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BurningNight Group

Food & Drink
UK - Yorkshire
Date Rated:
Valuation (Pre Money):
Industry: Food & Drink
Location: UK - Yorkshire
Platform: Crowdcube
£750,000 Expansion
Valuation: £20,775,623
Date Rated: 08/11/17



Tax Status: EIS

Business Summary

Burning Night Group is a multi-brand bar operator focused on large premises located in major city centres. Burning Night Group already has six venues and has generated over £19m sales in the year to July 2017. This round of investment will be used to refurbish and open further locations.

Financial Overview

Date (y/e) Jul-16 Jul-17 Jul-18 Jul-19 Jul-20
Sales Jul-16£17,300,000 Jul-17£19,100,000 Jul-18£27,239,230 Jul-19£40,466,593 Jul-20£45,304,530
Gross Profit Jul-16- Jul-17- Jul-18£16,316,875 Jul-19£24,881,275 Jul-20£27,947,219
GP as % sales Jul-16- Jul-17- Jul-1860% Jul-1961% Jul-2062%
Overheads Jul-16- Jul-17- Jul-18£13,182,759 Jul-19£17,317,329 Jul-20£18,603,618
Operating Profit Jul-16£493,000 Jul-17£674,000 Jul-18£2,167,424 Jul-19£6,597,254 Jul-20£8,376,909
OP as % sales Jul-163% Jul-174% Jul-188% Jul-1916% Jul-2018%
Closing Cash Jul-16- Jul-17£355,729 Jul-18£307,240 Jul-19£5,591,500 £5,146,953

Note: This financial information has been sourced from the company on 08/11/2017. Financial data is NOT verified by Wheatfromchaff Ltd.
The core team members cover all the required roles and they have proven their skills rolling out the initial concept to six venues in major cities.
The management team has extensive experience in the licensed trade and significant knowledge of the leisure industry and they have successfully scaled the company and achieved break-even.
It seems that CEO owns less than 1% of the company, however all profits to date have been reinvested into the company and most of the team is full time.
The UK hospitality industry has seen rapid growth in the last decade and is worth about £73bn but without Government support, it is expected to fall in the next years.
Although there are mixed customer reviews about the service, the company has achieved strong commercial traction and the roll-out should increase its brand awareness further.
The company has a diversified brand strategy aiming to grab market share from a wide cross-section of consumers and is well located in major cities.
The business already is profitable and sales projections seem reasonable. If the team can control the overheads, healthy profit margins could be expected in the mid-term.
This round of investment provide enough cash to achieve break-even but there is limited headroom to protect against any revenue shortfall and the company is heavily indebted.
The valuation appears reasonable and if the team can deliver the plan, investors in this round could expect attractive returns, although the gearing does increase financial risk.


The management team has proven that they can roll-out the business successfully achieving strong sales and profitability. They have a clear plan for expansion but investors should note that a significant amount of debt has been taken on with £7.5m to be repaid or refinanced by July 2020, and any shortfall in sales at the new locations could lead to the need for additional equity funding or slow the company's intended growth significantly. Given the current company's strong position, the valuation seems reasonable but the level of debt will considerably increase financial risk.

Investors who expect to visit one of the sites should note that any investment, up to a maximum of £50, will be matched with a credit available to spend there.

Related Links

Crowdcube Pitch


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