Tuesday, 10 July 2018

Daisy Green back on Crowdcube with the same old misinformation as always

Despite their best efforts to make you believe the contrary, Daisy Green are not anywhere close to their 2015 Crowdcube Bond projections. Of course they dont tell you that now.

It is the same old same old and it always gets the same reaction. Daisy Green have already burst through their fake funding target of £500k and had exceeded £1m before it went public. That looks like a huge success at a valuation of £18m.

But if you look a little closer, cracks appear. The company projected years 2015, 2016, 2017 and 2018 would all be profitable  - they were not (2018 is still unknown). So the 2015 figures given in the Crowdcube pitch were historic and showed a profit of around £40k. The company actually made a loss when these accounts were filed. This fudge is now so common on Crowdcube I suppose it is the norm - but it shouldnt be. 

Losses for year ending April 2017 were ~£500k. The company sold its bond to Crowdcube investors with a 2017 profit of £300k. Hey so what! Well the point here isnt the gap but its the complete lack of recognition that it exists.

One other trick they try and lay out in this new pitch is the mirage that they paid off this Crowdcube Bond early, out of profits. They didnt. Of course they dont claim they did but the way it's worded, as some sort of huge success - paying it off 2 years early - makes it appear like it is. In fact they had to borrow (at a better rate) to pay it off - thereby stitching up Crowdcube investors who expected another 2 years of interest. 

As always on Crowdcube, things are not what they seem. The company may go on to some success but I just hate the way this information has yet again been manipulated in order to obtain more money. Where is the integrity?

Looking over their figures they have been manipulated to make a best case and they totally ignore key numbers that would give investors a true picture of the situation. But then investors really should be looking for these numbers anyway. 

For me this has a similar ring to it as Sugru did. Asked why they are now selling equity when they repaid the bond early, the answer from Daisy is less than convincing. What if, as in the Sugru case, the bank loan Daisy has is under pressure (£500k loss last year is not what was planned). You have seen it once, well this might be a repeat. Worth asking before you throw your cash at it. 

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