Planet Organic

Funded 13 Nov 2022

£6,250,000 target

£6,988,984 from 0 investors

Business overview

Location	London, United Kingdom
Social media
Website	www.planetorganic.com
Sectors	Food & Beverage Mixed Digital/Non-Digital B2C
Company number	03826282
Incorporation date	16 Aug 1999

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Investment summary

Type	Equity
Valuation (pre-money)	£30.2M
Equity offered	17.16%
Share price	£0.6
Tax relief	N/A

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Business highlights

We were the first organic supermarket in the UK
Annual turnover of circa. £44m**
13 Locations: Henley store recently opened
New distribution centre established to improve efficiency

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Key features

Secondary Market
Seedrs nominee min. £10.20 +
Direct investment min. £25,000.00 +

Idea

Introduction

For 27 years, we have been leading from the front providing high quality food, health and wellness products for the customers and communities we serve. We are privileged to be in a position where we are loved and trusted by our customers, both in store and online.

We pride ourselves in stocking innovative brands and giving founders a springboard into the world of retail. We are always on the hunt for new and exciting products from all over the world, bringing the latest healthy food and wellness concepts to our customers.

We want people all over the UK to discover better. Better products, with better ingredients, which are better for them, the planet and their communities.

Substantial accomplishments to date

We have expanded to 12 locations in London and, on 28 October 2022, we opened our first store outside the capital in Henley on Thames.

We are revolutionising the way we do business and have recently opened a brand-new distribution centre. This will see us reducing from over 150 deliveries per store per week to one daily delivery to each store.

Since the arrival of George Dymond as CEO in December 2021, our drive towards profitability has been addressed in the following ways:

• We closed three loss making stores
• Store revenue has improved with average sales per store per week now at £67.8k, an increase of +8.7% v the same period in 2021*
• Cost to serve online has reduced by 3% mainly through reduction in the cost of packaging and delivery

We see our sustainability credentials as industry leading:

• We are the largest chain of Soil Association accredited shops in the UK
• We got rid of plastic bags 8 years before the UK plastic bag tax
• We are the first zero edible food waste retailer
• We were pioneers in offering refillable organic essentials
• All takeaway food containers, juice & coffee cups are compostable and recyclable

George has spent the last year assembling an experienced team to drive this transformation forward making key executive hires in Commercial, Marketing, Digital, Property and HR.

*Average sales based on Sept-Oct 2022. Comparison data is based on Sept-Oct 2021. Based on unaudited management accounts.

Monetisation strategy

We generate revenue from our physical stores and our online business through 3 categories: grocery, food to go and beauty & wellness.

Unlike many of the brilliant start-up companies on this platform, we are an established business with 27 years of experience in our sector. We currently have a turnover of circa £44m**. We now plan to expand in the UK by opening more stores to unlock efficiencies in our new supply chain and drive the business towards profitability.

We believe that the trust our customers have in our brand underpins the success of our business. To capitalise on this, we have accelerated the roll out of Planet Organic branded products with the launch of our own range of supplements, coffee and many other exciting products.

We are constantly looking to increase our reach by improving footfall in our stores, working within our local communities and building our following online to increase our customer database.

**Based on unaudited management accounts.

Use of proceeds

Given that this year British consumers are forecast to spend £487 per head annually on wellness, we believe we are extremely well placed to bring Planet Organic to more consumers. Join our planet as we continue our expansion plan, aiming to have 20 stores across London and the South of England in the next 12 months and 50 stores over the next three years. This campaign forms the next step in our overall fundraising plan, through which we intend to raise a total of £10M to unlock the next stage of our exciting expansion plans.

Put simply, investing in Planet Organic through Seedrs will help us to build out our store opening plan as quickly as possible and, in turn, enable us to invest in more fantastic colleagues, brands and communities.

