monitise has struggled amid competition from tech giants such as Apple who entered the mobile payments space. The Aim-listed firm put itself on sale in 2015 following profit warnings. However, it was unable to find a buyer.  In its interim results released in February, Monitise revealed a loss before tax of £7.5m for the six months to the end of December, a 96 per cent improvement on the £210.5m loss it announced for the same period the year before. However, revenues also slipped to £28.2m, down 15.6 per cent from £33.4m the year before.



RIVERSIMPLE MOVEMENT: UK start-up steers Rasa hydrogen car prototype to public trials | Andy Sharman, FT. 13 February
DZ profile:

Business: Manufactures the Rasa hydrogen-powered engineering prototype car - an aerodynamic two-seater local car weighing 580kg and with a top speed of 60mph. It is designed to operate in a 25-mile radius around a single hydrogen station. The 300 mile range is considered a week’s fuel rather than a potential single trip.
ICB Classification: 3353 Automobiles
Launched: 2001
Location: Llandrindod Wells, Wales.
Founder: Hugo Spowers
Financials: The company has a €2m grant from the European Union to support the trial and help fund a refuelling point.
News:
1. Is unveiling of its first production-ready, road-legal prototype carbon-fibre Rasa for a public trial in the autumn, for about 20 people.
2. It will offer mobile phone-style contracts — a flat monthly fee for the car plus a mileage tariff — that run for one to three years. Riversimple’s model projects a 15-year lifetime and sees the company taking potentially all of the revenues, because the service contracts include fuel, insurance and maintenance.
3. Riversimple is now talking to the Welsh government about building a small factory capable of 5,000 units a year — which would make it one-hundredth the size of the UK’s biggest plant, Nissan in Sunderland.
4. Parts are chosen not on the basis of how cheap, light or powerful they are but how they will affect the business model. This includes the carbon fibre shell, which may make the car expensive to produce but results in a lighter product, meaning a smaller fuel stack with less fuel demand.