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Freddie’s Flowers mini-bond will pay 7.5% – in boxes of blooms

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freddies flowers mini bond will pay 7 5 in boxes of blooms

Freddie Garland – possibly Britain’s most appropriately-named entrepreneur – saw his Freddie’s Flowers home delivery company bloom during lockdown. 

In a rare pandemic success story, subscribers to Garland’s weekly flower delivery service rose from 60,000 to more than 100,000. Annual sales have hit £26million. And now Garland is dreaming big.

Tomorrow, he will launch a ‘Flower Bond’ to let customers invest in the online firm’s growth. In return, investors will twice-yearly cash payments worth 5 per cent a year – or regular boxes of flowers worth 7.5 per cent. 

Flourishing: Freddie Garland says he has flowers in his blood

Flourishing: Freddie Garland says he has flowers in his blood

Flourishing: Freddie Garland says he has flowers in his blood

Garland hopes to raise between £2million and £10million from the four-year mini-bonds, and plans to use the funds from the investment scheme to double the size of his subscription business by 2022.

‘We deliver 40,000 boxes of flowers a week, and we’d like that to be 80,000 within two years,’ he says. ‘If we carried on as we are, ticking along at 100,000 members, we would see a continual line of £2.7million profit, before stripping out marketing and tax, but we are electing to reinvest all that back into the business to fund growth.’

Under Garland’s expansion plans, Freddie’s Flowers will launch its flower delivery service overseas, starting with Germany next week – and will invest in marketing to sign up more of the 3.8million affluent Britons aged 30-plus identified as the ‘Freddie’s demographic’. 

Garland also plans to launch an online shop in November, selling products such as ‘beautiful Japanese floral scissors’, secateurs and Christmas wreaths. ‘It is drifting into a homeware scenario,’ he adds. ‘It is a lovely starting point for something else.’

Garland, 32, grew up helping his parents in their flower shop in Pimlico, Central London, and says he has ‘flowers in my blood’. 

After first doorknock I knew it would work 
Freddie Garland

He founded Freddie’s Flowers aged 26 after quitting his job at organic food firm Abel & Cole because he saw how its subscription model for grocery boxes could be transferred to flowers. He had done no research and had no business plan other than to ‘deliver flowers to people and create joy’.

For the first six months, he did ‘back-to-back, 100-hour weeks’, starting his days at 3am at New Covent Garden flower market before cycling home to start packing flowers in boxes at 6am in a gazebo in his parents’ garden in Wandsworth, South West London.

Then he would go out knocking on doors to drum up custom.

He says: ‘Six years ago today, I did my first doorknock and I cycled out and got three customers in two hours. From then on, I knew my idea was going to work.’ 

Bloomtime: Freddie Garland’s company has 100,000 customers signed up

Bloomtime: Freddie Garland’s company has 100,000 customers signed up

Bloomtime: Freddie Garland’s company has 100,000 customers signed up

Garland now employs 150 people, with former Abel & Cole executives Keith Abel and Ted Bell on his management team, and runs operations from an HQ in Earlsfield, Wandsworth, known as ‘The Shed’.

When deliveries of blooms such as lisianthus, alstroemeria, lilies and peonies arrive from ‘the flower mafia’ in Lincolnshire and suppliers in Holland, they are packed into boxes in a warehouse in Heston in Hounslow, then delivered by a fleet of vans and electric bikes across the UK, covering a spread of locations from Edinburgh to Devon.

Garland says the gross profit margin on each £25 box of flowers is ‘around 45 per cent’, and monthly sales have risen from £225,000 four years ago to £3.3million.

Pre-tax profits for the 12 months to August hit £2.74million, after his customer numbers shot up 73 per cent during lockdown while high street florists and garden centres were closed.

But even before Covid-19, Garland says his subscription model delivering weekly flower boxes direct to people’s homes had the edge over traditional flower shops. 

The 52 flower arrangements he and his colleague Victoria Fisher design each year are planned from a seasonal palette of 350 flowers ordered directly from the growers, cutting out ‘a huge amount of the normal chain that you see with a typical flower shop or supermarket’.

Freddie Garland, 32: Dylan fan 

Lives: Kensal Rise, North West London, with wife Sophie, a primary teacher, and one-year-old son Jesse.

Family: His father Peter ran a landscape contracting business and owned a flower shop in Orange Square in Pimlico. Mother Caroline was a headhunter before becoming a garden designer.

