Undersea Adventures IM

Undersea Adventures Ltd 160928 | Information Memorandum

Contents

Financial Highlights

4

Marketing & Sales

12

Executive Summary

5

Location & Facilities

13

Growth Opportunities

14

History & Ownership

7

Financial Information

15

Products & Services

9

Glossary of Terms

17

Management & Staff

10

Disclaimer

18

Customers

11

3

Undersea Adventures | Information Memorandum

Financial Highlights

1200

600

1000

500

800

400

600

300

200

400

Turnover £'000

Gross Profit £'000

100

200

0

0

FY 18

FY19

FY 20

FY 21

FY 18

FY19

FY 20

FY 21

4

Undersea Adventures | Information Memorandum

Executive Summary

Executive Summary

Services

1.1. Undersea Adventures Limited (UA or the Company) offers a comprehensive, customer-focused service for those who wish to pursue or develop their interest in water sports. 1.2. UA supplies products suited to all levels of ability, both at its Cornwall-based shop, and its constantly expanding online store, whilst also supplying the highest quality of specialised water sports equipment to more experienced users.

1.5. The Company supplies customers with a selection of high-quality water sports equipment from a range of reputable brands, for the uses of sport and leisure.

1.6. Alongside water sports equipment, the Company also offers triathlon equipment for users alongside a community of water sports enthusiasts.

1.7. The main services the Company offers are:

• Scuba Diving Gear • Snorkelling equipment • Wetsuits • Sailing Gear • Beach & Outdoor Equipment • Scuba Packages • Triathlon equipment

History and Ownership

1.3. UA was established in 1989 by Michael and Carol George who are both highly experienced in all operations and whose expertise has contributed to the continued success of this Company.

1.4. Over the years the Company has built up its product offering and established a strong and loyal, repeat customer base.

5

Undersea Adventures | Information Memorandum

Customers

1.8. The customer base is split between 53% repeat custom and 47% new custom with a lot of customers being generated from its established reputation both locally and online.

1.9. The Company currently has a database of over 180,000 customers and a mailing list of 11,600.

Management and Staff

1.10. UA’s long-standing reputation as Cornwall’s primary choice for users wanting to become involved in a helpful and friendly water sports community is largely testament to the expertise of owners, Michael and Carol George, and the workforce they have developed.

1.11. The Company’s staff base comprises our clients alongside five other staff members who operate the online and instore retail of goods under our client’s management.

1.12. Our clients also advise their managerial roles would need to be filled post-sale.

Location and Facilities

1.13. As of 2021, UA operates entirely online, and so the Company is now being offered as a fully relocatable opportunity.

Growth Opportunities

1.14. UA has an established presence both locally and online that could grow further through further online and press advertising and a presence at consumer fairs and events.

1.15. Our clients advise that UA is an ideal investment opportunity for established online B2C distribution businesses who may be looking to expand.

1.16. UA could seek to advertise in further diving publications, an asset that has already gained the Company more custom.

1.17. The wetsuit sales department of the Company has been growing exponentially in recent years, an area that could be built upon through strengthening relationships with suppliers, paired with making the service more overt on the Company website and advertising releases.

6

Undersea Adventures | Information Memorandum

History & Ownership 2 History

2.1. The Company opened initially as a PADI dive centre in 1989 and has built its service offering and customer base over its almost 30 years of operation.

2.2. The Company now focuses primarily on the sale of dive training equipment, as opposed to lessons, and other water sports equipment and is ideally located along the south coast.

2.3. Over its years the Company has gained recognition for its unmatched level of product supply and attitude of meticulousness in its products.

2.4. The table below details the Company’s history:

Year

Event

1989

The Company was established in Cornwall as a scuba diving centre.

1995

UA moved to an industrial unit on the outskirts of Penzance.

The Company introduced GUL wetsuits to its product range and expanded further with many other top watersports brands including Crewsaver, Gill, Typhoon products.

1999

2002

The Company launched its new online shop with a wide range of products to purchase directly from the site.

