Need some help? Close Help

BurningNight Group

Platform:
Crowdcube
Stage:
Expansion
Industry:
Food & Drink
Location:
UK - Yorkshire
Date Rated:
09/11/17
Raise:
£750,000
Equity:
3.61%
Valuation (Pre Money):
£20,025,623
Industry: Food & Drink
Location: UK - Yorkshire
Platform: Crowdcube
£750,000 Expansion
Valuation: £20,775,623
Date Rated: 08/11/17

MANAGEMENT

PRODUCT

INVESTMENT
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

Jul-20
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.
70%
SKILLS:
EXPERIENCE:
COMMITMENT:
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.
54%
MARKET:
PRODUCT:
COMPETITION:
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.
52%
PROFITABILITY:
CASHFLOW:
RETURNS:
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.


Conclusion

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

www.burningnightgroup.com

 

Right To Reply

Are you the entrepreneur? If you would like to publish a comment on our rating, please contact the ratings team.

Latest Forum Comments

Read All Comments

Disclaimer

The views and opinions expressed on this bulletin board are the sole property and responsibility of the author. Neither Crowdrating nor Wheatfromchaff Ltd, nor any of the directors or officers of Wheatfromchaff Ltd accept any responsibility or liability for them. Readers should be aware that comments do not constitute investment advice and may be inaccurate. Please seek to verify and take advice on all comments before relying on them in the context of any investment decisions you may make. if you wish to use the bulletin board please be aware you are accepting full responsibility and liability for what you write. Please look here for more specific rules we impose on people using our bulletin boards. We moderate all bulletin boards and we reserve the right not to publish your comments.

Disclaimer

Your capital is at risk when you invest in shares and debt securities. You can lose some or all of your money and may not be able to realise your investment. Therefore you should should never invest more than you can afford to lose. If in doubt about the suitability or tax implications of any investment, please seek independent financial advice. 

Information published on this website and any other reports or ratings published on CrowdRating.co.uk or by Wheatfromchaff Limited (trading as Wheatfromchaff) have been prepared by us in the United Kingdom for information purposes only. Wheatfromchaff Ltd is Authorised and Regulated by the Financial Conduct Authority FRN: 751017. 

No content on this website or on any reports or ratings published on this website nor any copy of it, nor any other reports or copies of them published on CrowdRating.co.uk may be reproduced, redistributed or copied in whole or in part for any purpose. Any and all reports have been approved by, and are being distributed in the UK and the European Union (EU) only and are not to be distributed in any other jurisdictions where their distribution may be restricted by law and persons into whose possession this or any other reports come should inform themselves about and observe such restrictions.

This report and any other reports published on CrowdRating.co.uk do not constitute an offer or a solicitation to buy or sell any securities referred to herein. It should not be so construed, nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. The information on this website or in reports or ratings published by Wheatfromchaff, or on which this or any other reports are based, has been obtained from sources that Wheatfromchaff believes to be reliable and accurate, and in accordance with COBS 2.4 of the FSA Handbook we have verified it to the best of our ability. However, it has not been independently verified and no representation or warranty, express or implied, is made as to the accuracy or completeness of any information obtained from third parties. The information or opinions are provided as at the date of this report or any other report publication dates and are subject to change without notice. The information and opinions provided in this and any other reports take no account of the investors/ individual circumstances and should not be taken as specific advice on the merits of any investment decision. Investors should consider any or all of the reports or ratings we publish as only a single factor in making any investment decisions.  

Wheatfromchaff does not accept any liability whatsoever for any direct or consequential loss however so arising, directly or indirectly, from any use of this report nor its contents. Investors may receive back less that they invested as investments may fall as well as rise in value. Investors should obtain independent advice based on their own circumstances before making investment decisions. By accepting this report you agree to be bound by the foregoing limitations.

The Ratings we publish have been approved and issued at Financial Promotions in the United Kingdom by Wheatfromchaff in the United Kingdom who is Authorised and Regulated by the Financial Conduct Authority FRN: 751017. Wheatfromchaff Limited registered office is Kilver Court, Kilver Street, Shepton Mallet, Somerset, BA4 5NF and telephone number +44 (0) 1749 347 577. Telephone calls may be recorded. VAT No: 214 0196 49

© Wheatfromchaff Ltd All Rights Reserved February 2017