Wednesday January 1st 2020

Hobbs £104.4m | Lotus £79.2m | Flying Vinyl | Streetdots | Look Fabulous Forever £1.75m | Snapchat | Aspinal of London £23.7m | Bango £2.6m | Gresham £17.2m

News about 9 UK growth companies and/or accelerators + turnover in the GRID marketplace, 8th - 14th January 2017:

HOBBS: on the block | Ben Harrington, The Sunday Times.
DZ profile: Hobbs Limited
Business: clothing and footwear brand. One of the Duchess of Cambridge’s favourite fashion store
Launched: 1981
Staff: Chief executive Meg Lustman was parachuted in three years ago after an emergency strategic review by chairman Phil Wrigley.
Financials: made a £1.4m profit on turnover of £104.4m in the year to last January
Investment: Buyout giant 3i - more than a decade of ownership,
News:

1. 3i is planning to offload the Hobbs chain for as much as £80m according to City sources. It is understood to be close to hiring the investment bank NM Rothschild to handle the auction. …is expected to book a loss on its £111m bet on Hobbs.

UPDATE: Suitor tries Hobbs for size as South Africa buys high street | Daniel Dunkley,The Sunday Times. July 2 2017.

2. FOSCHINI, the South African owner of high street brands Phase Eight and Whistles, has entered the race to buy womenswear retailer Hobbs. The Cape Town-based clothing giant is said to have tabled an early bid to buy Hobbs from its private equity backer 3i, as it looks to build on its growing base in Britain. The acquisitive company, run by chief executive Doug Murray, a 59-year-old Scotsman, has been hunting for bargains in recent years. It bought PHASE EIGHT two years ago and WHISTLES in March last year.
Sources said current offers had come in below an initial price tag of £80m, and that Foschini’s management had displayed reservations over meeting the asking price. A handful of mid-market private equity firms are also said to be in the frame.

The sale talks come as 3i trims its portfolio of British assets. The firm lost control of AGENT PROVOCATEUR in March as the lingerie retailer went into administration before being sold to FOUR HOLDINGS, a company controlled by Sports Direct tycoon Mike Ashley. 3i is expected to lose money on Hobbs.

LOTUS: pleads for cash after clocking up £41m loss | John Collingridge, The Sunday Times
DZ profile: Group Lotus Plc
Business: Car maker which builds the lightweight Elise sports car. Lotus remains one of Britain’s most famous marques. It won six Formula One drivers’ championships during its heyday in the 1960s and 1970s.
Launched: 1952
Location: Hethel, Norfolk
Founder: Colin Chapman
Staff: chief executive Jean-Marc Gales
Financials: Revenues fell 19% to £79.2m, accounts for parent company Lotus Group International showed. £41.2m loss last year followed a £45.3m deficit the year before.
Investment: owned by Malaysian automotive giant DRB-Hicom
News:
1. DRB-Hicom has reportedly been trying to sell the manufacturer. Its mainstay car-making division has failed to turn a profit since being bought by Malaysia’s Proton two decades ago.
2. Sales of its sports cars slowed in America and Europe - Lotus sold 1,607 cars in the year to the end of March, down from 2,015 the year before. Lotus blamed the most recent sales slump on the delayed launch of a new model, the Evora 400, in America. Revenue from the US plunged from £16.2m to £2.9m. However, Lotus said orders had since ballooned and it had added a clutch of new dealerships.
3. It received a £10m grant from the British government in 2013.
4. Gales, a Luxembourger whose career spans senior jobs at Peugeot, Citroën, Volkswagen and Daimler, has been slashing costs in an effort to revive the company. That has included cutting about 300 jobs from its 1,200 workforce, part of plans to reduce costs by 20%. Lotus said it has plans for new products up to 2020.

