This is a typical Crowdcube story. Lickalix Ltd raised £230k on Crowdcube in 2015. Things have not gone to plan. Pivoting has not produced profits and the company is now in deficit for £218k, up from £50k.
The notes to the accounts state that profits in 2018 will address the deficit. In the year a director's loan for £300k was issued so that covers the shortfall.
In 2015, the company had 'traction' in terms of sales of £40k - which is essentially no traction. The following year they projected revenues of £580k with profits and from here it was take off time. None of this has actually come to pass. Which is really no surprise to anyone with any experience in start ups. To drive sales from £40k to £580k in 12 months, Lickalix had a marketing spend of £60k. Then the following year they spent all of £120k to take sales to £1.25m. Both of these sums were based on real time cash generation which didnt materialise.
There is your problem - well at least one of them.
Recent pivoting into the baby food market with their Baby Cubes could be a solution - although it's a new product into a new market which is so much harder than keeping on those two variables constant. The traction is hard to gauge with low numbers of reviews on Ocado.
It is such a shame that a business with a good product by all accounts has, through a lack of knowledge, managed to dig itself quite a large hole. It remains to be seen if they can get out of it.
Ah Lickalix. I told him they were tasteless. Funnily enough that was the same night I met Solar Cloth, LuxTripper and GrubClub. I kept my wallet firmly shut. Soul Tree were also there - excellent wine, but who pays £35 in a curry house? Proof if it were needed that the only way to play this game is in person.
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