Hollowbrook Garden Centre
A freehold destination garden centre, nursery & landscape supply · the Cotswolds, England
What's in this deal book
The transaction in one view
The investment case
The condensed thesis: a freehold-anchored destination garden centre, cash-generative and owner-run for 30 years, changing hands as the founder retires, with real estate that can be bought or leased and clear operating upside for the next owner.
Buy a 30-year destination, separate the bricks from the goodwill
Freehold site
A 7-acre freehold on a main Cotswolds road. Buy it for £1.9M or lease at £150K/yr — the operating business is priced independently of the property.
Footfall + trade
~180k annual visitors and a 140-account trade base that renews above 85% sit under the retail. Two demand engines, not one.
Retiring owner
Not distressed. Margaret is retiring after 30 years and hands over across a full spring season, name and team retained.
Five levers
Café, e-commerce, the trade desk, Christmas and repricing lift adj. EBITDA from £545K toward £780K without heroics.
A destination people drive to, not a shed run
Hollowbrook is a 7-acre garden centre on a freehold Cotswolds site: plants and nursery stock, hard-landscaping supplies, a homeware and gift barn, and a 40-cover café. Retail walk-in drives the season; year-round trade accounts with local landscapers and gardeners sit underneath it.
A steady catchment, a re-rating category, a fragmented tail
Gardening is a habit
UK garden and outdoor-living spend held up through the last decade. A destination centre with a café earns repeat weekend visits from a settled rural-and-market-town catchment, not one-off transactions. Habit, not fashion.
Destination beats commodity
Sheds and supermarkets took the commodity basics, so the surviving independents compete on range, advice, café and day-out appeal. That is where basket size and margin sit, and it is exactly what a 7-acre freehold site can offer and a car park cannot.
Owner-operators retiring
Many independent centres are owned by a founder generation now retiring with no family successor, the same story selling Hollowbrook. For a buyer with a platform, each is a bolt-on. For a first owner, it is a proven site bought below build cost.
Steady revenue, a margin that holds through the seasons
Revenue & adj. EBITDA
£ thousands · FY23 to Year 5 (Year 1+ is the plan)
Adj. EBITDA margin
Percent of revenue
What is being sold
A going concern, cash-free / debt-free, at £2.0M for the operating business (~3.7× adjusted EBITDA), with the freehold sold separately at £1.9M or leased at £150K/yr. The founder is retiring and offers a full spring-season handover.
- The trading business and its goodwillbrand, name, 30-year reputation, ~180k annual visitors
- 140 active trade accountslandscapers and gardeners, >85% annual retention
- Stock, fixtures, café fit-out, plant & the teamthe retail manager and head grower stay through the handover
Spring handover + vendor note
Margaret stays through a full spring season, the busiest and hardest quarter to run, and carries a £150K seller note, so she is aligned through the handover of trade relationships and grower supply.
Sources & uses — the bundled acquisition
Sources
| Freehold mortgage (60% LTV) | £1,140K | 27% |
| Acquisition term loan | £550K | 13% |
| Vendor note | £150K | 4% |
| Buyer equity | £2,360K | 56% |
| Total | £4,200K | 100% |
Uses
| Operating business (3.7×) | £2,000K | 48% |
| Freehold real estate | £1,900K | 45% |
| Acquisition costs (SDLT, legal) | £160K | 4% |
| Opening stock peg & min cash | £140K | 3% |
| Total | £4,200K | 100% |
Lease alternative: take the operating business at £2.0M and lease the site at £150K/yr instead of buying the freehold — releasing £1.9M of capital and the mortgage. The £150K rent is roughly the 7.9% yield on the freehold, so buy-versus-lease is a financing choice, not a difference in business value.
Where the next owner's upside comes from
Adj. EBITDA bridge — today to Year 5
£ thousands · five operating levers
A +43% lift over five years, none of it requiring the freehold to be redeveloped. The café is the highest-margin line (65% GM) and sits idle midweek.
