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Mon 13th Jul 2015 - Square Pie launches ‘pie bond’ on Crowdcube to raise up to £2m
Square Pie launches ‘pie bond’ on Crowdcube to raise up to £2m: Gourmet pie business Square Pie has launched a four-year ‘Pie Bond’ on crowdfunding platform Crowdcube, with a target of raising between £750,000 and £2 million to fund new restaurants and new products for the supermarket range – investors earn 8% interest. This year, the company is on track to hit sales of £5m, which will be an increase of 75% on 2014. In the last year, it has launched a branded range into supermarkets with listings in Ocado and Tesco’s, the opening of its largest site at the O2 in London in June, and a new restaurant opening in Birmingham in September. The bond will finance the opening of another five restaurants in 2016 as well as continuing to grow the supermarket and wholesale business. The bonds pay 8% interest per annum and will repaid in four years’ time. There are also rewards for investors ranging from a special Square Pie party for the first 100 to invest to birthday pie parties given to those who’ve funded the company to the tune of £5,000 or more. Founder Martin Dewey said: “Last year, 700,000 people enjoyed Square Pie food and, by issuing this Pie Bond, those fans can now get a slice of the pie for themselves by financing our growth and helping us take our fantastic food to more and more people across the country. I believe that everyone loves a great pie and now everyone can get involved via Crowdcube, who are definitely the go-to guys when it comes to crowdsourcing finance.” Square Pie operates six sites across London and plans to grow to 30 within four years. In 2014, restaurant sales grew by 16%. Each restaurant offers a range of freshly baked award-winning pies alongside other British classics such as jacket potatoes and sausage & mash. The company also operates at Wimbledon Tennis, Twickenham RFU and numerous music festivals including Glastonbury. The pitch states: “The 2015 financial year started really well with company sales up by 34% in the first six months compared to the same period in FY2014 and we’re on track to hit sales of more than £5 million by year end, an increase of 105% on FY2014. We achieved overall Company Ebitda margin of circa 6% in FY2014 and expect that to be the same in FY2015 due to our investment in our head office team. It’s been a great ride so far but we’ve only just begun and want to get to over 25 restaurants by the end of 2019, reaching sales of circa £22 million in FY 2019. This will be financed through a combination of the proceeds of this bond, a circa £1 million equity raise and internally generated cash flow. Our gross profit margins are projected to decrease from 44% in FY2014 to 33% in FY2015 due to the addition of the non-shop revenues which carry a lower margin than the shops. Going forward, gross profit margins increase to 37% in FY2019 driven by the addition of the new shops and we estimate that non-shop revenue will make up roughly a third of our total revenues. Our projections show exceptional expenses that relate to on-off shop pre-opening costs and financing costs. At the end of the 2014 financial year, the company had circa £63,000 of secured bank debt which is expected to be paid off by March 2018 and was originally taken out to invest in the shops and for working capital.”


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