MKM Building Supplies | Gymbox £16m | Boden £283m | Princess Yachts £201m | Montezuma’s £4.2m | Simba Sleep | Eve Sleep £20m | Neos | The Independent £20m
News about 9 UK growth companies and/or accelerators + turnover in the GRID marketplace, 16th- 22nd October 2016:
MKM BUILDING SUPPLIES: Boss cements plans for £40m payday | John Collingridge, The Sunday Times. October 16
Business: builders’ merchant chain of 44 branches
Founders: David Kilburn, 71, holds a 40% stake worth about £80m, and is expected to sell about half of it. Co-founder Peter Murray exited in 2006.
Investment: buyout firm 3i owns 35% and Lloyds Development Capital holds 10%. MKM is being groomed for a float or sale to a private equity bidder, which could value it at about £200m.
GYMBOX: flexes financial muscles | Kiki Loizou, The Sunday Times
DZ profile: Gymbox Limited
Business: London gym chain known for its eclectic exercise classes and bold advertising campaigns. Has built a database of more than 22,000 members.
Founder: Richard Hilton, 45,
Financials: In the past 12 months the company has earned profits of £5.5m on revenues of £16m.
Investment: has raised £13m of investment from the Business Growth Fund (BGF) to help it with expansion plans. BGF first backed Gymbox two years ago with a £10m cash injection. It has also secured a loan of £26m from HSBC to fuel its growth from 8 sites to at least 12 within a year.
UPDATE: Secrets of my success: Gymbox founder Richard Hilton | The Evening Standard, March 16, 2017
What do you do? “I was chief executive of Gymbox until late last year, when I sold most of my stake [as the BUSINESS GROWTH FUND and HSBC invested £39 million]. I’m still a director and now spend most of my time working on brand development and strategy.
Managing a disruptive brand as it gets bigger can be difficult. Going from a cheeky upstart to a serious, private-equity backed business while keeping the brand alive is a challenge. As we’ve got bigger I’ve toned down the messaging. We don’t need to be as edgy just to get attention when we’re bigger.
What was your biggest break? "Getting the funding for the business in 2002, and then buying it back. My background wasn’t in gyms. I’d never worked in one and didn’t have the money. But I got FITNESS FIRST to take a majority stake as a silent partner. Then, nine months later, its then chief executive, Mike Balfour, called me ..and said they were going from a plc to being privately owned and focusing on Asia, you’re not part of our growth plans. It meant I could then grow the business myself."
BODEN: Yummy mummies cool on Boden | Robert Watts, The Sunday Times.
DZ profile: J.P. Boden & Co. Limited
Business: mail-order retailer which now has a single store in Hanger Green, northwest London.
Location: northwest London
Founder: Johnnie Boden, 55. The old Etonian and his family — who were valued at £410m in this year’s Sunday Times Rich List — still own about 60% of the business.
Financials: Profits fell by 25% from £32m to £23.9m last year, with sales roughly flat at £283m for a third successive year. The business’s net assets also declined, from £52m to £33.4m. £7.9m dividends paid by the company last year.
Boden lures Tesco high-flyer | Oliver Shah, The Sunday Times. February 12 2017.
1. Boden has hired Jill Easterbrook, who started her career at Marks & Spencer and was most recently business transformation director at Tesco. Julian Granville will remain as executive chairman and founder Johnnie Boden will stay as creative director.
2. recorded pre-tax profits of £23.9m for the year to December 2015 — a fall of 25% on the previous year. Sales were flat at £283m for a third successive year.
Boden’s overseas sales boosts results | Conor Sullivan, FT. September 4, 2017.
3. reported pre-tax profit rising 9.6 per cent to £26.2m for the year to December 31 2016, as customer numbers rose and as it increased its gross margin. Sales rose 9 per cent to £308m. The group is preparing to open its first high street store. The company said foreign sales — almost two-fifths of revenues are from the US — had helped it offset the effect of the falling pound on its costs and lessen the need to raise prices in the UK.
4. The group is also entering partnerships with other high street retailers, including a wholesale deal with US department store NORDSTROM and concessions in JOHN LEWIS in the UK. While Boden said it had a “long list” of new markets or product categories it could enter, the medium-term goal was to expand in locations where it has a presence. “We’re looking at countries we’re already in and expanding access, and that’s through partnerships with others and our own stores,” Ms Easterbrook said.
She added that the company had given itself more flexibility in its supply chain to allow it to respond more quickly to changing trends.
PRINCESS YACHTS: LVMH throws £13m lifeline | The Sunday Times
Business: luxury motor yacht maker has five sites in the southwest
Staff: Princess cut 350 staff, more than 15% of its workforce, last year.
Financials: 16% slide in turnover to £201m and £20m losses last year. Despite the losses, it paid out £3m in dividends.
Investment: The company was bought by French luxury tycoon Bernard Arnault’s LVMH, the French luxury fashion house run by Arnault, in 2008. LVMH is pumping a further £13.4m in. Accounts show shareholders injected £8.8m in July 2016, with a further £4.6m to follow by the end of this year, to support an “ambitious growth period”.