Hollowbrook Garden Centre
A written walk through the investment case, one page for each part of the deck. The schedules and workings behind each page sit in the supporting documents and data room that follow.
The deal in one paragraph
Buy a proven, freehold destination garden centre from a retiring founder, price the operating business apart from the property, and grow the earnings with a short list of ordinary improvements.
Hollowbrook has traded for thirty years on a 7-acre freehold Cotswolds site. It earns £615K of owner earnings, or £545K once a market-rate manager is paid. The operating business is offered at £2.0M, roughly 3.7 times adjusted earnings; the freehold is a separate £1.9M asset the buyer can own or lease.
The upside is not heroic. Extending the café, adding click-and-collect, growing the trade desk, building the Christmas season and repricing legacy trade rates lift adjusted EBITDA from £545K toward £780K over five years. A first owner buys a proven site below build cost; a platform buyer adds a bolt-on with a freehold underneath it.
A destination people drive to
Hollowbrook is a 7-acre garden centre on a freehold Cotswolds site, with plants, hard landscaping, a gift barn and a café.
Roughly 180,000 people visit a year. Seven in ten pounds come from retail walk-in, a further fifth from trade accounts held by local landscapers and gardeners, and the rest from the café and events. The blended gross margin is 48%.
The site is the moat: a settled catchment, a car park, a café that earns a day out rather than a quick transaction. Delivery runs through a retail manager and a head grower, both of whom intend to stay, so the business is not dependent on the retiring owner for day-to-day trading.
Steady by nature, and consolidating
Gardening spend is a habit that holds through the cycle, and the independent end of the market is quietly consolidating.
Supermarkets and DIY sheds took the commodity basics years ago, which pushed the surviving independents toward range, advice and a café — the parts that carry margin and bring people back. A 7-acre freehold site can offer that day out; a car park cannot.
At the same time a founder generation of owner-operators is retiring, the same story that puts Hollowbrook on the market, so proven sites are changing hands. For a platform buyer each is a bolt-on; for a first owner it is a going concern bought below the cost of building one.
Growing, and the margin holds
Revenue has grown steadily to £3.40M, and the gross margin has held at 48% while it did.
Revenue moved from £2.98M three years ago to £3.40M today, a 6.8% annual rate over two years, and the operating plan carries it to £4.6M by year five. Adjusted EBITDA is £545K today; owner earnings before a manager are £615K.
The margin holds because the mix works: retail and hard goods at mid-forties gross margin, the café well above 60%, and a trade base that pays list-adjacent rates. The value-creation plan tilts the mix further toward the café and repriced trade, which is why EBITDA grows faster than revenue.
What the buyer is actually getting
A complete, running business, cash-free and debt-free, for £2.0M, with the freehold available to buy or lease.
The sale includes the goodwill and 30-year brand, the 140 trade accounts, the stock, fixtures, café fit-out, plant and website, and the team. The retail manager and head grower stay on. The name is retained, which is one of Margaret's conditions.
The freehold is handled separately: buy the 7-acre site for £1.9M, or take a 15-year lease at £150K/yr. Margaret stays through a full spring season and carries a £150K vendor note, so her money is at risk while the grower supply and trade relationships pass across.
How the purchase is funded
Buying the business and the freehold together costs about £4.2M, funded mostly with a property-secured mortgage and buyer equity.
A £1.14M commercial mortgage at 60% of the freehold value, a £0.55M acquisition term loan and a £0.15M vendor note cover the debt; the buyer puts in £2.36M, about 56%. The money pays £2.0M for the business, £1.9M for the freehold, and the balance for costs and opening stock.
The cash-flow leverage is light: only the term loan and vendor note, at 1.3 times earnings, are serviced from trading. The mortgage is asset-backed and long-dated. A buyer who leases instead pays no mortgage but pays £150K rent, which is roughly the yield on the property they chose not to buy.
Where the upside comes from
Five ordinary improvements lift adjusted EBITDA from £545K toward £780K over five years, a 43% gain.
