Monday, 30 January 2017

Sad Tales from the Riverbank. What is happening down at River Cottage?


Crevated away amongst the dingley dells of the glorious South West, Hugh Fearnley Wittingstall's business has caught a bit of cold.


Achoo!

River Cottage will be known to most UK readers. Hugh FerWitt, the old Etonian, crusty loafed, food foraging founder, is a TV star and leading light in efforts to get us to pay more attention to what we eat and where it comes from. A highly commendable cause in our opinion.

Back in 2014, he went on Crowdcube to raise a £1m bond, which is due for repayment in 2019. 

Recent accounts to YE March 2016 report sizeable losses of over £600k. Operational losses of £557k are heading rapidly in the wrong direction . Accumulated losses are now just below the £2m mark. These losses were certainly not part of the prospectus put out by the company and Crowdcube in 2014. In fact the company was talking large numbers for its roll out of River Cottage canteens. 

Annual sales in 2014, we are told by the prospectus, had hit £4m in 2014, rising from £1.1m in just 3 years. The latest accounts have the revenues at only £4.4m - more than 2 years later. According to this document, existing canteens turned over an average of £1.3m pa. If this were the case for 15/16 then turnover would have been £5.2m. The stated plans were to open one new unit a year from the existing 2014 base of 3. Today they have just four open with an average turnover of just 1.1m. 

So something hasnt worked.

The last accounts show a negative balance sheet. No new money has been raised.

Now its very possible that they have turned this all around since April 2016. Although the lack of new openings suggest that maybe they havent?

No need for the 285 Crowdcube investors to worry though. Hugh has guaranteed to pay you back and he's old school - one of the oldest actually. Old E's are renowned for keeping their word - remember that recent has been delicious Dave, for example.

Pip pip.


1 comment:

  1. Yes, these mini-bonds secured against nothing were an excellent way to get finance at low levels. Compared to equity where he has to give away a significant proportion of his business, he can suffer 12%. If he has personally guaranteed it, then the family house should go. But I doubt he has as Crowdcube would never have asked him to.....These bond holders and in for one hell of a dip in the river...

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