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Mon 3rd Nov 2014 - Taylor St Baristas eyes £20m turnover with £3m bond
Taylor St Baristas eyes £20m turnover with £3m bond: Nine-strong coffee shop chain Taylor St Baristas, led by Richard Shaer, is planning to expand to 30 sites and circa £20m of turnover by 2020. It has issued a ‘coffee bean bond’ on crowd-funding website Crowdcube this lunchtime aimed at raising £3m to fund growth, although it is looking for a minimum of £1.5m. The bond pays 8% interest of a semi-annual basis over four years and follows in the footsteps of Chilango’s bond, which paid 8%, and River Canteen’s bond, which paid 7%. The first 50 investors get a free home barista course valued at £85. Those who invest £10,000 or more become members of the Taylor St Business Class, with a free coffee and cake for the lifetime of the bond or a bag of Taylor St coffee beans every month for the four-year life of the bond. The top five investors will be given the Taylor St Infinity Card, which provides a free coffee every day of the term of the bond. The company, founded in 2006 by siblings Nick, Andrew and Laura Tolley, has eight of its sites in London and one in Brighton – and sells one million cups of coffee a year. Proceeds will be used to open four sites in 2015 and six more in 2016. It will also allow the expansion of its training program and the sale of Taylor St-branded coffee and merchandise in-store and online. The company wants to add 21 stores over the next five years, bringing the total number to 31 by 2019, dependent on raising the full £3m. If it raises the lower amount of £1.5m it will seek to add four sites a year, growing to the lower number of 22 stores by 2020. It has a pipeline that includes one site in an unnamed major transport hub, a site at Canary Wharf alongside its existing site and two more that are city focused/metropolitan sites. The company said it did not want to open at the same rate as Harris + Hoole, also founded by the Tolley siblings, because it wants to retain its individuality as a premium offer. Site development costs range between £190,000 and £320,000. This year, the company’s unaudited accounts show turnover of £3,337,000 from nine shops, with shop pre-central overhead Ebida of £278,000 and actual Ebitda of £110,000, producing an overall loss of £276,000. Like-for-like sales rose by 14% between April and September this year. Between 2012 and 2014 it experienced relatively weak Ebitda margin averaging -1%. The company stated: “This reflects a period of consolidation, during which Taylor Street focused on the development and honing of its operations and proposition. During this time we invested in our central office capability. Whereas this investment in our central office now ensures we’re well-placed to exploit this next phase of new shop development, it also served to dampen our Ebitda around this time. However, as we grow our estate, we estimate that average Ebitda margins will increase to 16% between FY 2014 and FY2020.” The company forecasts that 30 sites in 2020 will produce turnover of £19,888,000 and shop Ebitda of £5,284,000, central Ebitda of £4,284,000 and pre-tax profit of £2,721,000. The Tolley siblings currently own circa 60% of the Taylor St business. The business raised £900,000 in equity from MTLS Ventures in 2013 – the investor holds a 9.91% stake in the business. It is expected that three unnamed existing investors will invest circa £214,000 in new equity by 1 December 2014 although there is “no formal commitment”. Three investors had invested a total of £12,000 an hour or so after the bond was launched.


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