Invest – Risk Factors
Stockwood Business Park and Rush Farm are currently operating successfully as a profitable rural venture. However, it is important to recognise that circumstances can change. Whilst Stockwood CBS intends to be cautious and prudent with regard to its liabilities, if investing, you should give careful consideration to all the information provided in this prospectus and the risks attached to their investment, as these risks could result in a fall in the value of your investment or a loss of return. The following are not the only risks; the list is not intended to include everything (and could not do so), and other matters can influence the value of your investment.
The directors consider the following to be the key risks to Stockwood CBS:
- Decrease in demand for the business units due to external factors or changing trends.
- Rise in rent defaults which might result from economic recession impacting on small businesses.
- Decline in the growth of Elysia, which as anchor tenant accounts for a substantial proportion of rental income.
- Rise in interest rates which could affect the costs of capital, particularly any loans provided by a bank.
These business risks could potentially impact on Stockwood CBS’s ability to repay share capital or pay annual interest due to a fall in turnover and profit levels.
The directors will seek to protect against these risks by:
- Ongoing monitoring of local market conditions, wider market trends, changes to economic conditions, government policies and other external factors that might impact on future demand for business units.
- Ongoing marketing of the business park to a diverse range of rural SME’s.
- Maintaining a professional property management service which is proactive in building and maintaining tenant relations, so that potential payment issues can be identified early and appropriate action taken.
- Reducing the level of debt carried by Elysia through restructuring ownership into Stockwood CBS. Reduction in debt levels will put Elysia, which has already been trading profitably for 10 years, in a still stronger position to grow.
- Seeking low margins and fixed interest rates on borrowing where possible.
- Maximising community investment. The more equity raised, the less Stockwood CBS will have to borrow and hence the greater returns and greater business stability.
- Shares in Stockwood CBS cannot be sold or traded and there is no prospect that they will increase in worth beyond their nominal value.
- Shares are withdrawable on 180 days’ notice. Stockwood CBS will not pay you back more than you originally paid for your shares.
- Although shares are withdrawable, you may not be able to withdraw your shares if Stockwood CBS does not have sufficient funds available at the time you wish to withdraw them.
- The value of your shares may fall.
- In some circumstances the directors may need to write down the value of shares. Should you then wish to withdraw your shares, you will receive only the written down value of those shares.
- As a Community Benefit Society, Stockwood CBS does not need to be authorised by the Financial Conduct Authority to take deposits by issuing these withdrawable shares. It is however registered with the FCA, no. 31920 R.
- This investment is not covered by any form of financial compensation scheme and there is no right of complaint to an ombudsman.