The café and events desk are the highest-margin line and sit idle midweek; filling them adds about £60K. Click-and-collect and e-commerce for hard goods, plus a properly run trade desk, add about £95K between them. Building the Christmas and winter season adds £40K, and repricing legacy trade rates to market another £40K of pure margin.
None of it depends on redeveloping the freehold or on a strong market. It is the ordinary work a professional owner does that a retiring founder, understandably, has not pushed on in the last few years.
Supporting documents & data room
The detail behind the memo: the company and its history, the people, how revenue is earned, the seasonality, the trade base, operations, the value-creation plan and the risks, plus the staged data room that holds every supporting file.
Thirty years of building a destination
Margaret Ellison opened Hollowbrook in 1994 on a 7-acre roadside plot, propagating her own nursery stock and selling to weekend gardeners. The café came in 2004 and turned a shopping trip into a day out; the trade desk followed as local landscapers began buying on account. The freehold was bought outright in 2009. Margaret, now 63, is retiring with no family successor and wants a clean handover to an owner who keeps the name and the team.
How revenue is earned
Revenue by channel
Share of TTM revenue · £3.40M
Plants, hard goods & gifts
£2.38M at ~47% gross margin. Seasonal footfall, a loyalty scheme capturing ~40% of retail spend, and basket lifted by the café and range.
Landscapers & gardeners
£0.75M at ~45% gross margin. 140 accounts on 30-day terms, >85% annual retention. Year-round revenue under the seasonal retail.
The highest-margin line
£0.27M at ~65% gross margin. 40 covers, underused midweek. The clearest near-term margin lever.
Where the 48% blended gross margin comes from
| Channel | % of revenue | Gross margin | Character |
|---|---|---|---|
| Retail walk-in | 70% | 47% | Seasonal footfall, loyalty-led |
| Trade accounts | 22% | 45% | Recurring, on account |
| Café & events | 8% | 65% | High-margin, underused midweek |
| Blended | 100% | 48% | Weighted average of the three |
The honest shape of the year
Revenue by month
Share of annual revenue · the deal is valued on the full year, not the spring peak
A sticky trade book sitting under the footfall
| Account tenure | Accounts | % of trade rev | Retention |
|---|---|---|---|
| 0–2 years | 34 | 16% | 78% |
| 3–5 years | 41 | 26% | 85% |
| 6–10 years | 38 | 31% | 89% |
| 10+ years | 27 | 27% | 92% |
| Total trade book | 140 | 100% | >85% |
Trade accounts only (22% of total revenue). Retention rises with tenure; the longest-standing quarter of accounts drives 27% of trade revenue.
Not owner-dependent for trading
Eleven full-time staff and up to fifteen seasonal hands across the spring peak, twenty-six in season. The retail manager and head grower run trading day to day; the founder's role is supplier relationships, buying and oversight.
A well-run 7-acre freehold
- 7-acre freehold on a main roadglasshouses, poly-tunnels, nursery beds, hard-landscaping yard, gift barn, café, parking
- EPOS + loyalty schemecaptures ~40% of retail spend, the spine of the customer data a buyer inherits
- Own-grown nursery stockmargin advantage over bought-in plants, plus a supplier network for the rest
- Glasshouse renewal budgeted~£95K/yr maintenance capex on glass, machinery and site is in the plan
Five levers, none of them heroic
- Extend the café and events.Highest-margin line at 65% GM, idle midweek. Longer hours, a bookings desk and seasonal events. +£60K EBITDA.
- Click-and-collect and e-commerce for hard goods.Compost, pots, tools and gifts sold online for collection or local delivery, using the site as the warehouse. +£45K.
- Grow the trade desk.A dedicated account manager, credit discipline and delivery slots to win landscaper share year-round. +£50K.
- Build the Christmas and winter season.The under-traded quarter: Christmas retail, wreaths, lights and a festive café. +£40K.
- Reprice legacy trade rates to market.A share of long-standing accounts sit below current list. Pure margin, no new customers. +£40K.
What could go wrong, and the answer
Over half the year lands Mar–Jun. Mitigants: trade and café floor, the winter lever, and a normalized peg so a soft spring does not distort the price.