News: sales have plunged 16% after shrinking sales and an array of problems including storm damage in 2014, last year’s strength of sterling, a line-up of less expensive vessels and weaker demand from wealthy Russian, Chinese and Brazilian buyers.
MONTEZUMA’S: When it comes to whipping up chocolate, we’ve got Cadbury licked | Laura Onita, The Sunday Times
Business: chocolate brand. Its products are sold in John Lewis, Waitrose and Sainsbury’s and about 2,000 independent shops, as well as the couple’s own six stores. A 100g bar of organic milk chocolate costs £2.59, more than double the average price. The company uses raw cocoa powder from countries such as the Dominican Republic, Peru and Venezuela. The chocolate is tempered, blended and packed on site and shipped to 25 countries.
Location: Chichester, West Sussex
Founders: Helen, 46 and Simon Pattinson, 50, City lawyers who had sold their home to travel the world in the late1990s.
Financials: Last year the business posted pre-tax profits of £379,000 on sales of £4.2m. Are aiming for sales of £8.5m this year.
Investment: set up with £350,000 of savings and £100,000 raised from family and friends. She and Simon are the sole owners of the business, having bought out their early investors.
News: Expanding sales overseas is their priority and they recently spent £500,000 on new machinery to cope with more orders.
Mattress wars: rude awakening for a sleepy market | Jonathan Margolis, FT. October 17.
Once the preserve of fusty showrooms, a new wave of nimble ventures turns out beds to order
DZ profile: Simba Sleep Limited
Business: bed-in-a-box concept mattress business. New-wave specialist company building mattresses to order, compressing and shipping them the same day. Some 70 per cent of sales are made online, but JOHN LEWIS, the UK department store, has a two-year exclusive deal to sell the product in its stores. Simba delivers to mainland Europe, and soon in North America. Pervasive presence on the web and social media, Simba is also spending heavily on conventional TV advertising and hoardings.
Location: London. Factory outside Derby in the English Midlands
Founder: James Cox, 29, chief executive
Staff: Sir John Hegarty, founder of the advertising agency BBH and creative director of Simba
1. 15,000 mattresses sold, mostly in the UK, since launch in February. Mr Cox expects 25,000 sales in year one and is forecasting £100m turnover by 2019.
2. Squeezing a mattress by 80 to 90 per cent its original size makes delivery typically five times cheaper. The idea was developed in Italy 15 years ago, but had little impact on the conservative bed business.
3. Simba’s manufacturing process revolutionary. The finished product goes into a plastic bag, then into a press, which eases down with several tonnes of force. The mattress hisses as most of its air is expelled. Five layers of different foams, and the 2,500 springs, are compressed until the mattress emerges a tenth of its thickness. It is folded in two, rolled into what looks like a big Rizla machine, and packed into a cardboard box. The finished package would be easy to manoeuvre into an urban apartment. During a two-hour visit to the factory last month, 83 online orders for Simba mattresses — priced from £399 to £899 — came in. All would be made to order and shipped that day.
4. A mattress traditionally retails at between six and eight times its manufacturing cost and Simba’s margins are substantially lower.
5. Bed-in-a-box competitors EVE, Simba and Casper outsource manufacturing and style themselves with slick online promotion. Casper claims to be one of the fastest-growing consumer brands ever, hitting $100m in revenue in 2015, its first calendar year. The UK’s Dreams chain, has moved swiftly to launch its own bed-in-a-box subsidiary, Hyde & Sleep.
The mattress startup battle's heating up in the UK as Simba gets in bed with top City investors | Lynsey Barber
City A.M. February 13
6. Simba Sleep has tempted several top City investors into bed in a fresh £9m funding round, bringing total investment in the one-year-old startup to £17.5m. HENDERSON GLOBAL INVESTORS, NUMIS SECURITIES, Citi's head of investment banking Michel de Carvalho and Richard Goldstein, whose family founded Superdrug, join a star line up of backers. Also plunging cash into the venture is former hedge fund boss Julian Barnett, Oblix Capital's Rishi Passi and and Nigel Wray, the chairman of Saracens rugby club and a City heavyweight. The new cash will fund ambitious plans to hit the equivalent of a new market every two weeks over the next 18 months as it targets sales of £40m this year. It currently serves the UK and Ireland, France, Germany, the Netherlands, North America and the Middle East.
7. Simba said it has sold 45,000 mattresses over the past year and is growing 30 per cent month-on-month in the UK and at a rate of 50 per cent across Europe.
Cash under the mattress at Simba Sleep | Peter Evans, The Sunday Times. December 17, 2017
8. ...has raised a further £40m from a star-studded group of investors to bankroll expansion in China and America, ...led by venture capital firm ATAMI CAPITAL and included existing backers such as Nigel Wray, chairman of Saracens rugby union club, and Swiss private bank LOMBARD ODIER.. It takes the total amount raised by the company to £58.5m. Investors in previous rounds have included Innocent Drinks co-founder Richard Reed.
9. It has operations in 14 countries including France, Spain and Germany — as well as Britain, where it generates 60% of its sales.
