business plan november 2015 - online press release...

Business Plan November 2015

2www.cadenceperformance.com

The Vision

more than a cLUB, more than a BIKe shop

• Destinationcyclinghubfortheenthusiastandfitnessroadcyclist,evolving tobeingsynonymouswiththegolf/gymmembershipbusinessmodel

• Theultimateaimisanational/internationalnetworkofdestinationcycling hubsdeliveringthefirstcommercially-runroadcyclingclub

• Servicesdeliveredon-siteandremotely(suchascoaching)usinginternally developedintellectualpropertye.g.Pedalfit

• 17potentialUK/Irelandcatchmentsidentified.Possibilitiesfor internationalopportunitiesthroughfranchiseroll-out

• EIS-qualifyingbusinesswithattractiveexitoptionswithin5years tocycletrade,fitnesscluboperatororprivateequity


CyCle ReTail is Changing

a conventIonaL cycLe store:

cadence provIdes the aBove, pLUs…:

• SellBikesandComponents

• ServiceBikes

• BikeFittingServices-onsite,offsiteandonline

• Saddletesting,customfootbeds

• TreatmentProgrammes–cyclingspecificphysio&massage

• CoachingProgrammes–trainingprogrammesdeliveredremotely

• PhysiologicalTesting–lactatethresholdtesting,powertesting,VO2 Maxtest

• Indoortrainingfacilities–cyclingandexerciseclasses-thebadweather‘fix’

• ASocialHub–café,talks,seminars

• OrganisedEvents • Customerride-outs,‘Daywithapro’

• Corporateevents,includingproracevisitsandcorporateracedays


The MaRkeT & TRends

ROADCyClIng-THEwORlD’SFASTESTgROwIngSPORT

• 13mcyclistsintheUKwith2.1mcyclingmorethanonceperweek–now theUK’sthirdmostpopularparticipationsportafterswimming andathletics*

• Cadence’stargetmarketarethe550,000FrequentEnthusiastriders plusthe1.2mSportridersintheUK**

• Affluent,highspendersontheir“passion”.Averagespendtoget‘onthe road’of£2,495**

• FrequentEnthusiastsarepoorlyserved Only10%aremembersofcyclingclubs***

Fewplacestoconveneandaccessservices

limitedoptionstogetexpertadviceonfitness,technique,onlinecoachingandtechnicaladvice

*ActivePeopleSurvey:SportEngland2014-15

**TheBritishCyclingEconomy:londonSchoolofEconomics2011

***CadenceCustomerSurvey


The MaRkeT & TRends

hIgh growth marKet wIth LImIted servIce optIons

• TraditionalBikeShops Challengedbydiscountinternetretailers,limitedserviceofferings–focusonproducts

• CycleClubs Underfunded&limitedfacilities,canbeseenaselitist&intimidatingbynewcyclists, fewwithaphysicallocation

• Gyms Cyclistsnotwellservedbytraditionalgymsandfitnessclubs–pooradvice/equipment

• Indoorcyclingcentres/spinstudios Significantgrowth

Roadcyclistsuseindoorcyclingbutrequirebettersupport/advice

• Hugeglobalinterestincycling growthinthesportgloballywithsignificantbroadcastmediacoverage

Massparticipationevents–PrudentialRidelondon,CapeArgus

Advancesinaccessibilityandaffordabilityoftrickle-downpro-levelcyclingtechnology

Constanttechnologyrefreshdrivesnewsalesandeducation

Increasedawarenessofnewadvancesinscientifictrainingtechniques


The CadenCe CusToMeR we target the hIgh spendIng and LoyaL ‘FREqUEnTEnTHUSIAST’

• Typicalclub/sportiveriderfrombeginnerstoeliteriders

• ThecurrentCadencecustomer*: 79%aged36-55,59%own2ormorebikes

68%spent£1000-£5000ontheirbikes

80%livewithin7milesofCadence

weestimatecatchmenttobe23,000sportiveridersand800racingcyclists

AnerleyHill–3000uniqueridersaccordingtoStravaHeatMap

• TheFrequentEnthusiast Expensivebike,keentogetmorefromtheircyclingexperience, Purchasemultipleservices

Interestedintechnology,bikegearandlatesttrendsintrainingtechniques

Examples-existingCadencecustomers

•‘James’–Aged31,MarketingManager

Purchasedbike-fitting(£150),majorbikeservices(£450),nutritionand shoppurchases£180,Fitnesstest£150,regularvisitortocafé

• ‘Chris’–retiredandrecentlytakenupcycling

Signedformembershipplan£99permonth

Purchasedhisfirstroadbike(£1000),kit(£400)andbikefit£150

Regularincaféandotherservices£25/week*CadenceCustomerSurvey

www.cadenceperformance.com

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The CadenCe PRoPosiTion hIgh margIn, prodUctIsed servIce offerIng wIth potentIaL for recUrrIng revenUes

HelpingtheEnthusiastdevelopthemind,bodyandmachineofaroadcyclist.