Full spring-season handover, a vendor note keeps Margaret aligned, and the manager and grower already hold the day-to-day.
Own-grown stock, covered glasshouse space and a diversified range spread weather risk; the café and gifts are weather-neutral.
Destination experience, café, advice and a freehold catchment that sheds and websites cannot replicate.
Buyer can lease at £150K/yr instead of buying, releasing £1.9M of capital. The property is not a barrier to the deal.
Retention terms for both in the first-100-days plan; own-grown recipes and supplier lists documented in the data room.
The evidence room, released by trust stage
The teaser is open to anyone. Financials, the trade book and the loyalty data unlock the moment a mutual NDA is signed. Confirmatory items — the RICS valuation, bank statements and unredacted trade contracts — open in the final room once a buyer is exclusive. The named employee roster stays behind the NDA throughout; only an anonymized org structure is open pre-NDA, so staff cannot be identified or approached. That staging is the point: the seller controls disclosure, the buyer always sees what is available and what comes next.
Mutual NDA
Two pages, standard mutual terms. Signing unlocks the financial statements, the trade-account register and the loyalty/EPOS data in the index below.
Every document, and where it sits
| Document | Fmt | Access |
|---|---|---|
| Corporate & legal | ||
| Certificate of incorporation & articles | Available | |
| Business & trading licences (café, alcohol) | Available | |
| Insurance summary (cover schedule) | Available | |
| Minute book & directors' resolutions | 🔒NDAAvailable | |
| Share register / cap table | 🔒NDAAvailable | |
| Financial | ||
| Financial statements FY23–TTM | 🔒NDAAvailable | |
| Management accounts + TTM | XLSX | 🔒NDAAvailable |
| Adj. EBITDA / SDE bridge + add-backs | XLSX | 🔒NDAAvailable |
| VAT returns & tax computations (2 yrs) | 🔒NDAAvailable | |
| Aged trade debtors + supplier terms | XLSX | 🔒NDAAvailable |
| Sell-side financial databook (vendor Q of E) | 🔒NDAAvailable | |
| Revenue & commercial | ||
| Trade-account register (terms, tenure) | XLSX | 🔒NDAAvailable |
| Sample trade agreements (redacted) | 🔒NDAAvailable | |
| Loyalty-scheme & retail basket analysis | XLSX | 🔒NDAAvailable |
| Top-account concentration (coded) | XLSX | 🔒NDAAvailable |
| EPOS sales export by category / season | CSV | 🔒NDAAvailable |
| Operations & stock | ||
| Stock policy & seasonal buying calendar | Available | |
| Plant-health & biosecurity compliance | Available | |
| Inventory valuation / stock-take method | XLSX | 🔒NDAAvailable |
| Supplier & grower list + key terms | 🔒NDAAvailable | |
| Document | Fmt | Access |
|---|---|---|
| Property & freehold | ||
| Freehold title & site plan (Land Registry) | Available | |
| EPC & site condition surveys | Available | |
| Planning consents & permitted use | Available | |
| RICS red-book valuation | 🔒NDAAvailable | |
| Draft 15-yr FRI lease (buy-or-lease option) | 🔒NDAAvailable | |
| People & HR | ||
| Anonymized org structure (headcount by role) | Available | |
| Employee roster (named) & contracts | 🔒NDAAvailable | |
| Payroll & benefits schedule | XLSX | 🔒NDAAvailable |
| Seasonal staffing plan & rotas | XLSX | 🔒NDAAvailable |
| Key-person retention terms (grower, manager) | 🔒NDAAvailable | |
| Legal & compliance | ||
| Litigation / disputes (nil report) | Available | |
| Licences: alcohol, plant passport, waste | Available | |
| Insurance policies & claims history | 🔒NDAAvailable | |
| H&S records & risk assessments | 🔒NDAAvailable | |
| Transaction | ||
| Confidential information memorandum | Available | |
| Draft asset purchase agreement | 🔒NDAAvailable | |
| Working-capital / stock-peg method | XLSX | 🔒NDAAvailable |
| Vendor note & handover terms | 🔒NDAAvailable | |
| Bank statements, 12 months | On request | |
Valuation
A cash-flow valuation of the operating business, built up from normalized adjusted EBITDA, with the freehold valued separately and a transaction-multiple cross-check.