Floral favourite: Alliums

Floral favourite: Alliums

Floral favourite: Alliums

Education: Northcote Lodge prep school in Wandsworth then Marlborough College in Wiltshire. He then studied popular and world music at Leeds University.

Favourite flower: Alliums.

Music: Bob Dylan.

Favourite film: Edward Scissorhands.

Garland says: ‘I work really closely with the growers and our arrangements are planned until August 2021. That means there is minimal waste, which is great for the environment, and we reduce the cut to table time to about three days, whereas a typical flower shop or supermarket takes up to two weeks.’ 

Recalling the wilting blooms in his parents’ shop, he says: ‘All I ever saw was good flowers for a bit but then slightly sadder flowers as they started to wilt – and yet they still managed to sell them.

‘Ours are unbelievably fresh because they are cut to order.’

He adds, diplomatically, that there ‘has always got to be a place for high street flower shops’, but claims his method of delivering boxes of loose flowers ready to be arranged by customers is a ‘whole different ball game’.

Freddie's Flowers has recently been certified carbon neutral, and all deliveries within the M25 will be done by electric bikes within a year

Freddie's Flowers has recently been certified carbon neutral, and all deliveries within the M25 will be done by electric bikes within a year

Freddie’s Flowers has recently been certified carbon neutral, and all deliveries within the M25 will be done by electric bikes within a year

‘We are everyday flowers brightening your home, we are a whole lifestyle,’ says Garland, whose exuberant creations are inspired by Charlie and the Chocolate Factory.

He adds: ‘People join us and quickly realise there is something really creative about having flowers delivered to your home. Everyone needs ten to 15 minutes a week practising a bit of floral yoga – or floga, as I call it.’ 

Freddie’s Flowers has recently been certified carbon neutral, and all deliveries within the M25 will be done by electric bikes within a year, with further ‘pockets’ of electric bikes in Manchester, Birmingham, Southampton and Brighton.

His efforts to disrupt the £2.2billion UK flower market have been noted by retail analysts at PwC, who recently named Freddie’s Flowers as one of the next possible billion-pound British start-ups, alongside sportswear brand Gymshark and online cosmetics brand Cult Beauty.

Garland – who left Leeds University with a third after writing his dissertation on the Beatles album Sergeant Pepper’s Lonely Hearts Club Band – owns a large undisclosed stake in the firm after investing £1.9million of ‘private money’, jointly with co-owners Keith Abel and Ted Bell, to fund the business.

But Garland, who is at his most animated talking about new varieties of Dutch chrysanthemums, says he is driven by his passion for flowers, and that there is currently no official valuation for the business because there are no plans to sell. 

‘Ted, Keith and I have absolutely no plans for exiting the business,’ he says. ‘We are absolutely loving it at the moment.’

He adds: ‘That’s why we took the Flower Bond route. We are a really exciting business that is tipped for big things. We’d love to bring people along for the ride with us.’

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Stop the stamp duty cut driving up house prices by making it permanent

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stop the stamp duty cut driving up house prices by making it permanent

Warned as they may be that it could prove a false economy, aspiring home buyers are busy trying to move before the stamp duty holiday deadline.

In the meantime, the distorting effects of a time-limited stamp duty cut are pushing up house prices, so we should do people a favour and take the property market off the boil by making the cut permanent.

The tax break, which can save buyers a maximum of £15,000 by removing stamp duty on the first £500,000 of a home’s purchase price, runs until the end of next March.

Rightmove's asking price index shows a clear pick-up in the market after the lockdown freeze and stamp duty holiday came in

Rightmove's asking price index shows a clear pick-up in the market after the lockdown freeze and stamp duty holiday came in

Rightmove’s asking price index shows a clear pick-up in the market after the lockdown freeze and stamp duty holiday came in

You would think that should be more than enough time to go house hunting, put yours on the market, have offers accepted, get a mortgage, survey and conveyancing sorted and be handed the keys in time for the Easter holidays.

However, a growing number of property industry voices are warning that it may not be.

It’s easy to dismiss these claims as the voices of those with a vested interest – and I’d certainly take that into account when you hear them – but there is a nugget of truth in the matter.

The home buying process has slowed in lockdown and mortgage brokers and solicitors will tell you that most things are taking longer than they should: from mortgage offers and underwriting, to searches and other conveyancing due diligence.

