Justpark look set to smash their Crowdcube target in latest round of funding.

Justpark raised over £3.5m on Crowdcube in 2015. Now they are back for another £1.5m, although we expect the real target is much higher. So how does it stack up?

If you listen to the company, then its all going swimmingly. So let's not do that.

In 2015, they only gave historic figures for the financials expect for that year. Now again they only give historic figures, so a comparison is difficult. However, we do have one and that is for 14/15.

Revenue figures are spot on but its the gross profit and COGS that send out a more worrying message. Not of course a message mentioned in the current pitch.

COGS were £263k but actual COGS for that year were £371k. So that's a 41% increase in COGS for the same value of revenue. Gross profit likewise were £828k but were in fact £626k again on the same revenue - a considerable shift in GPM. The overall expenditure was below the expected level and this seesm to be as a result of employing fewer staff. This might in turn explain the high number of complaints at that time that the company couldnt be reached if there was a problem.

Now we do know that the company has had issues with service levels and this could explain the changes - but this is not explained in the current pitch. When companies ignore the obvious in an attempt to disguise issues, you have be a little worried. 

Our main problem with Justpark, apart from the above is that they have no real control over the service they offer. The spaces are owned and controlled by the public - who are nothing if not unreliable. The issue of arriving at your space to find it either too tight, full or simply not there, with the owner unavailable, is one that appears too often in negative reviews. So if, for example, you cannot get parked you miss the wedding or funeral you planned to attend. To be fair the reviews have improved in the last year. But unlike Airbnb, the transaction value is very low so space owners do not really care. Justpark do compare themselves to Airbnb, which is a mistake. 

So you have to ask can the company resolve this issue - clearly no as they have no control over it. 

So can they live with it and increase their revenues by enough to make some money ie profit? Can they keep the GPM steady and stop the rise in COGS and operating costs above the level it currently sits at, against increases in revenues? That's the key balance and they have a long way to go to get to BE.  Deals with Local Authorities and major property owners such as hotel chains will help - but may come as a discount to GPM.

The rest is for you investors to decide. 

We team up with Syndicate Room The Due Diligence Guide for Investors - out now for free

Well here it is - the new and only guide for investors in the SME market, explaining how best to carry out Due Diligence before you part with your cash. Download it for free here

The guide, written by this blogger and updated on line as new information comes to light, is a very quick but comprehensive help to carrying out DD. If you dont bother with the DD, then you are a fool. And you are not helping anyone. In doing a good job on DD you can help the company you are interested in and that in turn that will be a help to UK plc. The last thing we need is a whole raft of useless companies soaking up the investment offered by ECF. Anyone familiar with this blog will be aware of that!

We have called many of the failures that we now see - when they were pitching for your cash. Read this guide and it will help you do the same. Filled with examples (anon but real cases) it's a quick overview reflecting 35 years of business experience alongside one the UK's best ECF platforms.

Scruples Free GF Foods Director declared bankrupt

This is a name worth remembering - Stuart Richard Allister - the CEO of the now defunct Crowdcube success GF Foods.

The administration is still ongoing. What has been revealed by the work to date (Sept 2017) is the directors had outstanding loan accounts and '' a number of payments that the directors have made/owed indicate the amount could be substantial'. And that the accounts were in such a poor state that it has been extremely difficult to work out exactly what is owed to whom and where the money has gone.

The administrator goes on to say that his investigations have unearthed a number of things that make him think there are grounds for claims against the directors of the company.

The CEO has been declared bankrupt.

Crowdcube allowed these guys to use their platform not just once but twice to con people out of £345k. This is only part of the estimated £1.8m in unpaid debts that GF have left the administrator to sort out. Well done boys.

We have written about them before here warning of their record of lies and deceit when it came to the claims they were making on the Crowdcube platform. Unfortunately for some, they didnt listen.

Hats off to Grind

Grind's £750k Crowdcube completes in a day and goes into overdrive.

Grind appeared on Crowdcube in 2015 with a successful £1.3m bond. Whilst the projections then have not quite come to fruition now, they have certainly made progress. And the signing this week of SSP, the transport hub specialists, to help role out their branded Coffe bars in railway stations and airports, puts them them in a good position for the next few years.

Here is hoping that this is one company we can look back on and see how it was helped by ECF and made investors some money. Still a very long to go and using a 3 month run rate to state the revenue instead of much poorer real figures, aint great. But hell, its better than most. Expect more raises along the way.

Berrywhite launch downround on Crowdcube

Berrywhite took £293k off Crowdcube investors in 2014 at a value of £5m. Now they are back again for another £150k at a pre money value of £2.7m. 

Well at least that bit is open and honest. Oh wait, no it's not, we had to dig around to find that they had previously been on Crowdcube and at that value - its not mentioned in the pitch. Whats makes it worth £2.7m is highly questionable - it certainly is not the managements skills at sales projections!

So what else is not mentioned?

All the usual really - previous projections had the company making net profits of £1.675m for YE Dec16. They actually filed a loss of £220k. And so it goes on. Despite what they say in the current pitch, we hazard a guess that the 2016/17 turnover was around £600k when it was projected to be over £7m. So why would anyone believe anything they say?