After 14 years of operating the scuba diving and training side, UA decided it was time to switch the emphasis to the online shop, which is now the largest part of the business, and subsequently sold off the scuba diving and training side of the business.

2004

2005

The Company moved into its current premises in Hayle, Cornwall.

2009

UA installed a mezzanine floor at its premises to enable it to expand its stock holding.

2016

The Company introduced its online triathlon store to the business, effectively doubling its product range.

UA closed its triathlon store, as margins were becoming increasingly difficult due to competition from its own suppliers.

2018

7

Undersea Adventures | Information Memorandum

Ownership

2.5. Since the Business’s inception it as been solely owned by Michael and Carol George who are equal shareholders and who bring a wealth of knowledge from their 25 years’ experience. The owners now seek to sell the Company to accommodate retirement plans.

2.6. Our client has approved a mutually agreeable handover period to ensure the transition of the Company goes smoothly.

2.7. The table below details the shareholding of UA:

Name

Position

Shareholding

Michael I George

Managing Director

50%

Carol J George

Director

50%

8

Undersea Adventures | Information Memorandum

Products & Services 3 Overview

3.1. UA is unmatched in the fact that no other service offers customers a rounded and diverse choice of water sports products at the value and selection of brands the Company is able to stock.

3.2. UA offers products for beginners and experienced users who want to progress or simply get a taste of water sports, an uncommon but extremely effective and accommodating niche.

3.3. The main services the Company offers are:

• Scuba Diving Gear – Starter packages, Bags, Books and Dive guides, accessories for diving, clothing. • Snorkelling equipment – Starter sets, accessories, bags, books and guides, footwear, wetsuits and UV protection. • Wetsuits – suitable for men, women and children offering boots, hoods and gloves, rash vests and thermals. • Sailing Gear – accessories, buoyancy aids and life jackets, clothing, footwear, gloves and hats and rash vests for sailing. • Beach & Outdoor Equipment – Beach bags, bodyboards and UV protection. • Scuba Packages • Swim and triathlon gear – goggles, swimwear, accessories and triathlon gear.

3.4. The Company is dedicated to delivering the maximum level of quality to users through supplying thoroughly tested, durable specialist products from household brands, a measure that instils comfort in first-time divers.

3.5. UA’s strong relationships with well-known brands allow for it to maintain a strong stock of professional quality water sports and diving equipment for all levels of service user.

3.6. A particularly successful aspect of the Company in recent years has been its extensive range of wetsuits, an area of business that could be further expanded upon.

3.7. The Company also offers a range of quality brand triathlon and open water swimming equipment, adding to its rounded service offering.

3.8. Amongst UA’s evolving range of endurance sports products and training equipment it offers customers:

• Open Water Swimming Gear • Triathlon Gear • SwimRun Gear

9

Undersea Adventures | Information Memorandum

Management & Staff 4 Management 4.1. The daily running of UA is currently reliant upon owners, Michael and Carol George. However, our clients have indicated that the expertise required to run the business could be imparted to new buyers through the current owners.

5

Key Employees

Position

Experience (Years)

Buyer/Admin/Sales

20

Staff

Part-time Warehouse Operative

20

4.2. The Company’s dedicated workforce comprises a total of seven staff, including the Directors, who all contribute to the daily operation of the Company

Warehouse Operative

11

4.3. The following table details the Company’s key employees:

Buyer/Admin/Sales

10

Business System/Web Developer

2

10

Undersea Adventures | Information Memorandum

Customers

Overview

5.1. UA offers products that are appropriate for all aptitude of diver, triathlete and swimmer. Whether experienced or a novice, the customer can be assisted with equipment to better their chosen pursuit or to begin altogether.

5.2. The Company currently has a database of over 180,000 customers and a regular mailing list of over 11,600 customers.

5.3. The Company aims to accommodate customers’ needs in terms of promptly supplying the most appropriate products and its accounts with various courier services ensure all equipment is delivered undamaged and in a timely manner.

5.4. UA can offer advice, when requested, to ensure the correct equipment supplied is appropriate to the level of experience of the customer.

