Transforming travel through on demand electric shared mobility - Community share offer February 2020 - Ethex
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Deadline:
30 April 2020
Target: £600,000
5% annual target
interest rate
Transforming travel
through on demand
electric shared mobility
Community share offer
February 2020
Contents
Welcome letter from Mark Hodgson 3
The opportunity 4
Share offer summary 5
Key offer terms 6
Co Cars at a glance 7
About us 9
Co Cars Board & Senior Management Team 10
Governance 11
Creating space for people 12
Our approach 13
Your opportunity to invest: our Exeter network and beyond 15
Financial and investment summaries 18
Important information 23
Frequently asked questions 25
Risk factors 27
Shareholder application form 31
Nomination form 33
References 34
Notes 35
2
Welcome letter
Dear Investor,
Mobility is one of life’s essentials. We need to travel for our jobs, education and leisure. But for
environmental, social and financial reasons, the days of fossil-fuelled private car ownership are
numbered.
Environmentally, transport is responsible for the largest proportion of greenhouse gas
emissions1 and the associated pollution is an increasing threat to public health that cannot be
ignored2.
Socially, we’re moving into cities. By 2030, 90% of the UK’s people will live in an urban area3.
We must use the space in our cities well, repurposing as much as possible from the third that is
currently devoted to cars.
Financially, transport is many people’s biggest bill, beating housing, fuel and power combined4
and forcing more of us into transport poverty.
The good news is that we are already witnessing explosive growth in ownership of electric cars
and electric bikes. However, if we simply replace every privately-owned fossil fuelled car with an
electric one, we could cripple the National Electricity Grid by 20405.
This is where we step in. We have pioneered sustainable shared mobility since 2005. This
allows everyone to move without anyone having to own a fossil-fuelled or electric car. We help
create healthy, urban environments where people can get the transport they need, exactly when
they need it. And all for an affordable price.
We currently have around 40 cars and almost 100 electric bikes on the road. We’re already
changing the way people travel across Exeter and the South West. We are local, ethical and we
believe profoundly in shared mobility for all.
Right now, the opportunities to expand and develop our electric car and electric bike network
are huge. With your investment, we can go further, faster, in transforming the way we travel.
I would like to invite you to join us on our journey to create a shared,
electric, zero carbon future for everyone.
With thanks,
Mark Hodgson
Founder & Managing Director, Co Cars
3
The opportunity
Co Cars has been in the business of shared
mobility since 2005. In the South West of
England, we have a network of nearly 40 on-
street hybrid and electric cars that stretches
The trouble with
from Salisbury to Falmouth. In Exeter, we also
operate Co Bikes docked, on-street electric
transport
bike hire network. Due to our early entry into Transport is the largest emitting sector of
this market, we have unparalleled experience greenhouse gases in the UK, responsible
and a strong reputation in this fast moving for 27% of emissions in 20171, with air
sector. pollution now causing more deaths than
smoking2.
Our biggest network is centred on Exeter.
Here, we have over 1200 active members It also has a huge economic impact. In
who can book and access on-demand 30 cars 2018, congestion cost the economy
and 95 electric bikes 24/7 via their £7.9bn – a staggering average of £1,317
smartphones. Cars can be booked from as per driver3. And, at £80.80 per week,
little as half an hour and bikes in increments of transport makes up the biggest
20 mins. Together, they have already taken percentage of household expenditure –
150 cars off the road and remove 149 tonnes higher than housing, fuel and power
of CO2 from the atmosphere every year. combined.4 Yet the average private car is
in use for just 3-4% of the time5.
By the end of 2021, we want to have
increased our Exeter car fleet to at least 55 The Government has already passed a
shared cars, of which over half will be fully net zero emissions law which requires
electric, and to expand our electric bike the UK to bring all greenhouse gas
network to a minimum of 150 bikes. emissions to net zero by 20506.
