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Stockwood Community Benefit Society

Stockwood CBS - 2018 Withdrawable shares - OFFER CLOSED

£100 minimum

All investments and commercial activities carry risk. Therefore shareholders should consider carefully whether Stockwood CBS withdrawable shares are a suitable investment for them in light of their own personal circumstances, take appropriate advice and make their own risk assessment.

Supporting the community purpose of Stockwood CBS should be the primary motivation for investment and investment in the Society should be seen as a long-term social and environmental investment.

An investment in Stockwood CBS is an investment in a trading business and is not a loan or deposit. Depending on the personal circumstances of the shareholder and the proportion of assets they are considering investing, it may be inappropriate to invest savings in Stockwood CBS.

In addition to the usual risks associated with investment in any business, the following risks should be carefully considered before investing. Although the Directors will seek to minimise these risks they could result in a negative effect on the operating results and cash flow of the Society and may affect the ability to pay interest and return the original investment. The risks outlined below are not exhaustive and there may be other risks of which the Directors are not aware.

General investment risks

  • The money you pay for shares is not safeguarded by any depositor protection scheme such as the Financial Services Compensation Scheme (FSCS).
  • This Share Offer is exempt from regulations under the Financial Services and Markets Act 2000 and the Prospectus Regulations Act 2005 and therefore you do not have the protection provided by these acts. This means that there is no right to complain to an Ombudsman; and this share offer has not needed to be approved by an approved person under the Act.
  • The shares are not tradable and the full value may not be returned if certain of the risks described below were realised.

Operational Risks and Mitigations

Decrease in demand for the business units due to external factors or changing trends.

  • Ongoing monitoring of local market conditions, wider market trends, changes to economic conditions, government policies and other external factors that might impact on future demand for business units.
  • Ongoing marketing of the business park to a diverse range of rural SMEs.
  • Development of infrastructure including modern IT systems for better offer and value to tenants.
  • Development of additional sources of renewable energy to increase revenue, diversify income, increase sustainability and reduce costs

Rise in rent defaults which might result from economic recession impacting on small businesses.

  • Maintaining a professional property management service which is proactive in building and maintaining tenant relations, so that potential payment issues can be identified early and appropriate action taken.

Conflicts of interest arising from family relationships (Parsons family rent Rush Farm) and responsibilities (Chris Burdett is Chair of SCBS and works for Rush Farm).

  • Arms-length commercial relationship between SCBS and Rush Farm.
  • Conflicts of interest policy.

Commercial risks and Mitigations

Changes in government legislation could affect income from Feed In Tariffs and Generation Tariffs.

  • Once each system is installed and registered, the tariffs are fixed over a period (typically 20 years) together with a yearly uplift based on RPI.
  • Stockwood will only invest where there is reasonable certainty over payback and returns.

Potential difficulties in gaining approval & planning permission for wind turbine, with some national and local opposition to onshore wind power.

  • Farm-scale wind turbines are less intrusive, have a long history on the UK landscape, and are normally given permission.
  • Electricity generated for use at Stockwood (i.e. “private” consumption at the Business Park) not sold/exported to the grid.
  • If not approved, Stockwood will advance plans for alternative Renewable Energy developments (e.g. solar, biomass, waste to energy).

Lower than expected yields from existing and future renewable energy developments, or equipment underperforming or failing.

  • Performance of wind and solar PV systems impossible to predict with certainty, but management has provided prudent estimates in financial forecasts.
  • Suitable maintenance contracts are in place, or will be arranged for new developments by management, alongside standard warranties and guarantees.
  • The projected mix of energy sources within the overall generation system (heat/cooling, solar, storage and wind) mitigates against a lower than expected yield, underperformance or failure of an individual element.

Potential difficulties with implementation and operation of new IT infrastructure.

  • Project management, Board oversight and close liaison with tenants during process.

Financial risks and Mitigations

Rise in interest rates which could affect the costs of capital, particularly any loans provided by a bank.

  • Seeking low margins and fixed interest rates on borrowing where possible.
  • Maximising community investment and ownership. The more equity raised, the less debt obligations SCBS will have, leading to greater returns and greater business stability.

Insufficient funds raised for all proposed renewable energy projects to be developed.

  • Stockwood has four planned energy projects (together estimated to require investment of £150,000) and will prioritise based on the improvement they will contribute to the generation mix and return on investment.

Not reaching target raise of £550,000: loans of £325,000 (incurring interest at 7.5%) not repaid/replaced with community shares (paying interest at 5%) affecting profitability of business

  • SCBS is currently meeting all financing obligations and expects to be able to meet these obligations in the future.

Please note

  • Community shares in Stockwood CBS cannot be sold or traded and there is no prospect that they will increase in worth beyond their nominal value.
  • Community shares are withdrawable on 180 days’ notice. SCBS will not pay back more than originally received for the shares.
  • Although shares are withdrawable, you may not be able to withdraw your shares if Stockwood CBS does not have sufficient funds available at the time you wish to withdraw them.
  • The value of your shares may fall.
  • In some circumstances the directors may need to write down the value of shares. Should you then wish to withdraw your shares, you will receive only the written down value of those shares.
  • As a Community Benefit Society, SCBS does not need to be authorised by the Financial Conduct Authority to take deposits by issuing these withdrawable shares. It is, however, registered with the FCA, no. 31920R.
  • This investment is not covered by any form of financial compensation scheme and
  • There is no right of complaint to an Ombudsman.

Offer Closed

 As of the 10th December 2018 this offer is closed

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