11

Undersea Adventures | Information Memorandum

Marketing & Sales 6 Marketing 6.1. UA holds long-standing relationship with users both locally as well as supplying individuals spread across the UK, through its supply of thoroughly tested products to students who want to become proficient in water sports.

Sales

6.5. UA is already showing a big increase in customer conversions after recently undergoing a major website refresh, moving to a platform which offers much more flexibility and potential for substantial further growth.

6.2. The Company currently utilises the current methods of advertising:

6.6. A new owner could build upon UA’s reputable online order system and links with delivery services in order to expand locations which the Company can accommodate.

• Email campaigns • Social media • Effective SEO • Google Ads • Bing Ads

6.3. Repeat customers account for 53% of the Company’s revenue. However, the Company does gain a lot of interest from new customers with it making up the remaining 47%. Any demand for new customers could be resolved through executing untapped resources like attending consumer shows and events. 6.4. Currently, the Company relies upon its established reputation in order to gain custom, with a strong amount of word of mouth referrals. Alongside this it also uses an informative website, which can be found at the address below:

watersportswarehouse.co.uk

12

Undersea Adventures | Information Memorandum

Location & Facilities 7 Overview

7.1. Alongside an established online store responsible for 80% of sales, with a fast and easy to use online ordering service comprising UA’s fully comprehensive range of service offerings, the Company also operates a physical shop based in Cornwall used for stocking equipment and running its website.

7.2. The Company’s 3,950 sq ft, freehold warehouse premises are used for storage, general warehouse operations and office work and can be found at the address below:

Watersports Warehouse, 7 Hayle Industrial Park, Hayle, Cornwall, TR27 5JR

7.3. The property will not be included in the sale but a new owner will be presented the opportunity to rent the premises for £30k per annum.

13

Undersea Adventures | Information Memorandum

Growth Opportunities 8 Growth Opportunities 8.1. UA holds various trusted accounts with main water sports equipment brands which could be expanded further to widen the Business’ product and service offering. 8.2. The addition of international domains and a website available in other languages would expand the Company’s services into the international market. 8.3. Furthermore, UA could establish a rental service for prospective buyers, to entice new customers and permit those not wanting to fully invest in the full price of the equipment, a taste of water sports. 8.4. The Company could look to further build on its relationships with local clubs and events, setting up stands to recruit potential members at events and competitions which will in turn expand the local diving, triathlon and water sports communities in the area.

8.6. UA previously operated a website exclusively selling triathlon equipment and still owns the domain. As the triathlon equipment side of the website has been growing at a steady rate with a clear market for this service, a new owner could look to revive this section of the Company which could be expanded further by establishing additional links with distributors in order to increase product selection and lead times. 8.7. UA possesses opportunities to reestablish its line of own branded products, Reefwear. A high-quality collection of products the Company previously developed, selling snorkelling equipment, wetsuits, dry bags and accessories. This aspect of business was discontinued due to the banking crises; however, our client advises that this is an area with vast potential which would provide a new owner with complete control over product margins.

Marketing opportunities

Business Development

8.8. UA could seek to advertise in further extreme sports and water sports publications to drive repeat business in his area and expand the visibility of its brand both locally and nationally.

8.5. It has been expressed by our client that there is clear potential to expand the already high number of users from local surfing/triathlon community who purchase wetsuits from the Company which could be furthered through exclusively advertising to this demographic.

8.9. Further to this, the Company has an underutilised social media influencer presence which

14

Undersea Adventures | Information Memorandum

Financial Information

YE18 £

YE19 £

YE20 £

YE21 £

Profit and Loss (£)

Turnover

964,371

598,100

683,451

1,040,002

Cost of Sales

(577,681)

(351,124)

(370,853)

(558,832)

Gross Profit

386,690

246,976

312,598

481,170

Gross Profit Margin

40%

41%

46%

46%

Overheads/Administrative Expenses

(413,318)

(260,425)

(222,027)

(295,030)

Other Operating Income

-

-

55,271

20,781

EBIT

(26,628)

(13,449)

145,842

206,921

Depreciation

3,362

3,055

2,613

2,260

EBITDA

(23,266)

(10,394)