Nothing really wrong with the product or the team. It's just that despite all the hype the former doesnt really sell very well. It would help if one could rely on the information they give out or have any confidence that Crowdcube bother to check it.

And do they think the 6p Sugar Tax is going to make that much difference? We dont. 

Crowdcube - watching a train wreck in slow motion.

We were sent this from Crowdcube's website - it pretty well sums up their value to the world...... We especially liked the references to this site as the place to find the real information!! Little Brew is still not closed. In light of the very recent Shaw Academy fiasco, we wonder if Crowdcube are now employing the sons and daughters of their interns.

From the CC discussion board about Little Brew...

 

EIS loss relief

lalsarin 3 months ago

9 Replies

Hello,

In the investor update in March 2016, Stu sadly confirmed that he was selling all of the brewing kit and would be evaluating the future of the business. A decision about this was to be made "several months". I have respectfully stayed silent waiting for a future announcement.

However, I have heard nothing in the last 16+ months. I do note that the company's accounts are over one year overdue. Can Stu either confirm that the company is to be wound up - which would allow loyal investors to claim loss relief from HMRC - or put out his plan of what is happening with the business?

While I am sympathetic to the struggles of the business and the stress that this brings, leaving this in limbo has simply mean that no one is able to move on. Investors have entrusted Stu with their money, and without his action cannot claim the loss relief that we are due. Please can we have a response asap.

R

ReplyReport

109%

View pitch

0 days left

lalsarin 3 months ago 

FYI, my emails to Stu have bounced and seem to be not in service. Perhaps Crowdcube staff could comment on this please?

Report

lalsarin 3 months ago 

For any other investors interested, Crowdcube are investigating. They are going to contact Stu and find it it where things stand. I'll update when I hear more.

R

Report

mtmale 1 month ago 

Any news?

I see that the compulsory strike-offs at Companies House were suspended in May 2017. If there is still some value to be had here, then let's hear about it

A bit of communication and corporate governance wouldn't go amiss

Report

lalsarin 1 month ago 

In a nutshell:
I emailed Crowdcube saying that the website and Stu's email were down. They replied saying that because the website and email were down, they couldn't get hold of him....

I then replied suggesting that they tried another method of communication, such as phoning him (surely they have his number?!), writing to him (his address is listed on companies house) or through social media (he has a LinkedIn account).

On 15 September Crowdcube replied saying that they have tried multiple methods of communication in the past but will try again. I have heard nothing back and have low confidence that CC will hear back or help investors by forcing through a wind-up or agreement of zero value with HMRC. Other crowdfunding models, with other investor structures, would be much more active in this.

Options for us now are:

1. Do nothing and wait.
2. Try to contact Stu directly. I will have a go at this when I come to do my tax return later in the year.
3. Agree with HMRC that the shares have negligible value, as allowed in EIS rules, and claim the loss relief.

Report

mtmale 1 month ago 

Thanks for your efforts. If you do manage to track him down, please let us know as he may be more prepared to 'engage' if he is contacted by a number of shareholders.

I quite agree re other crowdfunding models. I have stopped actively investing on here as the lack of portfolio management, communication and general corporate governance is too frustrating. Caveat emptor!

Report

lalsarin 1 month ago 

Mtmale, I'm exactly the same - I've stopped investing on this platform all together after a corporate governance disaster here ended in a successful criminal prosecution... I thought that was a bad once off, but then I started reading Rob Murray Brown's blog about this site...

Report

jcricket 3 weeks ago 

Same here. Quantock Breweries is also an interesting case...

http://fantasyequitycrowdfunding.blogspot.co.uk/2017/10/does-equity-crowdfunding-encourage.html

Report

jimbob2 18 minutes ago 

Hi,

From a past experience where I had an unlisted investment that went wrong, with a complete lack of information, I claimed for it to be of negligible value by briefly explaining the circumstances on my tax return and it went through fine. Bear in mind that if any future value arises (albeit unlikely) this then has to be declared to them.

Report

jcricket 53 seconds ago 

Interesting. Thanks Jimbob. Just a shame that Stu appears to have given up without wrapping up.

Rentify finally file accounts showing they are blushed with 'success'

Rentify helped themselves to £1.3m on Crowdcube, at a valuation of around £20m, last year. Their latest accounts to YE DEC16, filed late, have them technically insolvent with a large hole where projected further investment was promised.

We read recently that this blog is primarily for bashing Crowdcube. Well that only tells part of the story. All we do is follow the pitches that fund on Crowdcube - the news here is only 'bashing' because those are the real results these companies are producing. Unlike some others, we dont manipulate the numbers.

Back to Rentify. They made a £2m loss for the year, which is in fact better than the projected £3m loss. However the problem starts when you look at their funding. The £6m of new equity investments shown as coming in 2016 has not appeared and the company has so far in 2017 managed to raise not a penny.

We have warned about this type of thing on numerous occasions. Promises of future large funding events are more often than not a smoke screen for something well worth avoiding. The future of any business is entirely reliant on its liquidity. Rentify dont have any. The company has lost 4 of its Directors this year - another big red sign to stay away. One of them was Simon Grice who founded Ineed - another failed Crowdcube company.

Rentify is backed by Balderton Capital, one of Crowdcube's main backers. Any patterns appearing? Maybe they will shake their money tree once again.