FLYING VINYL: Read all about it: the gifts that keep on giving |Emma Broomfield, The Sunday Times
DZ profile: Flying Vinyl Ltd
Business: subscription vinyl records. It has won several thousand subscribers paying £20 a month to receive a box of five exclusively pressed 7in vinyl records by upcoming indie artists. company exports to America, Canada and Asia. The service is also promoted via Flying Vinyl’s music festival in London.
Launched: 2015
Location: Hertfordshire
Founder: Craig Evans, 30
Staff: 17
News: ….feedback has shown subscribers like the element of surprise. “There are competitors but most just repackage music. We press our own records. You can’t walk into a shop and buy these; when they’re gone they’re gone, and we like to think that makes us different enough to stay ahead.” …we’re offering something a bit different, while paying the artists a royalty,”

STREETDOTS: Seed capital comes to London start up that helps street food traders set up shop | Tracey Boles, City A.M. January 9.
DZ profile: Street Dots Ltd
Business: street trading sector. StreetDots works with major landlords - such as Land Securities, British Land and TH Real Estate - to open street trading pitches or 'dots' that can be booked by street food traders and other retailers via a one stop app. The technology handles rent, documentation and licensing liberating both parties from paper trails and admin. Each dot hosts a different trader each day bringing variety to local workplaces and communities.
Launched: 2014
Location: London
Founder: co-founder Atholl Milton
Investment: has secured £350K seed capital investment from private Singapore fund B.O.H LLC.
News:
1. StreetDots will use the funding to expand its network of dots from 30 to 70 by Spring and to introduce retail and restaurant brands to its network. It will also add more features to its technology platform as it gears up for a £4.5m Series A fundraising early this year.
2. B.O.H is headed by entrepreneur Laksh Vaaman, vice chairman of the Indian Motherson conglomerate. B.O.H’s other investments include iTutor, a New York based educational platform; League Apps American sports league management software, and British health tech firm Doctify.

LOOK FABULOUS FOREVER: The gran behind who became a £2m make-up star | Lucy Tobin, Evening Standard. January 9
DZ profile: Look Fabulous Forever Ltd
Business: make-up business for the over 55s. The brand is still growing fast. About a quarter of orders are from overseas, mostly the US and Australia, a skincare line is being contemplated, and Cusden has been commissioned to write a guide, Look Fabulous Forever Style.
Launched: 2013
Location: London
Founder: Tricia Cusden, 69-year-old grandmother-of-five superstar vlogger whose make-up tutorial videos — with names like From Day To Evening Glamour and Define Your Eyes And Lips — have amassed more than three million views. She has almost 20,000 YouTube followers.
Staff: six full-time, one part-time. Cusden’s two daughters run PR, stock and finances
Financials: Revenues hit £100,000 in 2014. A year later, a three-minute BBC Breakfast interview on New Year’s Eve helped Look Fabulous Forever to take £25,000 in eight hours. Turnover in 2015 was £500,000. Current turnover £1.75m.
Investment: while her two sons-in-law invested £20,000 each via SEIS, the Government start-up investment scheme. Four more backers have since collectively put in £110,000
News: After a family crisis, Tricia Cusden - with a three-decade spell as a training consultant behind her - quit retirement, trained as a make-up artist and found a cosmetics maker in Ipswich ..to make ..samples of make-up for older people …roped in friends and began testing them. By October 2013, the entrepreneur had sourced a line of products, built a website, made videos showing how the items work, designed a logo and packaging, and thrown a launch party. She initially invested £40,000 of her retirement savings. Three months after launch, Cusden was getting thousands of sales — and of YouTube views.

SNAPCHAT: establishes international HQ in Britain | Madhumita Murgia in London and Hannah Kuchler, FT. January 10.
DZ profile: Snap Group Limited
Business: Los Angeles-based mobile messaging start-up Snapchat
Launched: 2015
Location: Soho, London, since late-2015. Will open a new site nearby.
Staff: 75 staff, up from six people a year ago. Will hire additional employees, including a small number of engineers.
News:
1. Snap, the company behind Snapchat, has established its international headquarters in Britain, where it will book all sales made outside the US. The start-up, which has yet to turn a profit, is in the earliest stages of generating revenue outside the US and so is unlikely to have significant tax liabilities as yet.
2. “We believe in the UK creative industries. The UK is where our advertising clients are, where more than 10m daily Snapchatters are, and where we’ve already begun to hire talent,” said Claire Valoti, general manager of Snap Group in the UK.

