High Street Capital in the United Kingdom.

During the uncertain period in South Africa under Jacob Zuma’s leadership, High Street Capital decided to expand its Southern African footprint into the United Kingdom. For personal reasons and to diversify risk away from South Africa, High Street Capital actively sought out opportunities in the UK. The language, culture and heritage are similar and there is a significant pool of ex SA funds that we believe is available to supplement the High Street Capital balance sheet.

Scale of investments and High Street Capital interest.

High Street Capital targeted investments in small companies up to GBP5m. We preferred meaningful, but not necessarily controlling stakes.

STATUS OF THE UK EXPANSION

The three pillars on which past investment success has been achieved would continue to be the main drivers. These are:

·         Above average returns based on readily identifiable growth prospects

·         Capable & like-minded management teams, preferably with a significant stake in the business

·         Sectors in which High Street Management have experience and where that experience can be applied to support local management to achieve its goals

The skill set and experience base of the High Street Team covers a broad range of industries. These range from direct sales and marketing of cosmetics and nutritional products to road surfacing, chemical trading and automotive plastic injection molding.

FIRST INVESTMENT

In June 2017, a consortium of investors led by High Street acquired a 50% stake in a Jersey-based company, Jersey Choice Limited.

Jersey Choice grows and distributes seedlings and other plants directly to UK based consumers. It has a proven trade record since 2004, and the intention is to compliment the traditional direct-market approach with additional routes to market.

Over a 2-year period, the business was modernized with new management and systems systematically introduced. However, due to an unclear statement of working capital requirements and the seller being unable to meet his warranty obligations, a capital raise was required in late 2018.

In mid 2019, the primary debt provider unexpectedly called in their loans at short notice. Since the High Street Capital consortium was unable to follow their rights, we were significantly diluted.

In spite of a resurgence in business in 2020, as a result of the corona virus and as a result of this dilution, Jersey Choice has been High Street Capital’s worst investment to date.