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Crafty Nectar

Platform:
Crowdcube
Stage:
Expansion
Industry:
Food & Drink
Location:
UK - South West
Date Rated:
20/07/17
Raise:
£100,000
Equity:
14.29%
Valuation (Pre Money):
£599,790
Industry: Food & Drink
Location: UK - South West
Platform: Crowdcube
£100,000 Expansion
Valuation: £699,790
Date Rated: 19/07/17

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: SEIS & EIS

Business Summary

Crafty Nectar is an online craft cider marketplace enabling craft breweries to supply directly to retail customers and has already sent over 2250 boxes to date. Crafty Nectar plans to offer UK wide distribution for trade customers and this round of investment will be mainly used to launch this trade initiative, to fund the marketing strategy and to hire sales staff to support growth.

Financial Overview

Dec-20
Date (y/e) Dec-16 Dec-17 Dec-18 Dec-19 Dec-20
Sales Dec-16£65,619 Dec-17£85,777 Dec-18£376,984 Dec-19£917,652 Dec-20£1,693,243
Gross Profit Dec-16£7,237 Dec-17£18,781 Dec-18£143,421 Dec-19£466,609 Dec-20£1,031,526
GP as % sales Dec-1611% Dec-1722% Dec-1838% Dec-1951% Dec-2061%
Overheads Dec-16£7,030 Dec-17£38,542 Dec-18£83,764 Dec-19£143,890 Dec-20£238,396
Operating Profit Dec-16£207 Dec-17-£19,761 Dec-18£59,657 Dec-19£322,719 Dec-20£793,130
OP as % sales Dec-160% Dec-17-23% Dec-1816% Dec-1935% Dec-2047%
Closing Cash Dec-16£207 Dec-17£80,239 Dec-18£139,896 Dec-19£462,615 £1,255,745

Note: This financial information has been sourced from the company on 19/07/2017. Financial data is NOT verified by Wheatfromchaff Ltd.
53%
SKILLS:
EXPERIENCE:
COMMITMENT:
Although the Founders have the required skills to drive the business, the company will be very dependent on them, so further key roles in sales or marketing may be beneficial.
The CEO has limited management experience but he will be supported by a CTO with significant start-up experience and an advisor with a strong track record.
The management team has invested over £14k into the business and raised £18k of capital from family to date and the CEO will be full-time after investment.
57%
MARKET:
PRODUCT:
COMPETITION:
The UK Cider industry is expected to worth £3.7bn by 2019 seeing 10.8% growth in 2016. Crafty Nectar already offers UK wide distribution to help customers discover new craft cider brands.
The company has built a strong offering sourced from over 150 different independent producers, difficult to find in supermarkets and has few but mainly positive reviews.
There are already well-backed players in the drinks subscription industry but Crafty Nectar intends to differentiate itself by offering the largest listing of craft cider products.
67%
PROFITABILITY:
CASHFLOW:
RETURNS:
Although the exact marketing spend is undisclosed, the increasing number of sales staff in 2018 should drive the intended growth enabling healthy profit margins in the mid-term.
The company is building a solid pricing model with recurrent revenues and it has considerable headroom to protect against any revenue shortfall.
Given the SEIS tax scheme, if the team deliver the forecast, investors could expect rewarding returns in excess of ten-fold.


Conclusion

The team is doing a great job developing relationships with producers and showcasing their products, and providing an attractive "discovery" offering for consumers. It appears however that there is currently no ability on the website for customers to choose between these producers so more established players could compete by showcasing a wide listing of ciders giving the chance to customers to make their own selection.

Investors should note that the company will benefit from a lean overhead model with no warehouse costs that could help to scale sales rapidly if every member of the sales team can deliver the intended 15 new outlets each month.

It is important that the Founder clarify his recent announcement that he has been informed of a potential copyright infringement by a competitor as this could be time-consuming and costly to resolve.

Related Links

Crowdcube Pitch

www.craftynectar.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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