PROJECT PROPOSAL – THE PLOUGH

Presented by The Plough Pub Potten End C.I.C. 8th August 2020

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Disclaimer – Important – Please Read

This is a document for distribution to friends and family of members and directors of The Plough Pub Potten End Community Interest Company (C.I.C.); it is issued to high net worth or sophisticated investors only. It is not for public promotion and is not to be regarded as an FCA approved regulated investment. We, The Plough Pub Potten End C.I.C., maintain a record of anyone who has been invited to read this document as part of our recording system.

This document contains statements concerning the financial condition, operation and business of The Plough public house in Potten End and speaks only as of the date of preparation. Therefore, changes in events, fact patterns, conditions or circumstances related to any such statement may make it inaccurate, incorrect, or materially different. Although The Plough Pub Potten End C.I.C. believes that the expectations reflected in such statements are reasonable, these statements are not guarantees of future performance and are subject to a number of risks and uncertainties and actual results. As such, performance and events could differ materially from those currently being anticipated, expressed or implied in such statements. In particular, nothing in this document should be construed as a profit forecast.

This document does not constitute or form part of any offer or invitation to purchase any securities of any person nor any offer or invitation to sell or issue, nor any solicitation of any offer to purchase or subscribe for, any such securities.

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Executive Summary

We, The Plough Pub Potten End C.I.C., are delighted to bring a new and exciting project to the residents of the with Potten End parish and highlight the opportunity to support The Plough Pub Potten End C.I.C.’s plan to purchase The Plough Pub by making a personal loan towards the project and becoming a member of The Plough Pub Potten End C.I.C.

The total project cost is estimated to be £750,000, which is intended to be used to complete the purchase and refurbishment of The Plough in Potten End. A fixed rate of between 2% ~ 4% per annum will be paid against personal loans.

This project’s primary aim is to save the loss of The Plough as a public house and consequently to avoid its change of use into a residential dwelling. As with all development projects however, it is necessary to have multiple exit strategies in order to mitigate risk and to protect loaned funds.

Business Objectives 1. To offer fixed rates of between 2% and 4% per annum. 2. To re-invent The Plough in Potten End as a venue of choice that benefits as wide a spectrum of the community as possible and creates a genuinely community owned and led asset – a community hub, not just a community pub. 3. To ensure we continue to have the option of The Plough as a public house within our village. 4. To prevent the loss of an amenity that could result in the village becoming a less desirable place to live and potentially see a decrease in local property values as a result. 5. To ensure the project has a minimum of 2 exit strategies to mitigate risk and protect loaned funds. 6. To leverage the best talent and skills to ensure the project is delivered on time and on budget. 7. To create a win-win scenario for all stakeholders involved in the project.

Project Location The Plough in Potten End is situated on the corner of Plough Lane and The Back, opposite the Spencer Holland recreation ground and with residential dwellings to either side and the rear. The building consists of a local public house on the ground floor and living accommodation (including kitchen and bathroom facilities) on the floor above. To the rear of the building, there is a good-sized garden area which is currently accessed both from the rear of the public house and via a side access from the front of the property.

The site is located in the original centre of Potten End and has operated as a public house since the 17th century. There is a mixture of terraced, semi-detached and larger detached dwellings in the vicinity together with the local school and two local public houses (Martins Pond and The Alford Arms) within walking distance. Potten End is served by a bus service which links to other villages close by, as well as to and the market town of , just 2 miles in either direction with their direct train link (approximately 30mins) to London Euston.

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Project Background

The Plough public house was registered as an Asset of Community Value (ACV) on 2nd July 2018. Under the terms of Section 95(2) of the Localism Act 2011, it is necessary for the owner of a property listed as an ACV to give notification of any intention to sell. This is to give the local community a six-month moratorium with the opportunity to purchase and continue operation of the ACV before the property and land can be sold on the open market. On the 13th May 2020, Borough Council (DBC) wrote to the Nettleden with Potten End Parish Council informing it that the owner of The Plough public house in Potten End wished to enter into a ‘relevant disposal of the land’.

The Parish Council then duly informed the local community of Potten End via various channels including social media. Following the notification from the Parish Council, a change of use application (reference no. 20/01195/FUL) was submitted to the planning department of DBC on the 16th May 2020. These events spurred a group within the local community to form The Plough Pub Potten End C.I.C. (Company number 12678625, incorporated on 18th June 2020) in order to request the full moratorium period and to explore the possibility of purchasing The Plough as a community asset.

