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Po-Zu

Platform:
Crowdcube
Stage:
Expansion
Industry:
Retail
Location:
UK - London
Date Rated:
13/12/17
Raise:
£350,000
Equity:
14.89%
Valuation (Pre Money):
£2,000,571
Industry: Retail
Location: UK - London
Platform: Crowdcube
£350,000 Expansion
Valuation: £2,350,571
Date Rated: 07/12/17

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: EIS

Business Summary

Po-Zu is an award-winning ethical footwear company building a shoe brand using sustainable materials and avoiding harmful glues by stitching all the components together. Po-Zu has designed a wide range of products and has recently launched a co-branded collection under license with a major film franchise. This round of investment will be used to support operations and international expansion.

Financial Overview

Jan-22
Date (y/e) Jan-18 Jan-19 Jan-20 Jan-21 Jan-22
Sales Jan-18£916,835 Jan-19£3,144,602 Jan-20£5,470,001 Jan-21£8,077,992 Jan-22£10,879,694
Gross Profit Jan-18£432,514 Jan-19£1,845,944 Jan-20£2,963,725 Jan-21£4,495,711 Jan-22£6,072,462
GP as % sales Jan-1847% Jan-1959% Jan-2054% Jan-2156% Jan-2256%
Overheads Jan-18£607,472 Jan-19£1,702,708 Jan-20£2,346,012 Jan-21£3,041,306 Jan-22£3,772,340
Operating Profit Jan-18-£174,958 Jan-19£143,236 Jan-20£617,713 Jan-21£1,454,405 Jan-22£2,300,122
OP as % sales Jan-18-19% Jan-195% Jan-2011% Jan-2118% Jan-2221%
Closing Cash Jan-18- Jan-19- Jan-20- Jan-21- -

Note: This financial information has been sourced from the company on 07/12/2017. Financial data is NOT verified by Wheatfromchaff Ltd.
80%
SKILLS:
EXPERIENCE:
COMMITMENT:
The Founder has strengthened the management team with a Managing Director with expertise in brand development and marketing and a CFO will support them at this stage.
The founders have a deep understanding of the shoe industry and the extensive business development experience required to drive the company's international expansion efforts.
The Founder has been committed to the company since 2006 and there is a complete management team working full time.
76%
MARKET:
PRODUCT:
COMPETITION:
The eco-shoe market is worth £7bn and has shown rapid growth in previous years and Po-Zu intends to expand the coverage in the US market with the Licensed co-branded fashion footwear segment.
The company has a wide range of products and has a license to sell co-branded shoes from Star-Wars. Further potential franchises could provide material upside.
Although Po-Zu has a strong relationship with Disney and Lucasfilm, the license will expire in December 2018 but the business expects to extend this for another two years.
52%
PROFITABILITY:
CASHFLOW:
RETURNS:
Although Po-Zu is a bit behind versus the previous forecast, sales are growing rapidly and achieving a strong customer response, and the team aims to improve profit margins in the near term.
There is insufficient information available to fairly rate this aspect of the business
The Valuation seems reasonable and investors in this round could expect strong returns if the team deliver the challenging four year forecast.


Conclusion

Po-Zu has pulled together a strong management team and has unique partnerships and collaborations that should build further brand awareness and help gain leadership of the ethical footwear segment in the UK and the US.

Investors in this round should note that a minimum investment of £5k is required to secure pre-emption rights as another investment round is expected to accelerate growth, although the Founder has also stated that a share buyback may also be an option in the next round.

We have not been provided details of the commercial arrangement with Disney for the renewal of the Star Wars license at the end of 2018. These sales underpin the whole business plan so investors should make sure they are comfortable with them.

Related Links

Crowdcube Pitch

po-zu.com

 

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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

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