Thesetransactionpointscanbemonetisedonanad-hocbasisforthecasualcyclistorrolledintoasubscriptionmodelforaholisticsupportpackage

THECAdEnCE

HUB

wattBIKe stUdIoyOgA/PIlATES

cLasseshypoxIc traInIng

coachIngnUtrItIon pLannIng

fItness testIng

PRO-lED rIde oUts

cycLIsts cafe

corporate events

SEMInARS&events

TRAVEl&TRAInIngcamps

socIaL rIde oUts BIKe fIttIng

ClEAT&SHOEfIttIng

BIKe worKshop

BIKe saLes

cUstom BIKes

PARTS&ClOTHIng

SPORTSMASSAgE&physIo

socIaL technIcaL

fItness


The CadenCe PRoPosiTion recUrrIng revenUe memBershIp pLans

• Productisedservicescanbepurchased asstandalonesubscriptionsorconfigured intomembershipplans

• Memberspaybymonthlydirectdebit

• Jerseyplanmemberssignforaminimum ofoneyear

• wattbikeandyoga/Pilatesmonthly rollingcontracts

• UpgradepotentialPeloton/whitejersey planupgradetogreen/yellowplans

• 14%ofourrevenueyTD2015is subscriptionsfrommembers

• 221memberswith80%growth

PlaN PelotoN PlaN

White Jersey PlaN

GreeN Jersey PlaN

yelloW Jersey PlaN

yoGa/Pilates WattBike CoaChiNG

MonthlyFee £10/MTH £29/MTH £59/MTH £99/MTH £35/mth £35/mth £30-£150/mth

CadenceClubJersey • • • •Shop&CaféDiscounts • • • •SaturdayRides • • • •FreeCadenceEvententry • • • •MajorBikeService • • •generalService • • •Intermediatebikefettling • • •UnlimitedwattbikeUse • • •TurboTrainerUse • •Unlimitedyoga • • •UnlimitedPilates • • •BikeFitting • •Bikefitfollowup • •PedalStrokeAnalysis • •CriticalPowerProfiletest •wingateTests •lactateThresholdFitnessTests • •HypoxicTraining •CustomCoachingPlan • •


The CadenCe PRoPosiTion BIKe saLes and worKshop revenUe

• CadenceisaGiantBrandstore Oneof22brandstoresintheBritishIsles

Specialtermsonbothgiantandlivranges

Higherprofitmargin

Bikestockonconsignment–bikesarepaidforatendofmonthfollowingthesale

Overnightautoreplenishofbikesandcomponents–directconnectiontogiantwarehouse

• ComprehensiverangeofbikeWorkshopservices Offerrangeofbikeservicepackagesrangingfrom£75to£150

Operates7daysperweekanduntil9pmonweekdays

Maintenanceclassesandinstruction


The CadenCe PRoPosiTion BIKe fIttIng and posItIon optImIsatIon

• Bikefitting OfferRetul,dynamicandoptimumfittingoptions-£100to£350perfitplus ancillarysales

3fitterswith2fittingroomsoperating7daysperweek

Upto150fitspermonthduringpeakseason

• Saddletestingfitting Usepressuremappingtoidentifyoptimumsaddletype

Testandtrialbeforecustomersaddlepurchase

• CleatFitting Ensuresoptimumsettingofshoesandcleats

• CustomInsoles CustominsolesfromSidas,Fizik,g8

Pricesfrom£100

• PedalStrokeAnalysis Usesvideocapturetoreviewcustomerpedalstroke

Reviewandrecommendcorrectionstoimprovepedallingefficiency


The CadenCe PRoPosiTion

FITnESSTESTIng,wATTBIKESAnDyOgA/PIlATES

• Fitness&Coachingservices Includeslactatethreshold,MaxHeartratetest,MaximalPowertest,V02Test andCriticalPowerProfile

Pricesfrom£100–a‘one-off’orprovidedaspartofacoachingplan

• CoachingPlans Startswithinitialassessment

Plandefinedbasedonobjectives,ridersavailabilityandfitnesslevels

• Wattbike 16bikestudio,classeseverydaywithextraclassesformums&babies and‘Silverfit’

