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Overhang Drinks

Platform:
Crowdcube
Stage:
Expansion
Industry:
Food & Drink
Location:
UK - South West
Date Rated:
14/09/17
Raise:
£150,000
Equity:
5.66%
Valuation (Pre Money):
£2,500,177
Industry: Food & Drink
Location: UK - South West
Platform: Crowdcube
£150,000 Expansion
Valuation: £2,650,177
Date Rated: 12/09/17

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: EIS

Business Summary

Overhang Drinks is a non-alcoholic soft drink company producing drinks low in sugar enriched with multi vitamins and unique botanicals. Overhang Drinks is already listed in over 1k stores nationwide and has sold over 175k drinks since inception. This round of investment will be mainly used to fund the marketing campaign and hire sales and marketing staff.

Financial Overview

Dec-21
Date (y/e) Dec-17 Dec-18 Dec-19 Dec-20 Dec-21
Sales Dec-17£91,411 Dec-18£737,151 Dec-19£2,027,164 Dec-20£4,561,119 Dec-21£7,981,958
Gross Profit Dec-17-£8,321 Dec-18£229,360 Dec-19£707,174 Dec-20£1,613,155 Dec-21£3,083,431
GP as % sales Dec-17-9% Dec-1831% Dec-1935% Dec-2035% Dec-2139%
Overheads Dec-17£86,229 Dec-18£333,464 Dec-19£459,523 Dec-20£763,328 Dec-21£967,942
Operating Profit Dec-17-£94,550 Dec-18-£104,104 Dec-19£247,651 Dec-20£849,827 Dec-21£2,115,489
OP as % sales Dec-17-103% Dec-18-14% Dec-1912% Dec-2019% Dec-2127%
Closing Cash Dec-17- Dec-18- Dec-19- Dec-20- -

Note: This financial information has been sourced from the company on 12/09/2017. Financial data is NOT verified by Wheatfromchaff Ltd.
57%
SKILLS:
EXPERIENCE:
COMMITMENT:
Although the management team is complete with every key role covered, further marketing and sales capabilities will be needed to help the company scale.
Although this is the Founders' first venture and they lack commercial experience, the team has relevant industry knowledge and will be supported by an experienced industry advisor.
The Founders, family, and friends have invested £362k into the business and the Founders have been full-time for over three years.
54%
MARKET:
PRODUCT:
COMPETITION:
The UK soft drinks market is worth over £15bn and the beverage industry is experiencing major changes with consumption shifting to healthier refreshments.
Although the product is already listed in over 1k outlets mainly from major retailers, there are not many supportive testimonials to date.
The market is becoming very crowded with many players offering healthy drinks but the company aims to compete with its '100-year-old' family recipe to differentiate the product.
53%
PROFITABILITY:
CASHFLOW:
RETURNS:
The marketing budget seems low to achieve the projected sales growth, however outsourcing production should allow the company to keep tight control of its overheads.
There is insufficient information available to fairly rate this aspect of the business
The valuation seems very high given current sales. However if the product does gain traction and even half of the forecast revenues are achieved, a fourfold return looks feasible on exit.


Conclusion

The company has a contracted packaging partner that can provide scalability if required, and this round of investment intends to strengthen the sales and marketing skills to promote the product and increase listings. Therefore, the company has the capacity to grow rapidly if the spending in sales and marketing can be sustained.

Overhang do not appear to have any additional products in development: we are concerned however that the company may be hard pressed to sustain their sales growth and protect shelf space allocated to their single "pick me up" drink from much larger competitors, who will doubtless seek to copy it.

We do not know the current company's cash position, but this year's projections show losses of £94k and next year's losses are expected to be over £100k, yet the company is only raising £150k. It would be reassuring if the company could explain how this gap will be covered.

Related Links

Crowdcube Pitch

overhangdrinks.com

 

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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

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