This growth is expected to increase our In the meantime, cities across the UK are
membership to 5,000, taking an additional tackling their transport troubles by
150 private cars off the roads of Exeter and restricting or banning cars in city centres,
removing a further 230 tonnes of CO2 from the providing more cycling and walking
city's atmosphere per annum. It will help infrastructure and investing in public
tackle congestion and pollution in a rapidly transport and shared mobility solutions7.
growing city whilst giving everyone affordable
access to the latest zero carbon transport. Exeter is no exception. It has ambitious
plans to be carbon neutral by 20308. We
Investing in us will accelerate this want to play an integral part in achieving
transformation and create a shared this target.
mobility blueprint which can be used in
other towns and cities. 4
Share offer summary
At a glance... with particular care the sections of this
document headed:
Minimum target to be ‘Important information’ (pages 23-26) and
£100,000
raised ‘Risk factors’ (pages 27-29).
Maximum target to be This invitation to subscribe for community
£600,000
raised shares in Co Cars is not regulated by the
Financial Services and Markets Act 2000 or
Minimum investment £250 subsidiary regulations, to the extent that it is
taking deposits by issuing withdrawable
Maximum investment £100,000 shares. Therefore, the money you pay for your
shares is not safeguarded by any depositor
Target interest rate paid protection scheme or dispute resolution
5.00% scheme.
annually
Our shares are not “controlled investments”
for the purposes of the Financial Services and
Co Cars Ltd Markets Act 2000. You do not therefore have
Co Cars Ltd (“Co Cars” or the “Society”) is a the level of protection that you might
registered society under the Co-operative and otherwise be offered by the Act. In particular,
Community Benefit Societies Act 2014, this document does not need approval (and
registered in England with the registered
number 31432R, and office at 46 Majorfield has not been approved) by an “approved
Road, Topsham, Exeter, Devon, EX3 0ES. person” under the Financial Services and
Markets Act 2000.
Offer for subscription This document is not regulated by the
An offer of up to 600,000 Community Shares Prospectus Rules. Those do not apply
in the Society each with a nominal value of £1. because there is a specific exemption for
Offer period from 13 February to 30 April Community Benefit Societies that conduct
2020. Accrual date is 1 August 2020. There is their business for the benefit of the
a non withdrawal period of 18 months and the community.
share withdrawal notice period is 6 months.
You should buy shares only with money you
can afford to have tied up, without interest,
Documents and without capital appreciation, for several
The Rules of Co Cars Limited, application years or longer and with money that you are
form, latest financial statements and financial prepared to lose.
projections are available on the Co Cars
website (www.co-cars.co.uk/share-issue/).
Applications can be made by going to Should Co Cars get into financial difficulty:
www.ethex.org.uk/CoCars.
• We may have to suspend your rights to
withdraw your shares
Important information • We may have to write down the value of
Co Cars Ltd (“Co Cars” or the “Society”)
accepts responsibility for the information your shares
contained in this document. To the best of the
knowledge of the directors of Co Cars, the • You may lose all the money you pay for
information contained in this document is in your shares
accordance with the facts and contains no Supported by
omission likely to affect its substance.
Prospective investors should read the whole
text of this document and are advised to read
5
Key offer terms
Share offer The offer is open to individuals
approved over the age of 16, trust funds,
by Co Cars 17 January 2020 nominee services and
Ltd Board Share- corporate entities, groups and
on holders associations. You can also buy
and hold shares on behalf of
Offer children
opened 13 February 2020
Co Car’s rules state that all
Offer 30 April 2020 shares are locked in for 18
closes months. After then, the
Withdrawal withdrawal of funds are
Minimum of shares subject to 180 days’ notice.
raise £100,000 The Directors reserve the right
to suspend withdrawals,
should there be insufficient
Target £600,000 funds to make repayments
raise
You should seek advice from a
Investment Community financial adviser or accountant
type (withdrawable) shares on tax matters, as appropriate.
Tax advice Under current legislation
Minimum interest on community shares
investment £250 is paid at a gross rate.
