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The Hive at de bees

Financial performance

To raise money to purchase the venue, The Hive will sell shares, with shareholders becoming members of the Co-operative. They aim to provide members a return on investment of 3% a year. 5% of capital is also available for repayment each year from year four. The minimum shareholding is £20 for Winsford residents and the maximum is £100,000.

Business Model

The main income of the Society will be from sales of tickets and admissions for events and programmed activity at the venue. A significant part of total income will come from the bar/ food concession revenue share agreement with CI (WV) Ltd. As part of its management of the day to day bar and food operations of the venue CI (WV) Ltd will collect the monies taken through the tills. The Society will receive 30% of the turnover as its revenue share with a ‘floor’ revenue share of £100,000 pa which the Society will receive as a minimum. The more successful the Society and CI (WV) Ltd make The Hive, the more income both will receive.

In 2017 and 2018 de bees turned over approx £350K whilst opening just Friday and Sat nights giving a revenue share of £105K It has been agreed that the minimum revenue share will be £100K.  Cornerstone Inns will pay the revenue share to the Society no later than the 7th day of the month following a month’s end.

Both partners have agreed on a revenue share as the most transparent means of revenue sharing. As CI (WV) Ltd uses electronic tills it is easy to be certain what has gone through the tills.

Capital

Capital Sought

Shares  £300k @ 3% interest from 2020

The minimum target of £180K from community shares is required to secure the purchase of de bees from owners EI Group but would not be sufficient to carry out planned renovation works from the off.

The Hive have have applied for investment from Big Society Crowd Match Fund. Under this programme, up to £100,000 is available to match applications for shares from the public that qualify for Social Investment Tax Relief (SITR) which The Hive Live has applied for. The Hive Live Limited is in negotiations to secure an equity investment from this programme for this offer. If successful, it would mean that for every pound invested by individuals (up to £100,000) another pound will be invested in matched shares so the Society could reach the ultimate target of £300K

Ideally they will reach £200K with this crowd fund and be successful with their application for SITR and bid with Crowd Match Funding for the additional £100K in order that the necessary budgets are available for renovation works to be progressed without delay. Otherwise further funding will be sought and works completed at a later date.

Loan  100 k - Already secured with Key Fund with conditions.  This is repayable over 10 years at £13,500pa including interest

Grants £50K - Already secured with Key Fund with conditions.  This is non-repayable

 

Captial Expenditure

Purchase Price £250k plus VAT

Initial Repair/refurb (Planned for July) £15k based on the full survey

Short term renovations (Planned for Aug) £55K

Medium term renovations /investment (planned for Oct) £120K

 

Profit and Loss

Profit & Loss
2019 -2020
2020 - 2021
2021 - 2022
Projected Income £337,425 £344,965 £363,310
Projected Expenditure (£425,837) (£305,276) (£305,459)
Pre-tax Profit (£88,412) £ 39,689 £57,851

Cash Flow

Cash Flow
2019-2020
2020-2021
2021-2022
2022 - 2023
2023-2024
Share Issue £300,000
Finance £100,000
Grants £61,000 £15,000 £15,000 £15,000 £15,000
Income £230,350 £329,965 £348,310 £348,310 £348,310
Total Cash Income £691,350 £344,965 £363,310 £363,310 £363,310
Asset purchase & refurb/renovations £420,000
Operational and admin £243,252 £304,684 £305,459 £305,459 £305,459
Interest on shares £0 £9,000 £8,700 £8,400 £7,800
Repayment of Shares £0 £10,000 £10,000 £20,000 £20,000
Finance repayments £10125 £13,500 £13,500 £13,500 £13,500
Total Cash Out £673,377 £337,184 £337,659 £347,359 £346,759
Net cash flow after interest and share repayment £17,973 £7,781 £25,651 £15,951 £16,551

 Note

  • Forward-looking statements are merely unaudited projections based on a number of assumptions and should not be relied upon as indicators of future performance. There is no guarantee these projections will be achieved.

Social Investment Tax Relief

The Hive have applied for Advance Assurance from HM Revenue and Customs (HMRC) that the shares in The Hive are eligible for tax relief under SITR and expects to be able to offer it's benefits to all individual investors.

As long as you are a UK taxpayer, you are eligible for tax relief on your investment subject to HMRC rules on eligibility, as long as shares are left in the Society for at least three years.

Individuals making an eligible investment can deduct 30% of the cost of their investment from their income tax liability, either for the tax year in which the investment is made or the previous tax year (if 2014/15 or later). The investment must be held for a minimum period of 3 years for the relief to be retained.

If individuals have chargeable gains in that tax year, they can also defer their capital gains tax (CGT) liability if they invest their gain in a qualifying social investment. Tax will instead be payable when the social investment is sold or redeemed. They also pay no CGT on any gain on the investment itself, but they must pay income tax in the normal way on any dividends or interest on the investment.

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