Saturday, 9 February 2019

Gripit - back yet again asking for MORE.

Image result for more please

Gripit is a mystery. You would think that with Deborah Meaden as a shareholder and adviser, they would be able to get some sensible projections prepared. Well you would be wrong. Crowdcube investors in this new round really should take note of what they have failed to deliver so far, not what they promise for tomorrow. 

There is nothing wrong with the product. It works and people love it. It fulfils a need and it has traction. What could go wrong?

Well sales for starters. Gripit first funded on Crowdcube in 2016 and then again in 2017 - over £4m in total. Meaden joined the team in 2016 after a Dragons Den show. 

You could forgive the company for being over optimistic in 2016. And they were. But in 2017, with the wise old bird on board, you would hope that the numbers might be close to deliverable. But they were even worse. 

Without wanting to go into numbers for obvious reasons, Crowdcube investors really must ask Gripit about their two sets of projections and why they have not managed to get close to them. And we mean not close. Here is a clue - £19m £12m £2m. If I was to say to you that the the first number was predicted to be the last number you might think I was crazy. Even the second is a fair way off the last one. You can join the dots. 

They are the sort of projections and real numbers that would get you laughed out of the Den. And in this round the claim that the GPM is now higher than projected is simply not true.

Reasons are given for the shortfall belatedly in the forum but they dont really make sense. Claims that the housing market has taken a dive since 2016 simply are not backed up by the facts. New builds, which is what is being referred to, bottomed out in 2008/9 and have gown year on year since then. Now we may see a real drop with the mess this Government is making of Brexit but that isnt in 2017/18 as stated. 

Meanwhile the CEO has been purchasing and running another business - dealing in numbers plates so not exactly in the same market, which also used Crowdcube to raise capital.

And what of Brexit? If a company cannot project reasonably accurate numbers in peacetime, then with this large black blog on the crest of the hill, what chance is there? Imagine a possible response to this Q. Gripits are UK made so any exports would benefit from the falling pound. However the component parts are not all UK made  - is this ringing Brexit Bells? The company might state that their suppliers have stockpiled enough extra to cover them. But what is enough when the company cannot even sensibly project its own requirements for 12 months? Why would a supplier purchase and pay for extra bits on the assumption that Gripit will buy them as demand increases. Based on previous years demand has hardly increased and certainly not at the rate projected. The suppliers would go bust as they have paid for their extra stockpile but cant sell it through. 

We are not recommending Gripit or dishing it. Given time there is little reason to think it wont make something of itself. Just not along the lines that the CEO plans. All we are saying is take a careful look at what has been promised for 2 years and what has been delivered. At some stage there must be a credibility issue. Would it not be fairer to investors for this current raise to be open and honest and publish the last two sets of projections? Wouldnt that be a more democratic way for Crowdcube to do things - give investors all the information - not select the bits they think they can get away with.

Given this opportunity in the forum, it is shame that the CEO has not taken it.

We have written about them before here  .

Growth since 2015 has been slow. That is a fact. If you just read the latest pitch you would not know that. That's why we are setting up ECF.Buzz and why you all should be joining. If you want this information in the future that is. 

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