Maximum In the event of the death of a
investment £100,000 shareholder, the repaid value
of the shares will normally be
added to the estate for
Target probate purposes. For
interest 5.00% per annum investments up to £5,000 you
rate Nomination may elect to nominate a
recipient for the value of the
Paid annually within 90 shares and thus (under
Interest days of the end of each current legislation) remove the
payment calendar year, subject to value of the shares (up to
date available funds £5,000) from your estate for
probate (but not tax) purposes
Date
interest First year’s interest will be
accrued on paid pro rata as it accrues
subscribed from 1 August 2020 “Co Cars really benefits our staff by
shares
allowing them to work more flexibly and
travel more sustainably to meetings and
Interest is calculated on a on other essential journeys... helping us
Interest daily basis and payable on to reduce costs, the number of cars on
calculation interest accrued through
the relevant calendar year the road in Exeter and on our
campuses.”
Membership of the Society
is afforded to holders of Joel Smith,
community shares. Co Cars Sustainability Officer,
operates on a one member, University of Exeter
Voting one vote principle
regardless of the size or
value of the member’s
shareholding
6
Co Cars at a glance
Our network
We were the first company in
the UK to run a shared electric
bike hire scheme... Salisbury
Exeter
Cranbrook
96%
customer
Newton Abbot Dorchester
satisfaction
score1
Truro
Plymouth … and we’re the only
one
that runs both shared electric
car and bike schemes.
Falmouth
From only
1200 active
We have over
£3.75/hr members who report...
(+18p/mile)
30% reduction in car usage
15% reduction in travel costs
Join Book Unlock Drive 20% increase in active travel
We are the largest UK
car club west of Bristol.
All our cars are available
24/7 from dedicated
Almost on-street parking bays.
40 cars Inhave
the last 5 years, we
removed 150 Just
private cars from the £1
road2. per 20 mins
Together, our cars and bikes are
Register Rent Ride Return
already removing
Rolling out 95 electric
bikes to 14 locations
149 tonnes of CO2 per annum around Exeter, we
were the first and
by taking cars off the road, modal shift Just under remain the largest
shared docked
and by sharing our low emission fleet.
100 bikes electric bike hire
scheme in the UK.
7
About us
We started in 2005 with a Big Lottery grant
and a single car. Since then, we have grown
to a fleet of around 40 cars and, in Exeter, a "I'm a keen cyclist. Two
network of 95 shared electric bikes. wheels are my way to get
around the city streets and beyond.
Our team is drawn from a diverse range of When I'm not on my bike I walk, and I've
backgrounds including circular economy, never felt the need to own a car.
logistics, public transport, housing and
renewable energy as well as our own "Occasionally though, it is handy to have
members. access to a vehicle so I was delighted to
learn about Exeter Co Cars. The scheme
Our longevity and experience have enabled
offers a fleet of electric, hybrid and petrol
us to build lasting, trusted relationships with
vehicles at handy locations around the
local stakeholders and members. This creates
city. For £25 annual membership and an
a real sense of community ownership of our
cars and bikes. hourly rental fee plus mileage, it's as
easy as putting your key in the ignition to
We are proud to be a not-for-profit, book a car.
cooperative social enterprise. Many of our
stakeholders choose to work with us for this "Payment is simple. You receive a
very reason: we are invested in the purpose, statement via email to let you know when
not the profit. the itemised payment will be deducted
from your bank account. You can also
Together, we have built strong foundations to call the team if ever you need them.
deliver shared mobility across Exeter and
beyond. "I cycle to my preferred car in Pinhoe
and return it to its allocated parking
“I am a raving fan of Co space when I've finished with it. You
Cars having been a user even get a partial refund if you return the
for a number of years. car earlier than planned.
It's a huge pleasure to
get involved in the "With Co Cars I'll never trouble myself
growth of the enterprise, with car ownership. I love the scheme
and seeing the impact it is and hope more people come aboard."
achieving.” Simon Twigg, Co Cars member
Stewart Noakes,
Co Cars member & Board Director
Our mission Our vision We are 8
is to provide low carbon, is to create greener, a social enterprise
on demand, affordable calmer more connected and a
shared mobility for all. places where people
thrive.
“Co Cars has become an
essential tool to help us
run our business as it helps
us become more efficient and is a more
cost-effective way than mileage claims
for colleagues.