Key Information

Valuation:

The pre-money valuation is based on fully-diluted share capital which includes the following:
● Issued ordinary shares = 46,742,705
● G shares = 1,400,000
● Freezer shares = 800,000
● Ordinary shares to be issued to Howard Tenens as part of the warehousing and logistics agreement = 1,341,771

Details of these share classes are below.

Share classes:

The company currently has four classes of shares, Ordinary shares, G shares, Freezer shares and Deferred shares. All investors in this round, including Seedrs investors, will be receiving Ordinary shares. The Ordinary share class is the only share class which has a vote and a pro rata right to a dividend.

G Shares are growth shares that are awarded to management for incentivisation. They convert to Freezer shares if the employee leaves as a good leaver or to Deferred shares if they are a bad leaver.

Deferred shares will only receive the nominal value of each share on an exit or liquidation event, being £0.001 currently.

G Shares are attributed a 1st Threshold Price and a 2nd Threshold Price at the point of issuance, which are carried across to the corresponding Freezer shares on conversion. This determines the hurdle share price at which G shares and Freezer shares can participate in proceeds on an exit or liquidation event.

Existing G shares and Freezer shares issued each have a 1st Threshold Price of £0.591 and a 2nd Threshold Price of £1.4775.

Freezer shares are attributed a “Market Value Price” at the point of conversion (being the date of termination of employment). The company currently has 800,000 Freezer shares in issue with a Market Value Price of £0.75. This impacts the proceeds Freezer shares will receive on an exit or liquidation event.

On a liquidation or exit, the proceeds will be distributed as follows:

First, holders of Deferred shares will receive the nominal value of those shares.

Secondly, holders of Freezer shares will receive a preferential distribution, calculated as follows:

1. If the Market Value Price of a Freezer share is equal to or more than the 1st Threshold Price but less than the 2nd Threshold Price, it will entitle the holder to the difference between the two prices. The current Freezer shareholders would therefore be entitled to £0.159 per share (being £0.75 less £0.591).

2. If the Market Value Price of a Freezer share is higher than the 2nd Threshold Price, it will entitle the holder to 2x the difference between the 2nd Threshold Price and the Market Value Price, plus the difference between the 2nd Threshold Price and 1st Threshold Price. This currently is not applicable to any of the existing Freezer shares.

Thirdly, for G share holders:

1. If the Exit Price (being the total proceeds divided by the number of issued ordinary shares of the company) is less than the 1st Threshold Price (currently £0.591), the relevant G shares will receive nothing.

2. If the Exit Price is greater than the 1st Threshold Price but less than the 2nd Threshold Price, the relevant G shareholders will receive, in respect of each G share, the difference between the Exit Price and the 1st Threshold Price.

3. If the Exit Price is higher than the 2nd Threshold Price, the relevant G shareholders will receive, in respect of each G share, 2x the difference between the Exit Price and the 2nd Threshold Price, plus the difference between the 2nd Threshold Price and 1st Threshold Price.

The remaining proceeds will then be distributed pro rata amongst Ordinary shareholders.

Material Debt:

The company has the following outstanding loans:

1.£4,552,081 CIBLS Loan from Triodos Bank at an interest rate of 3.742% per annum. The loan was entered into in August 2020 and is to be repaid by August 2026. The loan has a debenture over Company assets.

The funds raised from this investment round will not be used to repay this loan.

Balance owed to Wholesaler:

One of the Company’s principal wholesalers went into administration on 22 August 2022. The current credit balance owed by the Company to this wholesaler is £192,959.25. The Company is paying the administrator the balance owing in instalments of £50,000.00 per month due to the disruption caused to the Company’s business.

Corporate Structure:

Investors in this round are investing into and will become shareholders of Planet Organic Limited, 03826282. The Company has one wholly-owned subsidiary; As Nature Intended Limited, 03824881

Investor Perks

Please note that any discounts, rewards and/or offers listed by a company in its campaign are subject to the terms and conditions applied by that company. It is the company’s responsibility to honour such discounts, rewards and/or offers and Seedrs does not take any responsibility for them.

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