Hambro Perks | Ten Entertainment Group £67.3m | C4X Discovery | Quantum Pharma | Redx Pharma
News about 5 UK growth companies and/or accelerators + turnover in the GRID marketplace 9th -15th April 2017:
HAMBRO PERKS: When Hambro met Perks: Meet the pair building some of London's best firms| Harriet Green, City A.M. April 10, 2017
DZ profile: Hambro Perks Ltd
Business: they describe themselves as a boutique advisory and investment firm and incubator, rather than a VC. “... we’re company builders.” The pair have their own balance sheet but no fund, instead helping businesses financially via family offices, private investors and corporates. In addition to focusing on finding firms that are capital light and which will apply technology to an opportunity, Hambro Perks looks for the ability to scale fast and cross-border: “the ability to internationalise is also something we’re particularly interested in,” says Perks. “We have a number of portfolio companies that are establishing themselves in the US. Most of our businesses are London-based. The talent we need and want to attract is European.” ...large room with 8 incubated startups
Portfolio: of almost 30 firms includes those that are creating entirely new categories, like WHAT3WORDS, which re-maps the world in three-metre by three-metre blocks. TOOTLE enables you to list your car (if you want to sell it) for free online, connecting you with over 2,000 dealers. UNBOUND, the crowdfunding publisher, and TAKUMI, which puts brands in touch with social influencers. ….Edtech, medtech –are both sectors they’ve invested in, co-founding app-based repeat prescription and medicine home delivery firm ECHO, along with digital textbook platform KORTEXT.
Location: London SW1
Staff: 30. All aged between 25 and 35
Founders: Rupert Hambro, 73, and Dominic Perks, 39. While Hambro has just seen SIPSMITH, the gin firm he’s been involved in for a decade, sold to spirits giant Beam Suntory, Perks came up with the idea for LAUNDRAPP, before bringing in a leadership team. Each had portfolios of businesses they were invested in: Hambro spent 25 years working for the family bank, Hambros, before becoming a chairman, and Perks, who’s ex-Morgan Stanley and McKinsey, started his portfolio after deciding he wanted to buy a business, taking out an ad in the FT and remortgaging his house to pay for the right one.
UPDATE: Rupert Hambro fuses old City and tech in ‘third career’ | Jonathan Ford, FT. May 16, 2017
1. ... looking to raise a further £15m to meet follow-on cash calls and take stakes in new opportunities. That means opening its capital to external private investors — those able to put in at least £250,000. Its firepower is magnified by a network of wealthy individuals and family offices. Co-investors have put £80m into its ventures over the past 18 months, and Hambro Perks is looking for another £120m over the next year.“
2. Has made investments in 21 mainly technology businesses since its founding three years ago. ...focuses on products that can disrupt large, established markets. Its investments include ... LABRADOR, which provides home smart meters that switch customers to the cheapest suppliers. In each case, Hambro Perks incubates and finances the venture — generally taking a minority stake of up to 40 per cent, although it can have a majority in some ideas it devises itself.
3. With ever tighter restrictions being piled on pension funds, wealthy private investors have been herding into investments that still offer tax relief, such as stakes in early-stage companies that come under the enterprise investment scheme. So far, Hambro Perks has invested mainly its own partners’ money, putting £6m into start-ups and taking rather more in “sweat equity”.
4. ...differences with conventional venture capital. Mr Perks’ preferred parallel is with Rocket Internet, a controversial if highly valued German internet company that repurposes US tech ideas for other markets. ....
TEN ENTERTAINMENT GROUP: Strike - Bowling company to float on the London Stock Exchange, following Hollywood Bowl's IPO in 2016 | William Turvill, City A.M. April 12
DZ profile: Ten Entertainment Group Plc
Business: The UK’s second largest 10-pin bowling operator, which operates 40 Tenpin centres across the UK,
Staff: Chairman Nick Basing; Chief executive Alan Hand
Financials: Sales rose more than a quarter in financial year ending December 2016 to £67.3m which contributed to a rise in adjusted operating profits to £17.6m from £10.2m the prior year.