“The cars are in easy accessible
locations for our business and we’ve
We work in close partnership with never had issues not being able to use a
stakeholders across the South West that car because, if one is booked close to
include local authorities, housing developers, us, there is always another one available
private businesses and public transport nearby.
operators. “The booking system and smartcards are
easy to use. But if we’ve ever come
The time we spend developing and across a problem, or had a query, the Co
maintaining these relationships, alongside our Cars team are always available to help
unique offer of both shared cars and bikes and they’ve resolved all issues
translates into a robust new business pipeline. straightaway.
This means we are predicting that, by 2024,
we will have over 100 cars and at least 250 We look forward to seeing Co Cars
bikes. We believe there is huge scope for develop further and to see more cars in
additional growth across the South West and around Exeter!”
region and beyond. Tim Wadsworth, Managing Director,
Space
We ensure that every time we add a new car
or bike station to our network, all site-specific
formal leasing agreements are in place. These
include ownership of our charging units,
approvals for dedicated car parking bays and
electric and groundwork approvals for our
electric bike stations.
“It’s been a pleasure partnering with Co Cars on a delivery programme
for their Co Bikes electric bikes at a number of our train stations in
Exeter and East Devon.
“Providing onward travel connections from the train to local employment
sites and other key destinations is an essential part of the total railway product – travel
doesn’t just start and end at the train station.
“Our customers already benefit from being able to access Co Bikes at Exeter St
David’s and Central. Adding Cranbrook and Honiton in 2020 will significantly expand
our offer in East Devon, enabling our customers to access major employers such as
Lidl’s distribution centre and East Devon District Council’s new offices.
“At all stages of this project to date, Co Cars have impressed me with their enthusiasm,
professionalism and knowledge of how shared mobility solutions benefit all transport
partners, businesses and, most importantly, our customers.” 9
Andrew Ardley, Regional Development Manager, South Western Railway
Co Cars Board & Senior Management Team Des Hannon, Director (Chair) Mark Hodgson, Ellen Rodger, works in the financial Managing Director Operations Director technology business and is founded Co Cars 15 years ago. has experience in a range of interested in market disruption, He has extensive experience in sectors including marine, the sharing economy and developing sustainable engineering and renewables. sustainable transport. He was business enterprises, having Her passion is working with fast also a senior elected member worked with multi-nationals and growth companies in nascent of Devon County Council for SMEs across the UK and sectors to help them succeed. 12 years. beyond. Jenny Ryding, Director Sam Peters, Director Justin Butt, Director is an experienced Finance is a senior executive with more is a partner within solicitor Project Manager. Skilled in than 20 years’ experience in Stephen Scown's energy team. analytics, tax policy, the health sector. She has a He provides strategic advice on Government and management, Masters in Business Admin and renewable energy projects she is also the founder of is currently studying altruism at including: solar, wind, battery Co Delivery, Exeter’s electric the University of Bath. storage, electric vehicles, hydro cargo bike delivery company. and heat networks. Stewart Noakes, Director Helen Scholes Stephen Williams is an experienced entrepreneur Marketing Manager Finance Manager who has started, grown and run joined Co Cars from Stephen’s role is ensuring a multiple businesses both in the Stagecoach South West where good service to members and UK and abroad. Adaptable and her role included PR, marketing enabling business growth. He pragmatic, he is most at home and events. She is also on the has an in-depth understanding when working with founders of board of Exeter Chamber of of business from his growing businesses, or Commerce with a remit for background as a solicitor and companies going through a environment and sustainability. in property management. significant transformation. 10
Governance
Overview Directors, working with the Senior
Management Team (SMT) to implement and
deliver on key strategic goals.
Co Cars Limited is a Cooperative registered
as a Community Benefit Society. The surplus SMT members meet with their teams regularly
we generate is re-invested directly into the to ensure that they are aligned and informed.
business, to help transform the communities The majority of our workforce are employed
we operate in and to make our sustainable directly. As an employer we always pay the
development goals a reality. Living Wage.
Co Cars runs a number of services under the Co Cars has, as far as is currently possible,
‘Co’ brand which share management, minimal sub-contracting, leasing or subsidiary
operations and resources. Currently, these are arrangements, except for a few necessary
Co Cars, the on-demand car club; Co Bikes, third-party relationships which we are actively
Exeter’s electric bike hire network and Co looking to bring in-house.