The business has 80 staff and has sold 100,000 mattresses since it was launched. The company said it expected to make sales of £41m this year and has forecast £167m next year.
DZ profile: Eve Sleep Plc
Business: bed-in-a-box concept compressed-mattress company offering a 100-day trial. Eve has sold 25,000 mattresses in 18 months and says it is delivering 700 a week.
Founders: Among its founders are cousins Jas Bagniewski, a veteran of Rocket Internet-backed fashion retailer Zolando, and Kuba Wieczorek, Londoners from a Warsaw family.
Financials: The company is projecting £20m turnover by the end of this year.
Investment: Last week it raised £13.9m from backers including WOODFORD INVESTMENT MANAGEMENT and technology fund OCTOPUS VENTURES.
First London IPO of 2017 will be a VCT-backed company | The Wealth Club. 15 May 2017
1. London’s first retail IPO of 2017 will be a VCT-backed company eve Sleep Ltd, backed by OCTOPUS INVESTMENTS, has announced it will float on AIM on Thursday 18 May. The 2½ year old company, based in Camden, has raised £17m to date over three investment rounds. Octopus has backed the company on all three occasions (see below). Other investors include DN CAPITAL, CHANNEL FOUR and WOODFORD INVESTMENT MANAGEMENT."
Small-cap focus: recent retail IPOs battle the downturn | Conor Sullivan, FT. August 5, 2017.
2. Through jaunty branding and lower prices enabled by an efficient online operation, Eve Sleep hopes to undercut the likes of DREAMS or JOHN LEWIS in selling what is a relatively uncomplicated product. Customers uneasy at buying online are offered free returns for 100 days, and the product is made of memory foam and rolled up into an easy-to-manoeuvre box.
3. The shares are down 7 per cent since their IPO — giving the company a market cap of £130m — but enjoy high-profile support from fund manager NEIL WOODFORD, whose firm raised its stake to 21 per cent in recent weeks.
4. Eve is unprofitable, with a move into the black envisaged in 2019, once marketing is cut back when the brand is more established. But revenues are powering ahead, rising 126 per cent to £11.5m in the first half of 2017. House broker PEEL HUNT said the business model was “compelling” thanks to its high margins and low need for investment.
NEOS: Lineker-backed insurer scores £1m in funding | Billy Bambrough, City A.M. October 18
Business: insurer - so-called insurtech startup, Internet of Things insurer. Hiscox, UK insurer is a partner
Staff: chief executive, Matt Poll.
Investment: £1m in initial seed funding, valuing the business at £8.4m. Counts Match of the Day presenter Gary Lineker among its backers and the latest funding round adds insurtech fund Eos Venture Partners.
1. Neos is planning to launch in early 2017 after more than a year in development.
2. The Internet of Things – which connects formerly offline electronic equipment to the internet – has proved unpopular amongst sceptical consumers but investors have continued to pour cash in to fresh projects.
Almost three quarters of consumers are not bothered about having smart technology in their homes in the coming years, according to a recent survey of more than 2,000 people by PwC.
THE INDEPENDENT: returns to profit after axing newspaper | David Bond, FT. October 20
Business: UK national paper founded 30 years ago to take on the partisan British press with an emphasis on neutral political coverage, world-class foreign reporting and a ground-breaking use of pictures. First UK national paper to go digital-only
Founder: Andreas Whittam Smith, founding editor, Stephen Glover and Matthew Symonds
Staff: Since March, when both daily and Sunday newspapers closed, the business has seen about 110 of the company’s 200 editorial staff leave, with 10 journalists hired to take the new digital editorial team up to 100 people. Christian Broughton, editor; foreign correspondent Robert Fisk; defence correspondent Kim Sengupta; chief political commentator John Rentoul.
Financials: The company says its digital advertising revenues have grown by 45 per cent year on year and that it is likely to record about £20m of revenues in 2016. With a younger staff on lower salaries and no printing or distribution costs, the Independent said it now had a sustainable long-term future. Independent Print Ltd, which ran the newspaper, made a pre-tax loss of almost £7m in 2015 and had net liabilities of £69m. Mr Lebedev and his father Alexander loaned the newspaper business £7.8m to keep it afloat.
Investment: owner Evgeny Lebedev
1. The Independent has become profitable for the first time in 20 years, six months after it became the first UK national newspaper to shut down its printing presses and exist solely online.
2. The company says its digital switch has been vindicated by significant growth online — from 15.8m unique users in February to 21m in June ahead of the UK’s referendum on EU membership, before falling back to 16.2m in August.
By comparison, Mail Online was the biggest newspaper website in the UK with 26.4m unique users in August, while the Guardian had 24m.Separate figures from ABC show the Independent had 74.3m unique browsers in August 2016 — a 41 per cent year-on-year increase. Its Facebook page has 5m likes — 1.3m more than the Telegraph.
3. The Independent is betting that it can develop an online brand capable of taking on other digital publishers such as BuzzFeed and the Huffington Post by maintaining its legacy brand while attracting younger readers with lighter articles, including one recent report about a kitten rescued from a hurricane in Haiti wearing a sock.