ASPINAL OF LONDON: sales surge boosts bid hopes | Joanna Bourke, Evening Standard. January 13
DZ profile: Aspinal of London Limited
Business: luxury leather goods brand, which counts the Duchess of Cambridge as a fan. Aspinal, which has teamed up with Downton Abbey actress Michelle Dockery for a range.
Launched: 2001
Location: West Sussex
Founder: Chairman Iain Burton, who previously started one of the most successful record label companies of the eighties and nineties, Fanfare Records, and launched Simon Cowell’s career in the music industry.
Financials: said turnover reached £23.7m in the year to March 31, boosted by strong online and wholesale growth. But investments in new stores, including at the Royal Exchange, contributed to losses widening to almost £2.3m from £1.5m a year earlier. Sales are forecast to hit £28 million this financial year, with December trading up 35%.
News:
1. It plans to up store numbers from 21 to 30 by March 2018.
2. Advisers at PwC were hired in 2016 to explore the sale of a stake in the luxury retailer, which is valued at about £75 million. Investors from Europe and China have been linked with a purchase.

UPDATE:
Aspinal of London bags sales rise despite Harrods fiasco | Joanna Bourke, The Evening Standard. January 10, 2018

3. Turnover in the year to last March rose to £29.4m from £23.7m. Pre-tax losses narrowed to £782,426 from £1.6m. Online sales were 20% up on a year earlier.

4. ...on Wednesday shrugged off a Harrods IT glitch that caused its £800 handbags to appear for £8 online. Festive bestsellers included Lottie bags, which sell for up to £650, and men’s wallets.
5. New boss Lisa Montague praised performance at the new flagship in Regent Street St. James's. Montague joined in September from LVMH’s Spanish design house Loewe, and the website was upgraded after family investment office FOUR SEASONS bought a 20% stake in the firm.

Small-cap week: financial technology | Madhumita Murgia and Lauren Fedor, FT. January 14

BANGO
DZ profile: Bango Plc
Business: Mobile payments company. Bango make it easy to pay for digital content such as apps, games, music, video and software. Bango facilitates direct payments for mobile app stores including Amazon, Google, Samsung and Microsoft. This means mobile users can click to buy apps, or in-app add-ons and have the cost charged to their phone bill.
Launched: 1999
Location: Cambridge
Founder: Ray Anderson, CEO
Staff: CFO, Rachel Elias-Jones
Financials: Revenue doubled in 2016 to £2.6m, as customers increased their spending on mobile devices. It ended December with a £5.6mn cash balance. RNS: “The exit End User Spend (EUS) at the end of 2016 was £195m/yr compared with £67m/yr at the end of 2015, a growth of 191% year-on-year. Total EUS for 2016 was £132m compared to £45m for 2015. FY2016 EUS revenue was £2.4m, (FY2015 £0.84m), which is 1.8% of EUS. Revenue from platform fees was £0.2m (FY2015 £0.5m).”
Investment: 2005 - floated on AIM, London Stock Exchange. Main shareholders: Liontrust Asset Management (16.93%), Herald Investment Management (14.26%), Odey Asset Management (10.89%), Raymond Anderson (10.19%), Anil Malhotra (6.13%), Hargreave Hale (5.06%), Inflection Point Investments (4.82%), Richard Sneller (4.69%), Cavendish Asset Management (3.27%)
News:
1. Bango ended 2016 with the technical capacity to process more than $2bn worth of transactions through its platform, up from $1bn at the end of 2015.
2. In 2016, the company acquired rival BilltoMobile for £2.15m in cash (plus £350,000 in shares).

GRESHAM
DZ profile: Gresham Technologies Plc
Business: financial software company that serves banks, providing software that verifies and validates transactions, and maintains the integrity of sensitive financial data.
Launched: 1972
Location: London
Financials: said on Monday it expected revenues to rise 16 per cent year-on-year to about £17.2m for 2016.
Investment: Listed on the main market of the London Stock Exchange
News:
1. In 2016, it made strong headway in new markets such as the US. Last month, Gresham signed its first contract through its New York office with an unnamed US “tier 1” bank for its transaction control product.
2. October 2016 Gresham acquires C24 Technologies, a specialist in standards-based financial messaging and integration solutions.