Delivery, electrically assisted cargo bike
deliveries for Exeter businesses.
Our Board of Directors is made up of electric
Board of Directors
car and bike users, and our social and The Board of Directors of Co Cars includes
environmental mission to provide low carbon, Non-Executive Directors who are not involved
on demand, shared mobility for all is defined in the day to day running of the business, and
in our governing documents. We recruit the Executive Directors, who are. This provides a
bulk of our Board from our membership, and good balance, ensuring that decisions taken
everyone is invited to attend and participate in by the Board are realistic and practical, while
our Annual General Meeting (AGM) where all also harnessing the expertise of a diverse
new director appointments must be proposed range of people with very different skillsets
and seconded by existing members. and expertise. It also ensures that the
strategic direction agreed by the Board is fully
We also hold an annual summer event, to understood by those leading the SMT.
which members are invited and can talk to us
in a less formal setting. We hold pop-up
events, regularly send out email newsletters,
conduct an annual survey, and have recruited
a pool of people from our survey participants
that we can use as a focus group for “We’ve worked in partnership with Co
discussing ideas in depth. Cars on a number of projects.
We use social media to keep everyone “We’re very pleased with the innovation
informed and always respond in a timely Co Cars has brought to Exeter with their
fashion to any enquiries we receive. And shared mobility solutions – this aligns
finally, we foster a culture whereby our very well with our emerging Exeter
members are encouraged to get in touch with Transport Strategy and will be key in
us at any time to discuss any thoughts, ideas reducing carbon emissions in the city”
or concerns they may have.
Jamie Hulland,
Transportation, Strategy
Management & Road Safety Manager,
Devon County Council
The Board of Directors meets monthly to
review key risks to the business and make
strategic decisions. The Managing Director is
responsible for the execution of the strategy
for the company as set by the Board of
11Creating space for people
We know we are on track to become the
South West’s leading provider of low cost, “The College has 1000
on-demand, shared mobility for all. But we staff spread across
can get there a lot quicker with your help. 14 sites in Exeter and
Devon, so we are always
We don’t just want to sell a mode of transport. looking for the most sustainable and
We want to create greener, calmer more cost-effective ways for them to travel to
connected spaces where people can live and meet employers, schools and other key
thrive. Our primary focus is to develop an stakeholders.
exemplar city-wide shared mobility network
which includes the following: “By partnering with Co Cars, we can give
our staff access to a dedicated, low
- Electrification - Product innovation emissions car on site whilst removing all
- Mobility hubs - Mobility as a Service of the hassle of fleet management – Co
solutions Cars take care of everything, including
the cleaning!
This successful template can then be rolled
out to other towns and cities. “Feedback from our staff has been
overwhelmingly positive, ranging from
the quality of the car provided to Co
“I teach at Exeter College Cars’ customer service is excellent and
& at St Luke's campus & we look forward to continuing to build on
Co Bikes are the only way our relationship.”
I can get from one to Steve Strang, Head of Estates &
another quickly enough to Information Technology, Exeter
start my class on time.” College
Tim, Co Bikes member
The future For the For the
of travel is: community customer
- Fewer private cars, but - Save money, time & hassle
- Electric better mobility for all
- Shared - Less carbon, cleaner air
- More sustainable travel
options
- Zero carbon - More space for people - Feel happier & healthier 12Our approach
Electrification By investing in on demand electric shared
mobility solutions, we will give people
affordable access to electric cars and bikes,
In the UK, the sale of all petrol and diesel cars support behavioural change and help
will be banned by 2035 at the latest.1 minimise the impact on the National Grid.
Meanwhile, November 2019 saw UK electric
car sales increase by 228.9%2 and projections That is why when buying or leasing new
suggest that, by 2050, 1.5 million electric vehicles, we will always select zero carbon
bikes will be sold per year across 10 of our emissions models over any alternative. Our
major cities3. target is by 2022 all of our fleet will be electric
or hybrid electric and by 2025 it will 100%
But a wholesale switch to electric car electric.
ownership could cripple the National Grid4,
potentially increasing household electricity We will also monitor developments in
demand by up to 80%5 by 2050. transport technology to ensure we adapt as
the market changes.