148,455

209,181

Directors’ Remuneration

16,680

17,120

18,448

16,680

Sundry Expenses

-

-

496

419

Adjusted EBITDA

(6,586)

6,726

167,399

226,280

15

Undersea Adventures | Information Memorandum

YE18 £

YE19 £

YE20 £

YE21 £

Balance Sheet (£)

Fixed Assets

Tangible Assets

322,343

319,811

317,198

18,438

Current Assets

Stocks

201,413

165,985

110,806

150,879

Debtors

1,580

742

742

754

Cash at Bank

9,372

5,612

67,949

78,449

Total:

212,365

172,339

179,497

230,082

Creditors: Amounts falling due within one year

(441,321)

(426,295)

332,730

125,673

Net Current Assets

(228,956)

(253,956)

(153,233)

104,409

Creditors: Amounts falling due after one year

133,389

123,720

162,137

45,281

Net Assets/Liabilities

(40,002)

(57,865)

1,828

91,927

Capital and Reserves

Called Up Share Capital

100

100

100

100

Retained Earnings

(40,102)

(57,965)

1,728

77,466

Shareholder Funds

(40,002)

(57,865)

1,828

77,566

Note: During the pandemic of 2020, sales reduced significantly until lockdown restrictions were eased. Additionally all staff were furloughed with surpport from the government furlough scheme. Our clients advise that despite the pandemic, prospects have improved as a result of consumer’s move towards online shopping.

16

Undersea Adventures | Information Memorandum

Glossary of Terms

Abbreviation

Definition

The Company/UA

Undersea Adventures Limited

YE

Year Ending 30th November

EBITDA

Earnings before interest, tax, depreciation, amortisation

17

Undersea Adventures | Information Memorandum

Disclaimer

This Information Memorandum (“the Document”) is provided solely for use by the recipients in considering their interest in acquiring the Company. This Document is not a prospectus and does not constitute or form any part of any offer or invitation to subscribe for, underwrite or purchase securities, nor shall it or any part of it form the basis or be relied upon in any way in connection with any contract relating to any securities. The sole purpose of this Document is to assist the recipient in deciding whether it wishes to proceed with a further investigation of the Company. It is not intended to form the basis of any investment decision or decision to purchase the Company. The information contained in this Document is selective and is subject to updating, expansion, revision and amendment. It does not purport to contain all the information that recipients may require. No obligation is accepted to provide recipients with access to any additional information or to correct any inaccuracies which may become apparent. Recipients should conduct their own investigation and analysis of the Company and of the information contained in this Document, and are advised to seek their own professional advice on the legal, financial, taxation and other consequences of providing funding to the Company. This Document includes certain statements, estimates and projections with respect to the anticipated future performance of the Company and as to the market for the Company’s products. Such statements, estimates and projections reflect various assumptions made by the Management of the Company concerning anticipated results, which assumptions may or may not prove to be correct. No representation is made as to the accuracy, reasonableness or completeness of such statements, estimates and projections. Knightsbridge Business Sales (“Knightsbridge”) has not independently verified any of the information contained or opinions expressed herein. Neither the Company, nor Knightsbridge, nor affiliated partnerships or bodies corporate, nor the directors, shareholders, managers, partners, employees or agents of any of them, makes any representation or warranty, express or implied, as to the accuracy, reasonableness or completeness of the information contained in the Document. All such parties and entities expressly disclaim any and all liability for, or based on or relating to any such information contained in, or errors in or omissions from, this Document or based on or relating to the recipients’ use of the Document. This Document is confidential being for use only by the persons to whom it is issued and who have signed the required form of confidentiality agreement. Accordingly, the contents of this Document, including the Personal Data (as defined in UK data protection legislation, being the Data Protection Act 1998, the Privacy and Electronic Communication (EC Direction Regulations 2003) and any replacement legislation coming into force from time to time including (without limitation) the General Data Protection Regulation 2016/679 of the European Parliament together with any codes of practice or other guidance issued by any competent regulatory authority) herein, and any other information, Personal Data or opinions subsequently supplied or given in connection with the proposed sale will constitute information pertaining to the Company (“Confidential Information”) and may not be published, reproduced, copied or disclosed to any person other than the professional advisers to the recipient of this Document having a need to know and who are aware that it is confidential, nor used for any purpose other than in connection with the proposed acquisition. Notwithstanding any other provision or obligation in this Document, the signed confidentiality