If The Plough Pub Potten End C.I.C. are unable to secure the purchase of The Plough within the six- month moratorium (which expires on 11th November 2020), the property and land can thereafter be sold on the open market. This could result in the pub being acquired by a developer from outside the village who would probably view the property mainly from a profitability and residential development opportunity perspective. As such, the benefit and amenity of the pub to the local community would be lost.

Further to the situation with The Plough public house, a planning application (reference no. 20/01478/FUL) was submitted to DBC on the 12th June 2020 for the change of use from Class A4 (Drinking Establishment) to Class C3 (Dwelling House), including internal alterations, for Martins Pond public house, being the second of the two public houses located in Potten End.

While this Project Proposal document is focused solely on The Plough public house, the planning application for the change of use of Martins Pond application is significant because of the very real potential of losing both public houses from the village.

Project Proposals Primary Proposal The primary proposal seeks to address the struggling existing use of The Plough as a local public house by undertaking some renovation and restoration of the property, with the ground floor, restored to a high quality standard as a large open plan public house, and the commercial kitchen updated to provide a good quality ‘pub grub’ food offering, using locally sourced foods and ingredients where possible.

As a potential way to reduce the burden on the pub as the sole source of revenue, consideration is being given to whether the first floor could be split into two separate dwellings, with each fully

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refurbished to a good quality standard. These two dwellings could then be made available for rent, with one potentially being offered to a manager of the pub as part of their remuneration package. The first floor is currently configured as a single dwelling and our initial understanding is that the accommodation space is well proportioned and provides a good space for any potential managers. As a result, the possibility of splitting the accommodation into two is only referenced here as a potential option to maximise income for the community. Further consideration and consultation would need to be made before any final decision is taken in this regard.

It is intended that the pub’s garden to the rear would be landscaped to form an attractive outdoor social space for use by patrons of the public house.

It should be noted that normal permitted development rights do not apply, due to The Plough falling within the Conservation Area of Potten End. Therefore, any significant changes to the building would require approval via a planning application.

An architect has yet to be appointed and therefore at the time of writing this Project Proposal document, the finer details of layout and any works schedule are unable to be fully determined. These details will be shared with all members of The Plough Pub Potten End C.I.C. in due course.

Secondary Proposal A secondary proposal needs to be considered in the event that the primary proposal fails to sustain an acceptable level of revenue and The Plough is unable to generate sufficient profits to repay personal loans within the committed timeframes. In such an event The Plough Pub Potten End C.I.C. would consider the public house as unviable and, as one potential option, seek to dispose of the property. Naturally, all options would be considered in consultation with lenders, the wider community, and C.I.C. members.

Project Financials At the time of writing this document, many financial details are still unknown or are very approximate in nature. For example, it is not possible to completely establish the full cost for the building restoration and renovation. The following figures should therefore be viewed as a considered estimate (primarily to be confident that we are not underestimating them), but which in any event are indicative of the overall intention of the C.I.C.

Primary Proposal Purchase price: (£550,000) NB: This is the current asking price. VAT (assuming 20%): (£110,000) This would be reclaimable so would fund some of the contingency and renovation work. Legal and Stamp: (£25,000) Including £22,500 of SDLT and approx. £2,500 for conveyancing. Renovation costs: (£150,000) NB: This is a pure estimate and dependent on scale of renovation required. Contingency: (£30,000) Working Capital: (£50,000) Initial launch and funding of stock, running costs, wages etc.

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Total: (£805,000) Est. Refinance value: £682,000 to £700,000 Est. Refinance cash: £511,500

Refinance Breakdown The estimated refinance value of the primary proposal is based upon The Plough Pub Potten End C.I.C. securing a commercial mortgage on the entire development (i.e. both the commercial unit – the public house and the residential element).

Any mortgage could potentially be supported by tenancy income from the first-floor residential element (estimated to be between £1,200pcm to £1,500pcm).

Regarding the commercial element however, until a professional valuation is carried out it is not possible to determine the true current value or indeed the potential value after refurbishment. It should be noted however, that the annual turnover of The Plough, during the current lease has been reported as follows:

The figures in the table above have been taken from the Sustainability Statement submitted by Tabacon Management Ltd as part of the planning application (planning reference 20/01195/FUL). It is unconfirmed if they are audited or not.