Furthermore, for many, this technology is
unaffordable which limits their access to
education and employment.
Mobility hubs
Mobility hubs combine multiple modes of
transportation together in one physical
location, often centred around existing public
Innovate UK invests transport infrastructure.
in superfast charging By providing shared, affordable transport
for Exeter options the hubs support first/last mile
connectivity and a ‘car last’ attitude, resulting
In Exeter, we are already shaping our in increased walking, cycling and public
shared, electric future. transport use.
We are a partner in a consortium formed That is why, when working with stakeholders
by Devon County Council and funded by on new locations, we will look at how our offer
Innovate UK. This will see 150 electric supports and enhances existing public
vehicle charge points roll out across the transport infrastructure in order to facilitate the
city over the next two years, increasing shift to sharing.
the existing provision by 400%.
The charge points use a
cutting-edge energy
battery storage system
which will provide on-
street rapid DC charging.
In 20 key locations, charge
points will be clustered
together and will also
feature a Co Car, enabling
access to this
transformative technology
at an affordable price6.
13Product innovation
We work in a dynamic and fast moving sector.
See.Sense AIR
Currently, we are ahead of the game as we
Our partnership with See.Sense
are the only company that offers both shared
launches in Spring 2020 and will be a
cars and bikes. But to stay competitive, we
world first, providing near real-time
must be innovative.
tracking of our Co Bikes using the latest
in IoT technology.
That is why we will allocate 12% of the
investment raised to technology that will
This granular analysis will enable us to
improve our systems and members’ end to
fully understand trip types and journey
end experience.
patterns, helping us plan new stations in
optimal locations1.
For our cars, improvements will include all
bookings via a dedicated app and the creation
of geofenced parking zones, removing the
need for dedicated parking spaces.
For our bikes, per second tracking technology
will allow us to comprehensively analyse how
and where they are used which will help us
plan for and justify new bike station locations.
Behind the scenes, better error reporting,
customer intelligence and on-boarding
procedures will support our growth whilst
minimising running costs.
Mobility as a Service
Mobility as a Service (MaaS) uses digital That is why we are also building relationships
technology to combine different modes of with local bus operators to cross promote our
transport onto a single shared platform This services before moving onto integrated
allows people to choose the package of travel ticketing and apps.
that works best for them so they can make
seamless door-to-door journeys. This will help
increase our utilisation and our revenues.
Due to the complexity of MaaS, it can be led “Overcoming the challenge of first and
by a local authority or other neutral body and last mile connectivity is a priority when it
works best when deployed as a city-wide or comes to improving bus services for our
regional solution. customers.
That is why we are already in discussions with “That’s why I’m really excited about the
Devon County Council who have prioritised partnering with Co Bikes to give
developing an integrated solution as part of customers a sustainable, fun and fast
their draft Exeter Transport Strategy 2020- solution to starting and finishing their bus
20302. journeys.
A stepping-stone towards it is introducing “When it comes to reducing congestion
integrated ticketing across a smaller number and pollution in urban areas, I
of sustainable transport options e.g. bike and believe bus and bike will make
bus. an unbeatable combination!”
Mike Watson, Managing
Director, Stagecoach South
WestYour opportunity to invest:
our Exeter network and beyond
Why Exeter?
Exeter is a vibrant and increasingly successful 50% of people who work in Exeter travel
city, home to world class institutions including in from outside the city. The Exeter
the Met Office and the University of Exeter. Travel to Work area… is second largest
in the country. The result is that
Outward investment means it expects to see commuter traffic is car dominant.
sustained economic growth, particularly in the
tech, environmental and life science sectors. The majority of Exeter residents now do
not drive to work… (but) do however still
For all these reasons, plus the fact that the account for 35% of car-based commute
city’s residents are never far from nature, trips to a destination in the city.
means that it also benefits from a high There is a need to think differently and
awareness of, and engagement with, innovatively about the way people will
environmental issues. access their services in the future. This
could include how people use time spent
However, the city’s growth is far outpacing its on public transport, management of
infrastructure. Over the next 20 years at least transport networks and sharing of travel
50,000 new homes are projected to be built resources, such as car clubs and public
across the Greater Exeter area1, 12,000 of bike hire (shared mobility). 6
which will be in the city itself2.