Business valued on cash flow, freehold valued as an asset
We separate the two. The operating business is valued on the cash it produces: reported profit is normalized to adjusted EBITDA, then a discounted-cash-flow model on a conservative base case sets intrinsic enterprise value, cross-checked against transaction multiples. The freehold is valued independently as a 7-acre asset. One earnings basis — adjusted EBITDA — carries the headline multiple throughout.
Owner-operator lens: at £615K SDE the £2.0M ask is 3.25× SDE. The headline multiple in this book is stated on adjusted EBITDA (£545K) to match the comps.
From reported profit to adjusted EBITDA
Normalization bridge
£ thousands · TTM
| Reported pre-tax profit | 300 |
| + Interest | 40 |
| + Depreciation & amortization | 90 |
| = Reported EBITDA | 430 |
| + Owner salary & benefits | 130 |
| + Owner discretionary (vehicle, travel, insurance) | 40 |
| + One-time / non-recurring | 15 |
| = SDE (owner-operator basis) | 615 |
| − Market-rate replacement manager | (70) |
| = Institutional adjusted EBITDA | 545 |
SDE frames the owner-operator lens (£615K, 3.25× at the £2.0M ask). Institutional adjusted EBITDA deducts a fully-loaded £70K manager, because a buyer who does not work the floor must pay for one. The headline multiple and the comps below both use the £545K adjusted-EBITDA basis, struck on a full-year (not spring-peak) figure.
Conservative fair-value base case
| £ 000s | Yr1 | Yr2 | Yr3 | Yr4 | Yr5 |
|---|---|---|---|---|---|
| Adj. EBITDA (3% organic) | 561 | 578 | 595 | 613 | 632 |
| − D&A | (55) | (55) | (55) | (55) | (55) |
| − Cash tax @25% | (127) | (131) | (135) | (140) | (144) |
| + D&A back | 55 | 55 | 55 | 55 | 55 |
| − Capex (glass, machinery, EPOS) | (110) | (113) | (116) | (120) | (123) |
| − ΔNWC (seasonal stock) | (19) | (20) | (20) | (20) | (22) |
| Unlevered FCF | 305 | 314 | 324 | 333 | 343 |
Fair-value case grows the £545K institutional adjusted EBITDA at 3%/yr — distinct from the value-creation plan (£545K→£780K) used in the dashboards. Capex covers glasshouse renewal and machinery; ΔNWC reflects seasonal stock growth (~6% of revenue).
Discount rate build-up
Established freehold retailer · 17%
Lower than a services roll-up: 30-year trading history, freehold backing and a low-concentration base cut company-specific risk. Seasonality is the main add-on.
Operating business value ≈ £2.09M
| £ 000s | FCF | × | PV |
|---|---|---|---|
| Year 1 | 305 | 0.855 | 261 |
| Year 2 | 314 | 0.731 | 229 |
| Year 3 | 324 | 0.624 | 202 |
| Year 4 | 333 | 0.534 | 178 |
| Year 5 | 343 | 0.456 | 156 |
| PV of explicit FCF | 1,027 | ||
| Terminal value (g=2.0%) | 2,332 | 0.456 | 1,064 |
| Enterprise value (business) | 2,090 |
Operating business only. The freehold (£1.9M) is valued separately and is not in this figure.
