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Purely Organic

Can I have some financial information about this business?

We saw in the section entitled 'What are their sources of finance?' that the company incurred too much debt in its early history. The owners were eventually forced to sell their own home in order to place the business on a viable footing.

Clearly, with the expansion plans that exist for Purely Organic as a result of landing the Russian order, extra financial investment will be needed. But how is the firm to raise the kind of sums needed, if it is not to become indebted once more?

The answer lies in the owners' plans to sell shares in the business. At an asking price of £4000, the shares will not come cheap. But they offer investors a chance to own a part of a rapidly growing company with its culture deeply rooted in the high-growth organic movement.

The owners plan to retain a controlling stake in the business, and will invest the capital in upgrading the firm to meet the new demand. Remember that the order from the Russian distributor is for five years and is renewable after that period.

As a result of the expansion of the firm, its owners expect turnover to grow to £400 000 in the current trading year (2006-07) and then rise to £1 million within five years. And importantly, this revenue growth will be within a debt-free financial structure.

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