£10perclassonaoneoffbasisoraccessedusingamembershipplan

Over1000riderspermonthusethestudio

• Yoga&Pilates Classeseveryday

£10perclassonaoneofforaccessedusingamembershipplan


The sToRy so FaR

POP–UPSITETOFUllROll-OUT

• Establishedexistingsiteas‘Pop-Up’openedin formercarshowroomendMarch2012 •Focusedondefinition&testingproductisedserviceofferings

•nowconvertedto10yearlease

•RefurbishedbuildinginDec2013-Jan2014,reopenedMarch2014

•Revampedretail,café,bikefitroomsandworkshop

•Introducedgiantroadperformancestoreconcept

•Installedwattbikestudio,Pilates/yogaroom&fitnesstestingroom

• Consistentrevenue&footfallgrowth

•45%+grossProfitwith80-100%yearonyeargrowthinrevenue

• Tractioninlocalcatchmentandcredibilityintheindustry •Establishedasthoughtleaders-regularfeaturesintradepublications,usedasthe studiolocationforthe2014seriesofITV’sTheCycleShow

• Operationalmodelfurtherdefined&newcatchmentsidentified

Consistent growth in sales and gross profit

The Story So Far

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Sales

Gross Margin

Expon. (Sales )

Note sales up to Feb 2015 include Café – Café now on concession paying a fixed fee per month plus % turnover

All numbers exclude VAT


The sToRy so FaR strong year on year saLes growth performance

notesalesuptoFeb2015includeCafé–Cafénowonconcessionpayingafixedfeepermonthplus %turnover

AllnumbersexcludeVAT


The sToRy so FaR ACHIEVEDBREAK-EVEnFIRSTHAlF2015

2012-13 fy actUaL

2013-2014 fy actUaL

2014-15fy actUaL

2015-16hy actUaL to end aUgUst

2015-16fy projected

SAlES(ExVAT) 188,390 £401,365 £792,078 £519,488 £940,917

eBItda(ExClHEADOFFICE)

(£183,894) (£273,819) (£91,996) £49,183 £66,622

head offIce £- £24,021 £95,194 £32,530 £65,060

eBItda(InClHEADOFFICE)

(£183,894) (£297,840) (£187,190) £16,653 £1562

%gROSSPROFIT 38% 41% 45% 45% 46%


The sToRy so FaR lESSOnSlEARnEDIn‘POPUP’PHASEBEIngUSED to gaIn rapId tractIon

totaL saLes By year (ExClUDIngCAFé)

eBItda (ExClUDIngHEADOFFICECOSTS)

• nowatbreak-evenatCrystalPalacesite

• Monthlyfootfallincreasedfromlessthan500inApril2012to2,046inMay2015

• Undertake90-100+bikefitspermonth,150inpeakmonths:oneofthebusiestbikefittingcentresintheUK

• 221monthlysubscriberstoservices,averagesubscription£56pm

• CafémovedtoconcessionsinceMarch2015

AllnumbersexcludeVAT


Funding RequiReMenTs THEBUSInESSSEEKSTOATlEAST£300,000InTHIScrowdfUnd roUnd to acceLerate growth

projectIons

projectIons CRySTAlPAlACEExISTIngSITE(InClUDEDInTHEABOVEPROJECTIOnS)

2015/16projected

2016/17projected

2017/18projected

2018/19projected

2019/20projected

saLes £940,917 £1,718,190 £3,106,657 £4,425,664 £5,232,931

eBItda £2,832 £29,127 £300,953 £720,127 £1,036,727

net profIt £(44,877) £(62,655)** £170,981 £654,414 £866,256

2015/16projected

2016/17projected

2017/18projected

2018/19projected

2019/20projected

saLes £940,917 £1,157,204 £1,235,823 £1,246,346 £1,246,346

eBItda £66,622 £188,486 £244,279 £249,550 £249,550

**Includesinvestmentinsecondsite–plansassume24monthstobreakeven

www.cadenceperformance.com

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The ManageMenT TeaM hIstory of sUccessfULLy deLIverIng retUrns for sharehoLders

directors FrankBeechinor–Co-founderandCEO FrankistheCEOandisanexperiencedentrepreneurandbusinessman. Hewasaco-founderofOneClickHR,aHRsoftwarebusiness,whichhefloatedon thelondonStockExchangeAIMMarketin2000andsoldtoADPin2011.Frankis currentlynon-ExecutiveChairmanoftwocompaniesonAIM,DotdigitalPlcand ComsPlc.Frankhashadaninterestincyclingfromanearlyageandestablished abicycleshopashisfirstbusinesswhenhewas17andusedthistopayhis waythroughuniversity.HemovedtotheUKin1987andjoinedgrand Metropolitanplc.

