News about 7 UK growth companies and/or accelerators + turnover in the GRID marketplace, 24th – 30th April 2016:
Silvergate Media | Prodpad | Kestrel Foods £12m | Zaoui & Co £17.3m | Upham Group £12.2m | Boohoo.com £195m | Thomas Sabo £25m.
SILVERGATE MEDIA: Octonauts pair pocket £40m | Simon Duke, The Sunday Times. April 24.
Business: TV production company which makes the hit children’s cartoon series Octonauts and owns the rights to Peter Rabbit.
ICB Classification: 5553 Broadcasting & Entertainment
Founders: Labour peer and former chairman of online fashion retailer Asos, Lord (Waheed) Alli, 51, and Viscount Astor, Samantha Cameron’s stepfather
Financials: makes underlying profits of £8m a year
Investment: The new investment values Silvergate at between £70m and £80m, industry sources said.
1. Octonauts producer has sold a 51% holding to Shamrock Capital Advisors. Alli and Astor to share an estimated £40m bonanza. Shamrock Capital Advisors is a fund based in Los Angeles and was founded by Walt Disney’s nephew Roy to manage his personal fortune. Alli said Shamrock had “an affinity for entertainment and media and understood the value of intellectual property rights”.
2. Alli is eyeing a number of acquisitions and is hoping to buy more children’s TV broadcast rights and boost Silvergate’s “production and digital capabilities”.
3. It is understood the company is locked in talks with three Chinese media companies to produce a film version of Octonauts. The series, which charts the exploits of an intrepid team of aquatic adventurers, is the most popular show for pre-school children in China. State-owned broadcaster CCTV is co-producing the fifth series of Octonauts.
4. Silvergate recently signed a deal with Netflix, which will make Octonauts available to subscribers in Latin America, Canada and France.
George Osborne’s boost to low earners is piling the pressure on entrepreneurs | Kiki Loizou, The Sunday Times.
Business: sells software which allows product managers to see their ideas through to reality by keeping the step-by-step process in one place. Clients include charity Cancer Research and the tech giant Hewlett-Packard.
ICB Classification: 9537 Software
Founders: Janna Bastow, 30, and Simon Cast
Staff: 6. They plan to hire an extra three people in the near future and have no concerns about how the National Living Wage (NLW) will affect their plans.
Financials: have seen revenues grow 50% in a year
Investment: has so far funded the business from her savings
KESTREL FOODS: Banks thought we were fruit and nut cases... until now | Laura Onita, The Sunday Times
Business: imports produce such as cashew nuts from Vietnam, Brazil nuts from Bolivia and dried mango from the Philippines to roast, mix and flavour. Its Forest Feast brand is stocked by retailers including Waitrose, Tesco and Asda and is sold in 36 countries. Exports count for 48% of revenues, with strong demand from countries in the Middle East as well as Brazil, Russia, India and China.
ICB Classification: 3577 Food Products
Location: Portadown, Northern Ireland
Founders: Michael, 48, managing director and Lorraine Hall, 47, sales and marketing director.
Staff: 90 employees
Financials: Last year the company posted pre-tax profits of £650,000 on sales of £12m. The couple have invested about £2m in the factory since 2005. The bank lent them £10,000 to start Kestrel Foods.
Investment: The Halls own 100% of the business
News: After almost a decade of organic growth the couple converted a former meat factory into a state-of-the-art manufacturing facility.
ZAOUI & CO: cash in on big M&A deals | Arash Massoudi, FT. April 26.
Business: European boutique advisory firm with big merger and acquisition mandates. Has become one of the most successful private “kiosks” during the two-year surge in mergers and acquisitions — placing it alongside other boutique advisory firms built on the connections of just a few dealmakers, such as London’s Robey Warshaw and New York’s Klein and Co. Zaoui & Co’s only UK client to date on an agreed transaction was GlaxoSmithKline, the UK’s biggest drugmaker, which used the firm on a complicated series of large asset swaps and deals with Switzerland’s Novartis.
ICB Classification: 8777 Investment Services
Founders: brothers Michael and Yoel Zaoui
Staff: 12 people
Financials: Recently released filings show the firm earned £17.3m in revenues and made a net profit of £8.7m, in the 18 months to the end of 2015. Total profits for the firm are likely to be significantly greater because Zaoui & Co is also incorporated in Luxembourg, where most of its revenues are recorded. Its filing with Companies House earlier this month also revealed that the dealmakers each paid themselves remuneration of £342,500. Reported expenses were £6.4m and the firm paid a tax rate of around 20 per cent. Its £8.7m profit was transferred to the firm’s reserves, which came to £9.1m at the end of 2015.
1. Its UK filing is also unlikely to have captured fees it earned for roles on megadeals such as the €40bn tie-up between French cement maker Lafarge and its Swiss rival Holcim in 2014, or the €15.6bn merger of telecom equipment group Alcatel-Lucent with rival Nokia last year.
2. US regulatory filings show that Zaoui & Co received $22m for its role in advising Dresser-Rand, the US oilfield equipment maker with a large French presence, on its $7.6bn sale to Germany’s Siemens in 2014.
UPHAM GROUP: Craft beer, meet the champagne set: Upham set to list | FT. April 25
Business: runs 15 Home Counties pubs and its own craft brewery. Its brewery in Hampshire produces various ales for around 300 local pubs and sells bottled beer in supermarkets.
ICB Classification: 5757 Restaurants & Bars
Staff: Charles Good, chairman
Financials: from 2013 to 2015, its revenues grew from £4.6m to £12.2m, with earnings before interest, tax, depreciation and amortisation swinging to £900,00 from a loss of £200,000.
1. Has today announced plans to float on the UK’s junior market. It wants to double its list of pubs “in the medium term”, subject to funding, and also says there’s around 600 more in its area of focus – Hampshire, Berkshire and Surrey – that could meet its acquisition criteria.