Sensitivity — business EV (£000s)
Discount rate × terminal growth · active cell highlighted
| r ↓ / g → | 1.0% | 1.5% | 2.0% | 2.5% | 3.0% |
|---|---|---|---|---|---|
| 14% | 2,487 | 2,550 | 2,617 | 2,691 | 2,771 |
| 15% | 2,307 | 2,359 | 2,415 | 2,475 | 2,541 |
| 16% | 2,151 | 2,194 | 2,241 | 2,291 | 2,345 |
| 17% | 2,014 | 2,051 | 2,090 | 2,132 | 2,178 |
| 18% | 1,894 | 1,925 | 1,959 | 1,994 | 2,032 |
| 19% | 1,787 | 1,814 | 1,843 | 1,873 | 1,905 |
| 20% | 1,691 | 1,714 | 1,739 | 1,766 | 1,793 |
What garden-centre businesses trade for
| Target (type) | Yr | Region | Revenue | EV/EBITDA |
|---|---|---|---|---|
| Garden-centre group (3 sites) | 2023 | Midlands | £11.5M | 4.6× |
| Freehold destination centre | 2024 | South West | £6.2M | 4.4× |
| Rural garden & homeware | 2022 | Wales | £3.5M | 3.8× |
| Independent nursery + café | 2024 | South East | £2.8M | 3.7× |
| Garden centre (leasehold) | 2023 | North | £4.1M | 3.2× |
| Small independent nursery | 2024 | South West | £1.9M | 3.0× |
| Median | 3.75× |
Illustrative UK SME garden-centre / specialty-retail transactions, shown property-neutral (a market rent charged) so the multiple reflects the operating business. Freehold destination sites sit at the top of the range on security of tenure; Hollowbrook's freehold is monetised separately, not inside the multiple.
The asking price against every lens
Dashboards & forecasts
The financial picture today — including the honest seasonal curve — and the five-year operating plan behind the value-creation case.
The business on one screen
Three years of financial history
| £ thousands | FY23 | FY24 | TTM |
|---|---|---|---|
| Revenue | 2,980 | 3,180 | 3,400 |
| Cost of goods sold | 1,550 | 1,654 | 1,768 |
| Gross profit | 1,430 | 1,526 | 1,632 |
| Gross margin | 48.0% | 48.0% | 48.0% |
| Operating expenses | 1,050 | 1,110 | 1,185 |
| Owner adjustments (add-backs) | 140 | 149 | 168 |
| Adjusted EBITDA / SDE | 520 | 565 | 615 |
| SDE margin | 17.4% | 17.8% | 18.1% |
SDE (owner-operator basis) shown; deduct a £70K market-rate manager for the £545K institutional adjusted EBITDA. Revenue CAGR FY23→TTM is 6.8% over two periods.
The monthly curve, in full
Revenue by month
Share of annual revenue · spring Mar–Jun carries 54%
| Season | Months | % of year | Character |
|---|---|---|---|
| Spring | Mar–Jun | 54% | Peak |
| Summer | Jul–Aug | 22% | Strong |
| Autumn | Sep–Nov | 15% | Steady |
| Winter | Dec–Feb | 9% | Trough / lever |
| Full year | 12 | 100% | Valuation basis |
Revenue and EBITDA plan
Revenue & adj. EBITDA
£ thousands · value-creation plan
| £ 000s | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|
| Revenue | 3,600 | 3,830 | 4,080 | 4,340 | 4,600 |
| Adj. EBITDA | 585 | 630 | 680 | 730 | 780 |
| Margin | 16.3% | 16.4% | 16.7% | 16.8% | 17.0% |
| Free cash flow | 323 | 353 | 388 | 416 | 449 |
Revenue ~6.2% CAGR; adjusted EBITDA grows faster as the café, trade desk and repricing lift the mix. FCF is after tax, capex and seasonal stock, before financing.
The plan is cash-generative through the seasons
Free cash flow
£ thousands · after tax, capex & seasonal stock
Gross profit by channel
£ thousands · TTM · where the margin sits
Competitors
A market where destination experience, a freehold catchment and a café are the moat against chains, sheds and online.