RayVella–Co-founderandDirector RayisagPwithalocalpractiseinBeckenhaminKent.AlongwithFrank,Ray isaDirectorofthecompany.Heisakeencyclistwhounderstandstheneedsof ourcustomers.HerideshisbikeeverydayandisanarchetypicalFrequent Enthusiast.Heprovidesstrategicdirectiontothebusiness.

OperationalManagement AdrienneCadle–FinanceDirector AdrienneisFinanceDirector,aqualifiedaccountantwithanextensive backgroundinsettingupfinancialsystems,controlsandmanagementreporting. ShejoinedCadenceinJanuary2014andmanagesdaytodayoperationsofthe business,ensuringaccuratefinancialinformationisproducedwithmanagement reports.PreviouslyAdrienneworkedasafinancialcontroller/manageratReed Employment,P&OandOfficeCanopygroup.

SeamusKelly–generalManager Seamushasmanyyears’experienceinthecycletraderunningbikeshopsintheUK andIreland.ACat3roadracerSeamushasacomprehensiveunderstandingof biketechnologyandtraining.

CiaranO’Grady–SportsScientist CadencefundedCiarantoundertakehisMScinsportsscienceattheUniversity ofKentwherehisfocuswasonindividualisedtrainingplansforcyclists.Heis abouttoembarkonhisPhDwhichwillbefundedbyCadenceandhisresearch willcovercoachingtechniques.AspartofourrelationshipwiththeUniversitywe shareCiaran’sresearchfindingsallowingusapplythistoourservices.

EdCollins–HeadCyclingCoach Edisaformerpromountainriderandacompetingroadandcyclocrossrideras wellasbeingalevel3BritishCyclingqualifiedcyclingcoach.Edisresponsible forourcoachingplansandstrategy.

Aimtobuildteamtosupportfullroll-outofconcept


WhaT ouR CusToMeRs say

great feedBacK from cUstomers

Thanks to the great folks at CADENCE whose support and advice was essential in getting Wim and myself prepared for going up col after col during the Haute Route Alps 2013.HansgerbeurSept2013

DaveBGreat place, been going there from the start. Recently got a new saddle and it was nice not feel the pressure to choose the first one Also get an orthotic heating and fitting with Simon which lasted a good half hour to get it right, as well as the mechs fitting in some quality work on the bike at short notice (though that may be a luxury that is short-lived given how popular the shop is getting!). Keep it up, guys, you’re fulfilling an important function in Crystal Palace.

FormorereviewsvisitgoogleReviewsandFacebook

JonArmLocated in the heart of the south London cycle culture, Cadence brings the long waited cycle hub, offering great coffee, food and all you could need in cycling equipment and tech advice. Its a great place to end your training ride, or your social club ride. If you are a cyclist and are looking to take your cycling to the next level, Cadence is the place for you to get advice, bike fits and anything else you might need to get your body and equipment up to speed.

MarkJonesLove this place.....in the early days, had a chance to spend 45 mins with des discussing the best use of this and the best use of that....now they are lucky enough to be as busy as they deserve. From turbo sessions to bike maint. to watching re-runs of races and eating cake whilst “working from home” with the free wifi, they are great.

laurenKristinaAnnelepleyBloomin marvellous! Awesome service from all staff and a great bike fit! Thanks guys! Oh and great coffee and cake too even if you don’t have a bike!

RobHannamI am what some would say, a ‘larger gent’ as such struggle with my cycling, so, after a recommendation I went for a bike fit with my Tri bike, it was transformed, from something that was nearly unrideable, to a much more comfortable ride. That was last year, this year I went back with my road bike, just in time for ironman 70.3, Des worked some magic and once again the bike was transformed! I am hard to impress, but the service and skill I received on both my fittings did the job. There seems little point spending thousands on a fancy machine if it don’t fit. Money very well spent! Will be back again most definitely be back!

ChrisHueyI’ve used Cadence for a bike fit and also a LT testing session in recent months. Both were great, carried out by experienced staff who know the answers to all sorts of questions and are always willing to offer ongoing advice. I also joined the Cadence group for an event with Marco Pinotti, a brilliant day out with a seasoned professional. Thoroughly recommended as a cafe, bike shop and great group of bike-loving people.


