LONDON, UK: Huddled Group plc (AIM:HUD) announced the acquisition of online retailer Food Circle Supermarket for total consideration of up to £300,000.

The acquisition comprises the entire stock, intellectual property and website (www.foodcirclesupermarket.co.uk) and other social channels of Food Circle.

Founded in 2018, by owner/operators Paul Simpson and James Barthorpe, Sheffield-based Food Circle is an online, direct-to-consumer retailer specialising in discounted foods for healthy and specialised diets such as high-protein and energy products. Food Circle serves customers across the UK and has become a trusted partner for well-known brands within this market, including Huel, Nakd, Grenade and Optimum Nutrition, amongst others.

Food Circle delivers an average of c. 3,000 orders per month, with an average order value of c. £40. It places a strong emphasis on providing good value and excellent service to customers and has over 5,000 TrustPilot reviews, with a rating of ‘Excellent’ on the platform.

The business has seen strong growth since inception and delivered unaudited revenue of £1.4m and a small net loss of £46k for the year ended 31 December 2023. With access to additional funds to grow its range and other expected synergies as a result of becoming part of the Group, the Board believes that Food Circle can be grown significantly. Paul Simpson and James Barthorpe will continue in their current roles and will be supported to grow the business.

Food Circle is complementary to the Group’s Discount Dragon business and is the next step in the Group’s strategy to build a portfolio of e-commerce brands.  Aligned with Discount Dragon, Food Circle reduces food waste and surplus food through the sale of discounted and short-dated stock, as well as being an attractive choice for consumers as they look to spend more cautiously.

Food Circle’s trading to date is underpinned by strong market drivers in health foods, the demand for direct delivery, and a search for value among a broad range of consumers.

Upon completion, additional working capital will be made available to the business allowing it to purchase a broader and deeper range of relevant stock, as well as a deeper range of the faster selling items and increase customer acquisition marketing. It is intended that the fulfilment of the Food Circle’s orders will be transitioned to the Group’s warehouse in Leigh at the appropriate time.

The Food Circle brand will continue to trade from a standalone website, with the clear mission to build a market leading position in the direct-to-consumer online supply of discounted surplus foods for health and specialised diets.

The consideration comprises of an initial payment of £100,000 in cash and £50,000 in shares.  A further £50,000 in shares will be payable on the first anniversary of the Acquisition, subject to any adjustments in the event of any warranty claims against the sellers.  An additional £100,000 in cash will be payable if Food Circle meets certain targets during its first 12 months post-acquisition.

The Company has allotted, conditional to admission to trading on AIM (“Admission”), a total of 2,096,436 new Ordinary Shares1 in the Company at a price of 2.385 pence in satisfaction of the £50,000 initial share consideration (the “New Ordinary Shares”).  Application has been made for the New Ordinary Shares to be admitted to trading on AIM, with Admission expected to take place on or around 16 April 2024.  Upon Admission, the New Ordinary Shares will rank pari passu in all respects with the existing ordinary shares.

Martin Higginson, Chief Executive Officer of Huddled Group PLC said: “We’re delighted to announce this exciting opportunity to further strengthen our position in the online surplus food and drink market, alongside our existing brand, Discount Dragon. Food Circle is positioned at the intersection of a number of market trends; the continued search for value among consumers, the demand for e-commerce and direct delivery services, and the growth in health and nutrition products to support active lifestyles. It has developed important relationships with brands for whom responsible disposal of surplus stocks remains a priority and this will remain a core mission for Food Circle.

Paul and James have done an amazing job growing the business to a turnover of £1.4m with very limited capital and therefore range. We are convinced given access to additional funds the pair will quickly grow this business to new heights.”

Paul Simpson and James Barthorpe, Founders of Food Circle said: “We are delighted that Food Circle is joining the Huddled Group plc family. We have worked hard to build our business from the ground up since our formation in 2018, and feel that now is the ideal time to join a growing group with exciting ambitions for the future.

We believe that Huddled Group plc is the perfect partner to help us unlock the huge potential of Food Circle. The business is positioned in a rapidly growing market, and we are confident that this acquisition will enable us to build on the work we have done so far in helping brands to reduce waste, while maintaining their brand equity, and offering consumers access to high quality products at competitive prices.”

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