Who Hollowbrook competes with
| Competitor archetype | Scale | Focus | Note |
|---|---|---|---|
| National garden-centre chain | Large / multi-site | Destination retail + restaurants | Brand and buying scale; less local depth, no trade relationship, corporate feel |
| Regional independent garden centre | Mid | Destination retail | Closest direct competitor — competes on range, café and day-out appeal |
| Builders' & landscape merchants | Mid | Hard landscaping + trade | Compete for the trade account; no retail experience, plants or café |
| Supermarkets & DIY sheds | Large | Commodity plants & seasonal | Price on basics; no advice, range, nursery stock or destination pull |
| Online plant & garden retailers | National | E-commerce | Convenience on known items; no café, advice, instant collection or day out |
| Local independent nurseries | Small | Plants only | Narrow range, no café or hard goods, succession-fragile |
Destination-led and high-touch
Hollowbrook sits upper-right: a destination-experience business, premium and advice-led, more of a day out than the sheds and more rooted and personal than the chains. The freehold catchment and the café are what put it there.
Why a new entrant cannot easily win the catchment
A 7-acre freehold destination
A main-road site with parking, glasshouses and a café, bought below the cost of building one. A shed or a website cannot offer the day out, and the freehold is not being made any more.
Café + range + advice
The café earns a visit rather than an errand, which lifts dwell time and basket. Advice and own-grown range keep the margin the sheds compete away on commodity lines.
Trade under the footfall
An 85%-retained trade base gives a year-round floor beneath the seasonal retail, and 30 years of local loyalty and a scheme covering 40% of retail spend keep people coming back.
Working capital
The seasonal-inventory story: how stock swings through the year, the trade debtors underneath it, and the normalized peg that sets the price.
Stock swings with the season — the peg date matters
Inventory by month
£ thousands · builds before spring, drawn down through the peak
The peg, and how it reconciles
| £ 000s (normalized) | Amount | Note |
|---|---|---|
| + Inventory (normalized) | 450 | Seasonal stock |
| + Trade debtors | 70 | Trade accts, 30-day |
| − Trade creditors | (280) | Supplier terms |
| − Other (accruals, deferred) | (30) | Loyalty, deposits |
| = Net working capital (peg) | 210 | ~6.2% of rev |
Inventory 450 + debtors 70 − creditors 280 − other 30 = 210. Retail and café are cash/card, so debtors are trade-only. Supplier terms fund a large share of the seasonal stock build.
NWC composition
£ thousands · what the peg is made of
Atomised retail, a diversified trade book, clean debtors
| Top trade accounts | Type | % of trade rev |
|---|---|---|
| Cotswold Landscapes Ltd | Landscaper | 6.0% |
| Blenheim Estate Gardens | Estate | 4.4% |
| Riverside Garden Design | Designer | 3.6% |
| Two Valleys Groundcare | Grounds | 3.0% |
| Ashcombe Property Maint. | FM | 2.6% |
| Next 5 accounts | 11.4% | |
| Top 10 (of trade) | 31.0% | |
| Other 130 accounts | 69.0% |
Trade is 22% of total revenue, so the largest trade account is ~1.3% of company revenue. Retail (70%) is fully atomised across ~180k visitors.
AR aging (trade debtors)
DSO ~34 days · trade AR ≈ £70K
No supplier over 20%
Own-grown nursery stock plus a diversified base of growers and distributors on 30–45 day terms. Substitutable; no exclusive dependencies.
Financing
How a buyer funds the acquisition: the freehold-secured mortgage, the cash-flow debt, coverage, and the buy-versus-lease choice on the property.
Mostly equity and property-secured debt
Funding mix
Sources of the £4.2M bundled purchase
| Instrument | Amount | Rate | Secured on |
|---|---|---|---|
| Freehold mortgage (60% LTV) | £1,140K | 7.0% | Freehold |
| Acquisition term loan | £550K | 8.5% | Business |
| Vendor note (subordinated) | £150K | 5.0% | — |
| Total debt | £1,840K | 3.4× EBITDA | |
| Buyer equity | £2,360K | 56% | |
| Total capital | £4,200K |
Cash-flow leverage — the term loan and vendor note serviced from trading — is only £700K, 1.3× adjusted EBITDA. The £1.14M mortgage is asset-backed and long-dated; a buyer who leases carries no mortgage at all.