The Chancellor, Rishi Sunak, will want to defend his stamp duty cut against claims it has driven up house prices

The Chancellor, Rishi Sunak, will want to defend his stamp duty cut against claims it has driven up house prices

The Chancellor, Rishi Sunak, will want to defend his stamp duty cut against claims it has driven up house prices

So, should those who want to move home and save money rush into action?

That’s a matter of personal choice, but before panicking that time is running out it is worth considering the false economy element.

The housing market has been going through a mini-boom over summer. It began in some parts of the market before Rishi Sunak’s big tax break but was spurred on further by the stamp duty cut.

Inevitably, despite estate agents talking a good game on not overpricing, this has ended up with asking prices rising and more people than you’d think in the middle of a massive recession agreeing to pay over-inflated prices.

The latest figures from property listing site Rightmove showed the average asking price up £17,000 over the past year to £323,530.

You can ask what you want, it doesn’t mean you’ll get, but price paid data from the ONS / Land Registry also shows prices rising, with the average house price £5,500 higher in August at £239,200 than at the start of lockdown.

Meanwhile, Rightmove claims that sales agreed were up 58 per cent in October on a year ago and homes that go under offer are taking on average 50 days to find a buyer – shorter than ever before.

The average time it takes for homes that go under offer to secure a buyer has got shorter, according to Rightmove

The average time it takes for homes that go under offer to secure a buyer has got shorter, according to Rightmove

The average time it takes for homes that go under offer to secure a buyer has got shorter, according to Rightmove

Not all of this is the stamp duty holiday effect, but speak to estate agents and look at the data and you will clearly see it is fuelling gains.

All of that adds up to yet more evidence that racing to buy at this point in a stamp duty holiday is likely to see you pay more.

Add to this that previous temporary breaks have seen a rush to beat the deadline followed by a lull afterwards, and you can comfortably back up the false economy argument.

That combined with the undesirable nature of a further rise in house prices lies behind justified criticism of the stamp duty holiday.

Nonetheless, I still feel that slashing the tax on buying a home is a good move.

Until Gordon Brown started meddling with it, stamp duty was a flat 1 per cent of a property’s purchase price. Now after successive governments cashed in on house price inflation, it can present ordinary families with a bill of tens of thousands of pounds for moving home.

Rationally speaking, people have a finite amount of money from savings, equity and mortgage and so stamp duty shouldn’t make a difference to the decision to buy or not.

However, behavioural economics picked apart the rational actor argument long ago and I’m sure it wouldn’t take too long to prove that the prospect of £25,000 tax bill for moving home means that people do it less.

The problem is that if you just cut stamp duty temporarily it stokes the market up and inflates house prices, so take the heat out of that by lowering it for good.

I’m sure Rishi Sunak would like to defend his stamp duty holiday against the critics, the best way to do that would be to make it permanent.

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Tesla on track to deliver 500,000 cars despite Covid

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tesla on track to deliver 500000 cars despite covid

Tesla smashed through Wall Street’s expectations as it released its thirdquarter results last night.

The electric car maker said revenue rose to a record £6.7billion from £4.8billion a year earlier — well ahead of the £6.4billion analysts had pencilled in.

And its profit hit £534million for the three month period, higher than estimates of £404million. 

Electric car maker Tesla, led by Elon Musk (pictured) said revenue rose to a record £6.7bn from £4.8bn a year earlier - well ahead of the £6.4bn analysts had pencilled in

Electric car maker Tesla, led by Elon Musk (pictured) said revenue rose to a record £6.7bn from £4.8bn a year earlier - well ahead of the £6.4bn analysts had pencilled in

Electric car maker Tesla, led by Elon Musk (pictured) said revenue rose to a record £6.7bn from £4.8bn a year earlier – well ahead of the £6.4bn analysts had pencilled in

Tesla, led by maverick entrepreneur Elon Musk, had already reported that it delivered 139,300 vehicles during the quarter — a record.

But if it is to meet its goal of delivering half a million cars in 2020 — a target it has stuck to despite Covid — it must send out more than 181,600 vehicles in the last three months of the year.

Tesla said last night that it would still meet the target, but that it was becoming increasingly difficult. 

But shares still jumped more than 2 per cent in afterhours trading as investors who were worried about Tesla’s ability to hit targets had their concerns eased.

Adam Vettese, an analyst at investment platform eToro, said: ‘Tesla’s skyhigh valuation will be causing some investors to worry. 