2. management team has used its significant experience to buy, develop and manage an exceptional collection of individual premium pubs, with each pub tailored to meet its local market. This successful buy, develop and manage formula has led to significant uplift in the value of the Group’s estate, with further organic growth potential.
BOOHOO.COM: sales and profits jump | Paul McClean, FT. April 27, 2016.
DZ profile: Boohoo.com Uk Limited
Business: online retailer. The group said a key driver of growth was its broader range of clothing, including plus-size, petite, swimwear and denim lines, while lingerie also performed “very well”. Sales increased in every territory; in the UK by 38 per cent, continental Europe 25 per cent and the rest of the world 56 per cent.
Location: Manchester. Jersey-domiciled
Staff: Mahmud Kamani and Carol Kane, joint chief executives
Financials: revenues rose 40 per cent to £195m and pre-tax profits bounced 42 per cent to £15.7m in the 12 months to March. Boohoo said it has 4m active customers, a 34 per cent increase on the previous year. The balance sheet was weighed down, however, by the group’s payroll, which jumped almost 50 per cent to £23.5m.
Investment: Listed on AIM March 2014
1. Boohoo said it planned to target further growth in Ireland, France, Australia and the US.
Boohoo profit nearly doubles on rapid overseas expansion | Conor Sullivan, FT. April 26
2. revenues rose 51 per cent to £295m in the year to February 28. Pre-tax profits increased 97.4 per cent to £31m. Excluding PRETTYLITTLETHING, an online retailer in which it acquired a controlling interest for £3m, and NASTY GAL, a US brand it bought out of bankruptcy for $20m, revenues rose 45 per cent to £283m. Non-UK revenues accounted for 38 per cent of the total.
3. Carol Kane said marketing deals with “social influencers”, and the company’s “test and repeat” model of frequently updating and trialling products in small batches had driven performance. .... platforms such as blogs, Snapchat or Instagram to promote its products. Ms Kane said about half of Boohoo products were made in the UK, with 100 products introduced every week.
4. US revenues for the main Boohoo brand rose 119 per cent at constant currencies.
5. The company’s shares have risen 269 per cent over the past year, giving it a market capitalisation of £2.1bn.
Fast-fashion chain Boohoo almost doubles sales in 2018 | Naomi Rovnick and Jonathan Eley, FT. April 25, 2018
5. ...reported pre-tax profit of £43.3m for the year to February, up 40 per cent on the previous year. Revenue was £580m, almost double last year’s £295m. That growth partly reflects the acquisition in 2017 of PrettyLittleThing, a company started by co-founder Mahmud Kamani’s son, and US-based Nasty Gal.
Boohoo said it now has 6.4m active customers, a 22 per cent increase on a year ago. ....expect 35 to 40 per cent sales growth for the year ahead. Boohoo shares are down almost two-fifths since its half-year results in September 2017. Mr Kamani and Ms Kane have both sold stock over the past year.
6. ....plans to construct a new UK warehouse at a cost of £150m. It raised £50m of fresh equity in a placing last year to help fund the project, and PrettyLittleThing is also moving into its own warehouse. Boohoo said this new capacity will help it develop a distribution network capable of generating £3bn of annual net sales globally.
Tears in the boardroom at Mahmud Kamani's Boohoo | Sam Chambers, The Sunday Times. March 10 2019
7. Last September, Boohoo.com announced that Mahmud Kamani would relinquish his role as joint chief executive. When the changes come into effect on Friday, the 54-year-old will become executive chairman of Boohoo. John Lyttle, formerly chief operating officer at Primark, will join the company and slot in beneath him as chief executive. Boohoo’s non-executive chairman, Peter Williams, 65, who once ran Selfridges - who will step down in the reshuffle - indirectly criticised Kamani for lining up Lyttle — a long-standing associate — without other candidates being assessed by headhunters.Co-Founder, Carol Kane, 52, will remain an executive director, with a focus on creativity.
8. ...sales almost doubled to £580m in 2017 and the company is expected to report a further leap to about £835m for last year. Shares have risen by 250% since its 2014 float. In the six months to last August, Boohoo delivered 7.2m orders — up 13% on the previous year. PRETTYLITTLETHING, a sub-brand created by two of Kamani’s sons, handled 6.5m orders, an increase of 127%, and NASTY GAL, another sub-brand, reported a 163% increase to 500,000 orders.
9. MERIAN GLOBAL INVESTORS, Boohoo’s largest shareholder, which holds nearly 17%, just ahead of Kamani’s 16% stake.
10. Boohoo’s rapid growth and bargain prices are putting its business practices under the microscope. ...environmental cost. Because customers can buy a dress for less than £5 and a pair of jeans for £10, many of the clothes it sells will not get many outings. It is estimated that 50 lorry loads of clothing go to landfill every day in Britain MPs want retailers to pay a penny per garment sold to fund a recycling scheme.
THOMAS SABO: takes a shine to London for expansion plan | Joanna Bourke, Evening Standard. April 28.
Business: retail jewellery firm with 10 stores and concessions in London. Turnover was boosted by customers buying Love Bridge bracelets and getting them engraved.
ICB Classification: 5371 Apparel Retailers
Founder: German brand.
Staff: Jon Crossick, managing director of the UK business
Financials: 3% sales growth to £25m at Thomas Sabo UK in the year to June 30
News: is on the hunt for 3 new stores in central London over the next two years. Interested in locations near Crossrail stations and wants to open on the King's Road in Chelsea, which may benefit from a potential Crossrail 2.
5553 Broadcasting & Entertainment
3577 Food Products
8777 Investment Services
5757 Restaurants & Bars
5371 Apparel Retailers