In what is going to be the worst September's results for Crowdcube funded businesses since the platform started, one shining light stands out. We look at why The Clove Club has been so successful.
Since writing this the St Vibes has opened a third restaurant, Two Lights. They also seem to have facilitated the sale back to the company of shares issued through Crowdcube. Figures are a little complicated and not to be relied upon but SHs paid £500 and have received £625 per share back. Most of the 50 SHs did not take up this option. That is very interesting.
Amidst the carnage that is the YE end filing date of September, we can thankfully report that one company that funded with Crowdcube way back in 2012 is exceeding expectations.The Clove Club is now a two venue restaurant set up with the backing of £250k of Crowdcube investors money, in 2014. Real chefs and real hard graft have brought this idea to a very successful and sustainable reality. Instead of gallivanting around opening new sites in poorly chosen locations, this crew have concentrated on one, then two units and have made the most of it. For the YE Dec17, they posted profits of over £500k - the second profitable year in a row. In a market where we are constantly told by failed Crowdcube chefs that the market is sooooo difficult, the team at The Clove Club have cracked it.
There has to be a question about the ROI when we are looking at a two unit business. Or maybe not? Given its current profitability and the fact that investors bought in at a valuation of £1m, you would have to say they are sitting on a substantial real return. One that makes a mockery of the recent Go Henry and other so called Crowdcube successes. At the end of the year, the accounts report that St Vibes bought back 92 of its own shares for £625 per share. We believe that Crowdcube investors paid £ per share but find it hard to believe that anyone would sell at the £625 level on the back of this success.
You might also wish to query the structure of the company. Seeing as the management run it via a third company, Saint Vibes LLC, which charges St Vibes a fee - over £700k for YE Dec17 - up from £300k. But it does seem to work.
Unfortunately that is where the good news ends. We will be reporting on the more usual catastrophes over the next week or so. It is a mess.
It just goes to show that a real business, with real drive and genuine expertise, can make money for both the company and its investors, without scaling itself into oblivion. Why cant we have more of these less of the trash. We called this one way back - just saying.
Many and I mean many important people have told me many times that our analysis here isnt relevant. All companies have to miss projections - it is what they are for - Im told. Well if you needed evidence of the nonsense of that concept - here it is. You can read what we said about them in 2015 here.
Three cheers for St Vibes.