Irrespective of this, it is the intention of The Plough Pub Potten End C.I.C. to increase the annual turnover towards £250,000 by adding food sales to the current wet led offering and seeking to attract more of the community to The Plough by broadening its appeal in terms of The Plough’s offerings.

If we assume the commercial valuation of £250,000, then the total value of the entire development (residential plus commercial) will be between £682,000 to £700,000.

With a mortgage LTV (loan to value) of 75% the lending will be £511,500. Based on an interest only mortgage, at an interest rate of 5%, the monthly mortgage repayments would be £2,131.25pcm.

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Funding Given the financial requirements for the acquisition and renovation of The Plough as a community- based asset, funding of the project is a critical element. While we have had a significant number of positive indicative responses to our initial letter dated 10 July 2020, we fully understand that raising capital, particularly in the current circumstances, will be difficult.

Our vision is to secure as much funding as possible from within the local community, recognising that there may be a shortfall between monies raised and that required.

We are keen to keep things as simple as possible and so the proposal is a relatively straightforward one. In return for a loan of money, The Plough Pub Potten End C.I.C. would offer a rate of return set between 2 and 4 per cent per annum, depending on the length of time for which the loan is committed. We hope to have as many people from the community as possible being involved in the project, to ensure the pub regenerates itself into a true community hub and a place for people of all ages and interests to visit and enjoy. By supporting The Plough with this approach, we believe the sense of ownership would also help increase the use and level of trade at The Plough.

We would also be delighted to receive money in the form of donations and gifts to help support the future of The Plough. If anyone is so minded to support The Plough in this way, please do let us know!

As our letter of the 10th of July states, once we have repaid all outstanding loans, any subsequent profits would be recycled back into the community for projects and improvements that would benefit us all, as residents of Potten End.

The minimum loan amount is proposed to be £1000. We would welcome any further questions that you may have regarding the proposal/opportunity. Alternatively, we welcome your indication of the amount of any proposed loan from you and your preferred duration of that loan.

In terms of timing for any loans, we are looking to a target date of September. This is to allow time to assess overall total amounts and, if necessary, to arrange for a commercial loan for any shortfall. A more detailed timetable of events can be seen at the end of this document.

Project Team There is an African proverb which states: ‘If you want to go fast, go alone. If you want to go far, go together’.

With the understanding that this project would take serious time, effort and dedication and the philosophy that ‘teamwork makes the dream work’, a small but determined group of local residents have come together very quickly to form an effective team with a desire to support the project quickly, effectively and professionally.

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To put it another way, they want to go far...

The Plough Pub Potten End C.I.C. Director – Simon Bane Simon is currently the Deputy Group General Counsel of a leading FTSE 100 international events, intelligence and academic publishing group, based in London. He previously worked in private practice both in London and internationally as an M&A lawyer. Prior to a career in law, Simon ran a number of pubs both as manager and licensee and is keen to utilise this experience in supporting the ongoing success of The Plough and seeing it develop as a valued community asset.

The Plough Pub Potten End C.I.C. Director – Sarah Lowther Sarah is the scourge of inept management as her blue chip guests on Daybreak and Bloomberg Business Breakfast can testify. As a financial broadcaster Sarah has worked for the European Union, 10 Downing Street, Royal Dutch Shell and Radio Dacorum. She is a recent convert to real ale.

The Plough Pub Potten End C.I.C. Director – Andy Price Andy Price is a graphic designer with over 40 years’ experience in publishing and marketing. Beekeeper, beer drinker, and fan of village he passionately believes that with the right management and marketing The Plough could become a real community success. Away from work Andy is a bit of a geek; he is a collector of classic Sci-Fi memorabilia and owner of the Potten End Dalek.

The Plough Pub Potten End C.I.C. Director – Helen Roberts Helen Roberts is a consultant working in Science, Technology, Engineering and Mathematics (STEM) education, specialising in improvement programs in the Further Education and Skills sector. Helen is also involved with various voluntary and community initiatives; she is a Trustee for the Association for Science Education and has lived in the village for nearly three decades.

The Plough Pub Potten End C.I.C. Director – Joseph Roberts Joe Roberts is currently the vicar of Holy Trinity Church, Potten End and Director of Schools’ Ministry for St. Peter’s in Berkhamsted. Before his ordination, Joe was cellar manager of a successful real ale pub in Birmingham and ran his own pub for a short while too. Joe is a former branch chairman of CAMRA (Campaign for Real Ale) who oversaw the fight to save two community pubs, a past organiser of Birmingham Beer Festival and sat on the national membership committee of CAMRA – the most successful voluntary consumer organisation in Europe. He really enjoys the social aspect of public houses and the importance of drawing the whole community together through established and also creative means.