The cash-flow debt clears; the mortgage is long-dated
Acquisition term loan balance
£ thousands · 7-year amortization
| Term loan · £000s | Begin | Int | Prin | End |
|---|---|---|---|---|
| Year 1 | 550 | 47 | 61 | 489 |
| Year 2 | 489 | 42 | 66 | 423 |
| Year 3 | 423 | 36 | 72 | 351 |
| Year 4 | 351 | 30 | 78 | 273 |
| Year 5 | 273 | 23 | 85 | 188 |
Term loan fully amortizes by year seven. Vendor note: interest-only years 1–2, then amortized years 3–5. The freehold mortgage is a separate 20-year facility secured on the property, not on trading cash flow.
DSCR comfortably above covenant throughout
Cash flow vs debt service
£ 000s bars · DSCR ratio labelled
| £ 000s | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|
| CFADS | 323 | 353 | 388 | 416 | 449 |
| Debt service | 223 | 235 | 265 | 265 | 265 |
| DSCR | 1.45× | 1.50× | 1.46× | 1.57× | 1.69× |
| Cash-flow debt/EBITDA | 1.2× | 1.0× | 0.8× | 0.6× | 0.3× |
Debt service on the term loan, vendor note and mortgage combined. Covenant (typical): min DSCR 1.25×. Lowest DSCR is 1.45× (Yr1) — ~16% cushion above the floor. CFADS on the operating plan; a −10% revenue shock still clears 1.25×.
Conservative debt, and a real choice on the freehold
£4.2M all-in, no rent
Own an appreciating £1.9M asset, keep all £545K of EBITDA, fund with a 60% LTV mortgage. Higher equity, but property upside and no landlord.
£2.0M + £150K/yr rent
Release £1.9M of capital and the mortgage. The £150K rent is ~7.9% of the freehold value, so the trade-off is a financing choice, not a change in what the business is worth.
DSCR 1.45–1.69×
Comfortable headroom above a 1.25× covenant across the plan. Cash-flow leverage is only 1.3×; the seasonal, freehold-backed profile holds a −10% revenue shock.
How the transaction is put together
| Term | Position |
|---|---|
| Structure | Asset sale of the operating business; freehold by separate SPA or 15-yr FRI lease |
| Headline price | £2.0M business (~3.7× adj. EBITDA) + £1.9M freehold, or lease at £150K/yr |
| Basis | Cash-free, debt-free |
| Working capital | Normalized stock peg (~£210K NWC), seasonal true-up at completion |
| Included | Goodwill, brand & name (retained), trade book, stock at valuation, fixtures, café fit-out, plant, website, IP |
| Excluded | Surplus cash, owner's personal assets; freehold handled separately |
| Vendor take-back | £150K seller note, 3-yr, subordinated |
| Escrow / retention | 10% for 12 months against reps & warranties |
| Transition | 3-month handover through the spring season + non-compete |
| Seller conditions | Name retained; team offered continuity |
Clean liabilities, stock at valuation
An asset sale leaves historic liabilities behind and takes stock at an agreed valuation. A share sale stays open if tax and continuity of trade licences favour it.
Buy or lease, buyer's choice
Buy the 7-acre site for £1.9M or take a 15-year FRI lease at £150K/yr (~7.9% yield). Pricing the business independently keeps goodwill and bricks cleanly apart.
No stock surprises at close
A normalized ~£210K NWC peg with a defined reference method, trued up dollar-for-dollar, so the calendar of the spring stock build does not distort the price.
How the process runs from here
- NDA & data-room accessfull document access; questions to Top Tier Advisory
- Management meeting & site visitwith Margaret and the retail manager, ahead of an indicative offer
- Indicative offer (IOI)business, plus freehold buy-or-lease, for discussion
- Confirmatory diligencestock take, trade-book review, RICS survey, under continued confidentiality
- SPA & completionwith the spring handover and vendor note
Top Tier Advisory
Represented by Top Tier Advisory. Illustrative sell-side sample.