Silverwood Brands is a listed UK company that seeks out investment opportunities within a network covered by its directors. The focus is on the food, organic food, wellness, lifestyle and leisure sectors. The company is aiming to develop a diversified portfolio of consumer facing brands and businesses, ranging from established brands to smaller ventures.
Silverwood’s main objectives are to scale its individual brands through a review of their product offerings, marketing arrangements, supply chain economics and financing. It also tries to realise synergies arising from the inclusion of individual brands into a diversified portfolio, ultimately to increase shareholder value and fuel returns.
Top notch skincare brands
Last year the company raised £1.99m by way of a subscription of new ordinary shares. It acquired Balmonds Skincare in June last year and also recently bought NBY London which trades under the brand name Nailberry, the multi award-winning category leader in non-toxic nail products.
Silverwood Brands put out some punchy results for FY 22 (period ended December 2022) with revenue up 160% YoY and a 191% gain in gross profit. Operating income was down £5.7m.
True to its mandate, the company spent last year on the acquisition trail: the aforementioned Balmonds Skincare and Nailberry acquisitions were followed up Sonotas, which controls two popular Japanese brands,, Steamcream and Cigrarro. The latter transaction was completed in January 2023 and is not included in the 2022 numbers.
“It has been a story of “setting up” our core business by agreeing three full acquisitions,” said Andrew Gerrie, a director with the company. “In 2023, we have a number of opportunities available to us to further build the company. We are continuing to assess them, and will move forward with them if and when they make sense for Silverwood.”
Silverwood Brands creating upside in the beauty and wellness space
Silverwood Brands said its focus is the beauty and wellness sectors. Within this the company states its strategy will simply be to look for brands where the directors believe the opportunity warrants its activity and investment. “This includes brands where we understand the downside and have a better than fair chance of creating upside,” said Gerrie. “We will de-risk the opportunity as far as we can and then take a long term view on building the business or our holding.”
The company aims to build a background of shared facilities and support whilst allowing each brand to retain its own flavour and positioning via a mixture of autonomy and responsibility. That is, room to manage the business to best build that brand and to meet the targets that have been agreed.
- ASOS vs boohoo: Is it time to get back into discount clothing?
- Tectonic Gold reshapes strategy with Godolphin acquisition
- Domino’s vs Greggs: Which looks like the best discount food retailer to buy?
Dispute with Lush over shares transfer
In March Silverwood said it had entered into a sale and purchase agreement for a 19.8% stake in Lush Cosmetics and Cosmetic Warriors, for around £216m payable in Silverwood stock. Lush declined to transfer the Lush shares to Cosmic Circles, a Silverwood wholly-owned subsidiary. The shares in Lush are held by Gerrie, a former Lush director and Alison Hawksley.
Lush is a manufacturer and seller of fresh handmade skincare goods and cosmetic products operating retail outlets in 48 countries and manufacturing facilities in six nations. It is considered a great British success story and Silverwood says it believes the brand has a continued future ahead of it as an international leader in ethical and sustainable business.
In its own statement, Lush said its articles of association contain various provisions which dictate how a transfer of shares is to take place and which are binding on the company and its shareholders. The sale of Lush shares to Silverwood is regarded by the directors of Lush as not permissible when the context includes the beneficial ownership being transferred to Silverwood while legal ownership goes to a separate subsidiary. Lush also said that the price of the shares was required to be paid in cash, not in Silverwood stock.
Advisers to Silverwood Brands were not prepared to confirm the current status of the discussions between Silverwood and Lush when asked by The Armchair Trader. An AGM will be held on 26 July at which we anticipate there will be more detail on this.