1. will float on the London Stock Exchange main market tomorrow at a price of 165p and a market capitalisation of £107.25m. The company, which is floating 25 per cent of its shares to raise £26.8m, is being advised by NUMIS on the deal. After the listing, private equity investor HARWOOD CAPITAL MANAGEMENT will own around 69.4 per cent of the group’s shares, while the directors will hold 5.6 per cent.
Ten Entertainment to target London in bowling alley expansion plan | Jessica Clark, City A.M. 20 March 2019
2. ...is targeting expansion within London as the bowling alley chain looks to increase its presence within city centres and expand its portfolio of 43 sites by two to four centres a year. ....is considering establishing a presence in urban areas in a move away from its traditional focus on out-of-town retail parks. It will also consider building new bowling alleys rather than only acquiring existing sites. Has completed an acquisition of a site in Southport, the company announced today
3. chief executive Duncan Garrood joined the firm in December,
4. Total sales were up 7.5 per cent to £76.4m and like-for-like sales growth hit 2.7 per cent in 2018. Profit before tax up from £5.1m in 2017 to £8.1m last year, and earnings per share were 12.5p, up from 8p.
Bank net debt increased from £400,000 in 2017 to £4.2m last year, and cash flow from operating activities was £22.5m up from £17.5m the previous year.
5. ....is also planning to develop its food and drink offering with a focus on catering for local tastes, for example stocking a selection of London beers at bowling alleys in the capital, or Tennents lager in Scotland.
Small-cap focus: UK regions. The north of England’s life sciences industry is not for the faint hearted | Andy Bounds and Chris Tighe, FT. April 15
DZ profile: C4x Discovery Holdings Plc
Business: drug discovery and development company with a wholly-owned drug pipeline and develops molecules in partnership with pharma, biotech and academia. Its proprietary technologies include a tool that analyses genetic databases, and another that determines the 3D shape of drug molecules while they are still at the test-tube stage. It plans to license them to big pharmaceutical companies to take through clinical trials. It has made progress in potential treatments for Parkinson’s and Alzheimers. The aim is to innovate but outsource production and basic lab work.
Staff: Chief executive Clive Dix, 62, a veteran life science entrepreneur, co-founded vaccine developer POWDERMED and CONVERGENCE PHARMACEUTICALS
Financials: Analysts at Panmure Gordon predict £100m in revenue for the lossmaking company over the next five years.
Investment: spin-out from the University of Manchester. Flotation on AIM in October 2014. ...raised £7m in March, more than it had targeted, equivalent to a 22 per cent stake. The company is worth £31m.
Nimble biotechs become vital partners for large pharma groups | Sarah Neville, FT. December 1, 2018
1. recently sold a molecule to drugmaker INDIVIOR for $294m with an upfront payment of $10m. The molecule affects the receptor in the brain that controls cravings, holding out the promise of new treatments for addiction. The deal has helped to propel the company to revenues of £7.1m in the year to July 31, a sharp rise on £100,000 a year earlier.
DZ profile: Quantum Pharma Group Limited
Business: is a market leader in “specials” medication, which includes ointments, suppositories and eye drops.
…it came to Aim buoyed by excitement over the potential to grow by creating its own licensed products and by making acquisitions.
Launched: 2004. Began trading with a team of pharmacists and technicians at Tyne Metropolitan College on North Tyneside
Location: Burnopfield, County Durham
Investment: became Aim’s biggest pharmaceutical float of 2014 when it raised £106m. Its share price rose from 100p at flotation to a peak of 172p in mid-2015, but then slid amid growing worries about delays in its large pipeline of potential new products, partly because of the slower-than-expected pace of regulatory approvals. In November, the company completed a £15m fundraising.
1. Its new board — an entirely different team from that which brought it to market — has spent recent months refocusing and simplifying the business.
