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Mon 6th Jul 2015 - Hotcha launches £1m mini-bond to become national takeaway chain
Hotcha launches £1m mini-bond to become national takeaway chain: Hotcha, the Chinese takeaway chain that operates ten stores across the South West of England, has launched a four-year mini-bond on crowd-funding platform Crowdcube, looking to raise £1m with 8% interest paid. It aims to become the first national chain of Chinese takeaways, aiming to open 22 more sites in the next three years. The company was set up by James Liang and Andy Chan and currently has former Domino’s executive Andy Emmerson serving as a non-executive director while fellow Domino’s executive Clive Mellor is operations director. Founded in 2011, it achieved circa £4 million turnover and Ebitda of circa £265,000 in the financial year ending 31 March 2015. In prior years, the company has accumulated losses of circa £2.3m. It estimates turnover will grow to circa £19 million by 2019 (financial year ending 31 March 2020) as a result of its site growth plan, with Ebit of £3,168,750. Ebitda margin is projected to grow from 7% in FY2014 to circa 20% by FY2017 as a result of higher volumes and improved productivity of our existing infrastructure. Net margins are expected to be circa 10% from FY2016. As of 31 March 2015, the directors had investments of circa £3 million in the company, made up of circa £1.1 million in equity and circa £1.9 in unsecured loans that bear no interest and have no fixed repayment date. Management does not intend to pay interest on these loans or to repay them during the life of the Bond. Additionally, the company had unsecured loans from third parties of circa £633,000 which it used to fit out existing sites. The pitch states: “We feel that there is a huge gap in the market for a national Chinese takeaway and delivery chain. We believe that the market is currently dominated by independent operators who rely on in-house chefs in order to operate. In our experience, this makes it difficult to roll out a national model which can offer consistently high quality food and service. However, we believe we have overcome this challenge by building our central production unit in Bristol where we produce all of the ingredients for our dishes to the exacting standards of our executive chefs, Mr Jiang and Mr Leong, who between them have over 50 years’ experience cooking Chinese food for the British public. As our ingredients are regularly delivered into stores pre-prepared, we are able to control the quality of our food, whilst at the same time allowing new team members to be speedily inducted into the preparation of dishes at store level. With this training taking only six weeks, we have the opportunity to roll out new stores at a rapid rate. Managing the skilled work at our central kitchen also provides us with more time to focus on training team members in-store to ensure that all dishes are freshly prepared to Hotcha specifications. This centralized process enables us to fully utilise our executive chefs ensuring that we have a strategic pipeline of new product development. Through experience we know that customers enjoy new dishes and relish variety which is why we put so much emphasis on new product development. Although Chinese food has been a staple of British cuisine for a long time, our chefs continually manage to surprise us with new and exciting dishes using a combination of both traditional and modern Chinese techniques and ingredients. Both chefs are brimming with enthusiasm, so much so that we have enough new dishes to see us through the next 12 months of product launches!” So far, eight investors have pledged £201,000.


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