WhaT ouR CusToMeRs say


a sTandaRdised oPeRaTing Model

standardIsed processes and great peopLe ensUres consIstency of servIce

• Focusondevelopingstandardisedoperatingproceduresfor allaspectsofthebusiness

• Currentlystaffof11pluscontractors • Including3bikefitters,2coaches,2mechanics

• Therightattitude-passionateaboutcyclingandstrongbeliefthattheremustbe a‘newway’toservethecyclingmarket

• Multi-skilled–e.g.bikefit/coach/sell

• Versatileapproach–notpatronisingtobeginnersbutcredible withexperiencedriders

• Staffselection • Seekpeoplewiththerightattitude

• Multi-skilled-ourkeypeoplemustbeabletotalkknowledgeablytoclientsabout fitness,mechanics,bikes,parts

• Operateapolicyof‘growingourown’–alwaysdevelopingthenextgeneration ofmanagersfornewsites


use oF neW inVesTMenT

acceLerate oUr geographIc expansIon

• Geographicalexpansion–openmorecentres • AddtoinitialsiteatCrystalPalacewithasecondsitein2016and,ifweachieve ourfinancialobjectivesfurthersitesto2017andbeyond

• Potentialtoexpandto5centresintotalinUKover4years.Oncefundingin placesearchcommencesearchforsuitablepremises.FocusaroundtheM25 –CrystalPalace,Swlondon/Surrey,northlondon/HertsandBucksbut willbroadensearchtoothercatchments

• Potentialforupto17centresinUK&Ireland–butalsopotentialforvirtualgrowth– onlinetrainingplans,cyclecoachingapp/website

• Eventualinternationalrollout-potentialtofranchisecentremodel

• developourCorporatebusiness • Clientsalreadyincludeguardiannewspapers,CreditSuisse, warnerBros,MottMcDonald

• Highmargineventswithgoodpotentialforrepeatbusiness

• Addmarketingresourcetoincreaseourcorporatebusiness


use oF neW inVesTMenT expLoIt oUr InteLLectUaL property and acceLerate oUr growth In annUIty revenUe

• Leverageourcyclingcoachingcapabilitythroughtechnology • wewishtocreateanewgenerationcloud-basedcyclecoachingsoftwarewhichwill alsobecomethetechnologyplatformtooperatetheCadencecentres

• Integratefitnesstesting,coaching,nutrition,pedalstrokeanalysis,bikefitting intooneseamlessprocess

•willallowustodeliverourcoachingservicesremotely–growourvirtualbusiness

•Enablesustoexploitopportunitytodelivera‘whitelabel’coachingserviceto partnersinthefitnessindustry

• DiscussionsunderwaywithmajoroperatorinthebicycletradewherebyCadencewill providea‘whitelabel’coachingservicetotheircustomersacrosstheUK

• IncreaseourMembershipbase • Currently221customerson‘paymonthly’,payingaverage£56permonth

• Focusonmarketingourmemberplanstoabroaderaudiencewiththe aimofgettingto300-500memberspersite

• Buildourannuityrevenue

• Providea‘singleview’ofclients’transactionsandservices

•Integratepredictiveanalytics;increasecross–sellopportunities tomembers/customers


suMMaRy

UnIqUEROllOUTOPPORTUnITyInAHIgHgrowth marKet

• Uniqueserviceoffering–nottraditionalretail–inoneofthefastestgrowingsportingsectorsintheUKandabroad

• Highmarginwithrecurringrevenues

•MatureHubbusinessmodelrunswithhighmargincashgenerationwithhighrecurringrevenues

•nowthatmodelisrefinedc.24monthstobreakevenpercentre

•45%+gPpercentre,withpotentialtoincreaseasserviceofferingincreases

•Potential25%+EBITDApercentre

• Potentialforcoachingbusiness •Onlinecoachingcanbehighlyprofitable,withrecurringrevenues,asitgrows

•Coachingplatform–whitelabelready–potentialtosellthroughthirdparties

• Rolloutopportunity •Potentialforroll-outintheUK:17catchmentsidentified

•PotentialInternationalopportunityviafranchisemodel

• Shareholders •qualifiedEISbusiness

• Exit •Tradesaletomajorbusinessinthebicycleorfitnesscentreoperator

•Possibleflotationifweachievesufficientscale


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ConTaCT us noWTelephone 02086768825Email [email protected] www.cadenceperformance.comTwitter @cadenceperform

CadencePerformancelimited2aAnerleyHill,CrystalPalace

londonSE192AA

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