2. News in October 2016 that it had decided to close NUPHARM, a lossmaking contract manufacturing business acquired in mid-2015, contributed to a near halving of the share price in one day to 36.5p.
DZ profile: Redx Pharma Plc
Business: drug discoverycompany focused on cancer and fibrosis. ...took on several former employees of AstraZeneca and moved to its old site in Alderley Park. The company finds new drugs to fight cancer, immune system disorders and infections. But last month it announced it would only pursue anti-infective research with outside partners. A week later it won a $1m grant from an international public-private partnership to find new ways to kill drug-resistant bacteria. It has decided to focus more on development than basic research after finding possible new treatments for cancer.
Founder: Derek Lindsay
Staff: Neil Murray, chief executive
Financials: pre-tax loss of £15.4m for the year to September, up from £8.8m the year before.
Investment: listed on AIM in March 2015. Raised £12m in January, giving it enough cash to prepare for its first human clinical studies. Shareholders includeVC Jon Moulton.
1. has just dramatically restructured its business, making more than half its workforce redundant. Redx said it would cut staff by 86. Frank Armstrong, chairman, and two other non-executives are stepping down. The move should save approximately £4.2m.
Rise of electric vehicles casts shadow over British foundry | Kate Burgess, FT. May 29, 2017
2. ...shares in biotech hopeful Redx were suspended at 32.5p from the Aim after LIVERPOOL CITY COUNCIL called in the administrators. The half-year numbers — published shortly before the administrators arrived — ...showed pre-tax losses had widened to £10m and that there was £5m in cash left. But there was also a cash outflow of £3.7m covering an equity swap. This derivative contract was linked to an agreement with LANSTEAD CAPITAL to shell out up to £4m in cash over 18 months in return for shares.
Redx resurrected after near-death experience | Kate Burgess, FT. November 12, 2017
3. ...shares in the biotech group were reinstated on London’s junior market. .... into administration because it overspent, took its public sector support for granted and underestimated its obligations to backers.
4. So much could have been avoided if the board had paid LIVERPOOL CITY COUNCIL back in March, shortly after the company had raised £12m gross in a share placing. Five years ago LCC made a loan to Redx, then Liverpool-based. By March this year, Redx, having moved to Cheshire, was due to repay £3.5m to LCC. It did not do so. On May 24, realising the company had just £2m left in cash, LCC pulled the plug on Redx and called in the administrators.
5. By October the administrators FRP ADVISORY had sold Redx’s oncology business to Loxo Oncology in the US for $40m and paid off all Redx creditors. The job took four months and cost more than £11m. Aside from the £1m-plus administrators’ fees, the insolvency triggered immediate repayment of £9.7m in grants from the REGIONAL GROWTH FUND. The wind-up duo also honoured a termination clause in a share agreement with LANSTEAD INVESTORS, a business that makes its money from handing cash to cash-strapped companies on hard terms. That clause cost more than £600,000.
6. Neil Murray, former chief executive, has quit, leaving Iain Ross, chairman since early May, in charge of a business that has no liabilities and £13.6m in working capital.
7. Shareholders …. have lost millions since the business floated on Aim in 2015 at 85p, valuing it at £55m. With the exception of Lanstead, whose 10 per cent stake cost it almost nothing, those who paid 37.5p a share in February have lost half their money again.
Drug start-ups move out of UK’s ‘golden triangle’ | Sarah Neville, FT. February 15, 2019
8. Lisa Anson, appointed chief executive last year, cites a trial of an oncology drug on which it is working with the Christie NHS Foundation Trust, an internationally renowned cancer hospital in Manchester.
9. Redx is yet to generate revenue. At some point the group intends to partner with larger pharma groups to take its products to market.
10. With a market cap of just under £10m, Redx’s shares have dropped more than 53 per cent in the past yea ...following a temporary halt in recruitment for a clinical trial of its lead drug, after the first patient to be treated suffered adverse side effects. The trial is set to resume with patients receiving a much lower dose. Shares now stand at 7.5p.