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Showersave

Platform:
Crowdcube
Stage:
Expansion
Industry:
Environmental & Ethical
Location:
UK - Northern Ireland
Date Rated:
28/11/17
Raise:
£300,000
Equity:
9.52%
Valuation (Pre Money):
£2,851,261
Industry: Environmental & Ethical
Location: UK - Northern Ireland
Platform: Crowdcube
£300,000 Expansion
Valuation: £3,151,261
Date Rated: 27/11/17

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: None

Business Summary

Showersave is a Waste-Water Heat Recovery ('WWHR') solution from Building Products Distributors Ltd ('BPD'), that allows homeowners to use waste shower water to pre-heat incoming cold water, offering up to 60% heat reclamation and helping users to save on their heating and electricity bills. Units are sold directly to the consumer or to homebuilders, with commercial developments a key target for expansion. These funds will be used to expand sales and marketing activity.

Financial Overview

Date (y/e) Oct-17 Oct-18 Oct-19 Oct-20
Sales Oct-17£908,286 Oct-18£1,157,501 Oct-19£1,831,274 Oct-20£2,679,953
Gross Profit Oct-17£547,777 Oct-18£680,931 Oct-19£1,063,098 Oct-20£1,519,168
GP as % sales Oct-1760% Oct-1859% Oct-1958% Oct-2057%
Overheads Oct-17£443,597 Oct-18£760,681 Oct-19£853,632 Oct-20£836,771
Operating Profit Oct-17£104,180 Oct-18-£79,751 Oct-19£209,466 Oct-20£682,397
OP as % sales Oct-1711% Oct-18-7% Oct-1911% Oct-2025%
Closing Cash Oct-17-£30,000 Oct-18£103,000 Oct-19£189,000 Oct-20£697,000

Note: This financial information has been sourced from the company on 16/11/2017 or from public sources. Financial data is NOT verified by Wheatfromchaff Ltd.
65%
SKILLS:
EXPERIENCE:
COMMITMENT:
The Showersave management team, with production outsourced to Q-Blue, covers all the key roles. Central members have almost 40 years of experience in the industry with BPD Ltd.
The team is highly experienced and the CFO's background in venture capital and the startup ecosystem will be an advantage come exit.
Most of the team appear fully able to commit to Showersave's success and they have been working together on the business for some years now.
64%
MARKET:
PRODUCT:
COMPETITION:
BPD Ltd, having been operating for 25 years, knows the market well and Showersave can help builders meet efficiency targets but the total market for such devices is relatively small.
Showersave is proven in thousands of installations with a nigh spotless record and has market-leading results.
There are a number of competing WWHR solutions available. Showersave has no patents but does have a head-start in terms of having surmounted regulatory and standards hurdles already.
50%
PROFITABILITY:
CASHFLOW:
RETURNS:
Showersave's detailed financial projections show a profitable company with a detailed awareness of the cost and profit centres, and some very reasonable growth targets.
There is a fair amount of headroom built in to guard against under-performance, and there are alternate revenue streams supporting the company.
We find the current valuation to be quite reasonable based on current sales but the modest growth targets ultimately limit the potential ROI for investors. The lack of S/EIS is a further negative.


Conclusion

Showersave is a proven product based on well established technology that BPD Ltd, an already profitable company, is well positioned to market to the home building industry. Unfortunately, even if national housebuilding targets are met, the market opportunity for these devices is relatively small.

With a number of competitors offering similar solutions and no defensible patents or IP in the product, BPD are having to rely on fact they have a head-start on securing the necessary regulatory and trade endorsements for the products efficacy. This combined with other proven revenue streams should provide some downside protection but the the potential ROI for investors may not be enough to justify the risk of investing. The absence of EIS benefits further compounds this.

Investors may also like to question the ~£90k difference between the £104k EBIT for 2017 in the financial projections, and the quoted £14k operating profit.

Related Links

Crowdcube Pitch

www.showersave.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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