34681090 0 image a 12 1603314780135

34681090 0 image a 12 1603314780135

Paying a premium for a stock isn’t necessarily an issue but it does mean that the electric car giant will need to keep shifting through the gears if it is to avoid a share sell-off.’

The Tesla figures came after an update from Netflix disappointed investors. 

The streaming giant added 2.2m paid subscribers around the world in the three months to the end of September. 

That was the weakest growth rate in four years and compared with the 15.8m paying customers it gained between January and March as the Covid-19 pandemic forced people to stay home.

Netflix shares almost 7 per cent – wiping £12.3billion off the value of the company. However, it was still worth more than £160billion having seen its shares rise more than 50 per cent this year.

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Steelworkers cheer £2bn pension deal: 30,000 set for retirement boost 

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steelworkers cheer 2bn pension deal 30000 set for retirement boost

Thousands of steelworkers will be hoping to receive a boost to their pension pots following a £2billion deal.

Specialist insurance provider Pension Insurance Corporation (PIC) has agreed to buy out the Old British Steel Pension Scheme and take responsibility for more than 30,000 workers’ retirement funds.

The scheme was dumped into the Government’s pensions lifeboat, the Pension Protection Fund (PPF), after former owner Tata Steel restructured its business in 2017.

Pensions rescue: Specialist insurance provider Pension Insurance Corporation has agreed to buy out the Old British Steel Pension Scheme

Pensions rescue: Specialist insurance provider Pension Insurance Corporation has agreed to buy out the Old British Steel Pension Scheme

Pensions rescue: Specialist insurance provider Pension Insurance Corporation has agreed to buy out the Old British Steel Pension Scheme

The PPF spent more than two years analysing it and in the spring concluded its funding was more robust than expected. 

This meant the scheme did not need to stay in the fund and could be taken over by an insurance firm.

What members can receive by being in the PPF can differ depending on a variety of factors. 

PIC says that under the deal every pension will now be ‘at or above’ the levels that would have been received in the protection fund.

Many will take home more because the extra funding available will be distributed into their pension pots.

The arrangement has been praised by the industry and unions.

A spokesman for steelworkers’ union Community said: ‘This is welcome news as it means many scheme members should be better off than they would otherwise have been.

‘The buy-in supports what the trade unions have always said, that the British Steel Pension Scheme was a well funded scheme that could not be allowed to collapse into the PPF.’

An industry source said the deal would be ‘like Christmas’ for those who had been expecting to receive the PPF’s terms.

But PIC has not revealed any details. It has not said who will get more than they would have done had the scheme remained in the protection fund, or how much any uplift might be.

Those in the scheme will not find out what they are owed until the deal completes at the end of next year. About half of the 30,000 members receive a pension.

PIC has around £48billion in assets and manages pension schemes for the likes of BHS, Cadbury and the London Stock Exchange Group. 

It is tightly regulated but if it runs into difficulties, its shareholders, which include the Abu Dhabi Investment Authority and South Africa’s wealthy Rupert family, will be forced to pay up and cover the costs of the pensions. 

If PIC were to collapse, then all members’ pensions would be covered fully by the Financial Services Compensation Scheme.

Jonathan Hazlett, managing director of Open Trustees, which is running the scheme, said: ‘Whilst the PPF provides a valuable safety net and a significant level of protection, many members will now receive higher benefits than they might otherwise have expected had the scheme entered the protection fund.’

The British Steel pension scheme is not related to British Steel, the company that operates steelworks in Scunthorpe and bought out of liquidation by Chinese group Jingye.

The pension scheme dates back to 1967 when it covered employees at the former British Steel, which then became Corus in the 1990s before being sold to India’s Tata Steel in 2007.

Tata, which operates the sprawling Port Talbot plant in South Wales, wanted to sell its UK business in 2016 but agreed to keep it on following an outcry from ministers and unions.

The retirement scheme had been a millstone around Tata’s neck and it eventually struck an agreement to hold on to its UK arm in return for a major restructuring of its pensions liabilities.

Under the deal, Tata agreed to shut the final salary pension scheme and replace it with a less generous alternative. 

Tata also injected a £550million lump sum into the fund and gave the PPF a 33 per cent stake in its UK business.

Most of the British Steel Pension Scheme’s 120,000 or so members chose to transfer into a new fund in 2018.

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