The Plough Pub Potten End C.I.C. Director - Jim Rowland Jim has over 20 years sales, marketing and management experience, including the set-up and management of multi-national company branch offices in Hong Kong, Japan and South Korea. Having worked both in large corporations and start-ups Jim brings with him valuable business experience at both ends of the spectrum. Educated in the U.K., Jim lived in Hong Kong for over 15 years and travelled extensively during his time as the Global Accounts Director for a leading power systems manufacturer and solutions provider. More recently, Jim has been involved in several property development projects throughout the Midlands and the South East, one of which has been the successful re-development of Cedar, Potten End Village Store & Coffee Shop.

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The Plough Pub Potten End C.I.C. Director – Jonathan Swift Educated with a Bachelor of Science degree in Robotic and Electronic Engineering, Jonathan has spent the last 9 years working for a U.K based distributor of medical devices, primarily focused in coronary intervention. The company’s ethos is to bring ground-breaking technologies to the NHS, teach the techniques required for case success and to fully support all staff in its implementation. Jonathan joined the company as an unpaid intern and is now National Sales Manager for two therapy divisions, supporting 11 territory sales managers.

Relatively new to the village (3+ years), Jonathan is a neighbour to the Plough and frequents the establishment at least once a week. With Yorkshire roots, he understands the importance of a public house in any community and could not consider a village to be a village, without one.

The Plough Pub Potten End C.I.C. Director – Duncan Thomson Duncan has spent over 8 years in a variety of FMCG senior management positions covering sales, marketing and finance. For the last 7 years he has established a boutique property development firm, acted as a Non- Exec Director and angel investor focusing on the Tech and FMCG market. Duncan has also performed interim roles as Managing Director, Finance Director and Sales and Marketing Director. Duncan has extensive experience of managing and delivering quantum shift in companies. Most relevant to The Plough, Duncan is currently the Interim MD of Osea Island (Hotel, Events and Leisure company).

Conclusion We hope this document has answered many of your questions and sufficiently whetted your appetite for you to consider supporting The Plough Pub Potten End C.I.C. We hope you will decide to become either a donor or lender, not only contributing to the regeneration of one of the village’s oldest remaining assets but also reaping the benefits and rewards that come with it.

Next Steps

• To understand the interest and pledges from the local community (by 7th September ) • Finalise the business plan, renovation costs and financial model in order to provide detailed proposal ahead of finalising purchase (by end September) • Start negotiation with landlord (15th September) • Finalise legal paperwork and structure • Complete purchase (end of October)

Source List 1. Letter from DBC to Nettleden with Potten End Parish Council dated 13th May 2020: https://lookaside.fbsbx.com/file/CM-200521-20-048.c-The- Plough.pdf?token=AWytLVmcqP8qC_Om4QmUNxYQuqT3NWg3ySP_qzu5whIuff9WLozfH_S mYB13rTMTbRVvOxmJQ_9b65RdSVpdy5qPt7DZwThwVY_uz8qzfD5c_Va7wS4hRU8eG3DKRt

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GFn4WiJd4B3D7y7NUbEOt0FuAt- n_7ZJo8PtsyHiBuocXDxErZoSS7HFI4quUIfXCiNJXFFFgKFSt76m7B4dgd_y8C 2. Planning Application 20/01195/FUL (The Plough): https://planning.dacorum.gov.uk/publicaccess/applicationDetails.do?keyVal=QAEU2AFOIQL 00&activeTab=summary 3. Planning Application 20/01195/FUL (Martins Pond): https://planning.dacorum.gov.uk/publicaccess/applicationDetails.do?activeTab=neighbourC omments&keyVal=QBSU1FFOJ3X00 4. List of Assets of Community Value in Dacorum: https://www.dacorum.gov.uk/docs/default-source/community-living/list-of-assets-of- community-value---amended-22-jun-2020.pdf?sfvrsn=75e50f9e_2 5. The Plough Pub Potten End C.I.C.: https://beta.companieshouse.gov.uk/company/12678625 6. Conservation Area Boundary of Potten End: http://www.dacorum.gov.uk/docs/default-source/strategic-planning/potten-end-(pdf-3-36- mb).pdf?sfvrsn=0

END OF DOCUMENT

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