agreement shall apply in all respects to the Confidential Information and in the event of a conflict between the signed confidentiality agreement and this Legal Note the confidentiality agreement shall prevail. In the event that the recipient does not continue with his interest in the Company, this Document must be returned to Knightsbridge. The recipient will keep the Confidential Information supplied or given to it or its agents or advisers in connection with the proposed sale safe and secure so as to prevent any unauthorised person having access to it, and the recipient agrees that the information is proprietary to the Company and it has no rights to it except as set out in this notice. Neither the receipt of this Document by any person nor any information contained in it or supplied with it or subsequently communicated to any person in connection with the proposed funding of the Company constitutes, or is to be taken as constituting, the giving of investment advice by Knightsbridge to any such person. Recipients of this Document shall not be deemed to be Customers of Knightsbridge and Knightsbridge shall accordingly not be responsible to such recipients for providing the protections afforded to Customers of Knightsbridge or for providing advice in relation to any transaction or arrangement referred to herein. Each such person should make its own independent assessment of the merits or otherwise of acquiring the Company and should take its own professional advice. This document has been issued on the basis that it falls in the exemptions to Section 21 of the Financial Services Markets Act2000 (“FSMA”) set out below. It is directed only at: Persons having professional experience in matters relating to investments as described in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “Financial Promotion Order”); • High net worth companies, unincorporated associates, partnerships or trusts or their respective directors, officers or employees as described in Article 49(2) of the Financial Promotion Order; • High net worth companies, as defined in Article 49(2); and Certified sophisticated investors as defined in Article 50(1). The content of this document has not been approved by an authorised person and that approval is, unless this exemption or any other exemption applies, required by Section 21 FSMA. Recipients should note that reliance on this document for the purpose of engaging in any investment activity may expose them to a significant risk of losing all sums invested or of incurring additional liability. If recipients are in any doubt as to the action they should take, they should consult an advisor authorised under FSMA specialising in advising on investments of the kind set out in this document. The distribution of this document in certain jurisdictions may be restricted by law and therefore persons in possession of this document should inform themselves about and observe any such restrictions. Any such distribution could result in a violation of the law of such jurisdictions. No shares or other securities of the Company have been or will be registered or otherwise qualified for sale or resale under Federal or State laws in the United States of America or Canada. Neither the US Securities and Exchange Commission nor the Securities Commission of any State of the United States has approved or disapproved the

18

Undersea Adventures | Information Memorandum

shares of the Company or passed on the accuracy or adequacy of this Document. Each recipient doing business in or organised under the laws of the United States of America or in areas subject to its jurisdiction represents that it is an institutional investor, expressing an interest for its own account and agreed not to purchase, distribute or sell any of the Company¹s securities or any interest therein except in compliance with the above laws. The Shareholders expressly reserves the right to alter or terminate the process and to accept or reject any preliminary or final offers at any time, in either case, without giving reasons therefore. In furnishing the Document, the shareholders undertake no obligation to provide any additional information or to update this Document or to correct any inaccuracies in this Document which may become apparent. In no circumstances may recipients or their officers, employees, agents and professional advisers make contact with the Management, employees, Customers, agents or suppliers of the Company until permission to do so is given in writing by Knightsbridge.

Contact Details

For further information regarding this opportunity, or to arrange a meeting, please contact a member of our team below:

Knightsbridge Team

Phone: 01204 555 084

Email: lyddon@knightsbridgeplc.com

(Strictly by appointment through the Offices of Knightsbridge Commercial)

19

Undersea Adventures | Information Memorandum

KBS House 5 Springfield Court Summerfield Road Bolton Greater Manchester BL3 2NT

T: 01204 555 050 E: buy@knightsbridgeplc.com www.knightsbridgeplc.com