Devon County Council, Draft Exeter
Exeter also has a travel to work area Transport Strategy
comprising nearly half a million people of
which 35,000 come into the city on a daily
basis3.
The city’s historic road network leaves little
opportunity for radical intervention and Exeter combines the strengths of a
congestion already costs Exeter up to £63m global city with a local perspective... Its
per year4. heritage and environment make it a
liveable and active city.
To put it another way, in 2017 each driver sat
for an average of 24 hours in rush hour As Exeter grows it will be important to
congestion, paying £1,068 for the privilege4. recognise and improve the qualities that
And when they were moving, the average make it liveable. The streets, spaces
rush hour speed was just 4.6mph, the slowest and parks that link neighbourhoods and
in the UK5. the city centre need to be safe and
attractive to use, encouraging people to
Without our intervention, Exeter will simply run be active, healthy and use cars less.7
out of space. Exeter City Council, ‘Liveable Exeter’
15Exeter’s economic growth strategy,
investment in housing, environmental Exeter in numbers
awareness and transport challenges make it
an ideal location to transform travel through
on demand electric shared mobility.
The city’s transport vision is to become
somewhere that ‘shared and active means of
travel are cheaper, quicker and more
convenient than private car ownership.’1
We are already in the city and our shared
mobility solutions will be instrumental in
making that transition.
On average, private cars are used just 3% of
the time and each shared car removes at least
6 private cars from the road2.
Furthermore, studies on shared bike systems
show that each time a network doubles in
size, usage more than triples3.
Everything is in place to make Co Cars a city-
wide success story that supports Exeter City
Council’s commitment to make the city carbon
neutral by 2030.
In the Council’s own words ‘decreasing
carbon-intensive transportation will play an
important role in limiting future emissions’ and
‘will be key to delivering the carbon neutral
target’4.
Exeter is leading
the way in green
motoring
Exeter is the UK’s greenest motoring
hotspot, with the fastest growth in ultra
low-emission vehicle (ULEV) ownership,
new figures have revealed.
Data from the DVLA shows that
ownership of ULEVs in Exeter has
increased by 157% over the last 12
months.
Figures for the third quarter of 2019
show the city has 1,194 ULEVs
registered compared to 464 at the same
period in 20185.
16Your investment will enable us to grow our
Exeter network whilst also improving capacity
Your combined investment of up to within the business to increase our reach
£600k will support local action on the across the South West.
climate crisis by tackling its biggest
contributor: transport. By summer 2021, we will have over 55 cars -
of which at least 25 will be electric - and 150
Your investment will: electric bikes with a projected combined
customer base in excess of 5,000 regular
✔ Contribute to the creation of users.
liveable towns and cities,
improving the local economy, Alongside our ongoing work with housing
transport and infrastructure developers and other organisations, this will
✔ Support a scalable model that will
move us towards our goal of everyone in
Exeter being no more than a 10 minute walk
be replicated across the South
from a Co Car.
West
✔ Help fight climate change, fossil Additionally, it will allow us to invest in
improved booking and app based systems,
fuel depletion, congestion and
pollution onsite infrastructure and staffing to deliver
improved customer experience, wider
Deliverables Min. 25 electric cars operational efficiencies and structured
Min. 50 electric bikes opportunities for growth.
Improved systems,
infrastructure and It will also enable us to unlock our potential as
staffing we move towards our initial 2024 target of
over 100 shared cars and 250 shared bikes.
Outcomes Exeter membership:
+2,000 Co Cars This next phase of growth will mean we can
+3,000 Co Bikes increase the number of cars at our other
Projected 150 cars off the road locations as well as look at introducing our
impacts 230 tonnes CO2 removed bikes and expand into new towns and cities
per annum across the South West.
New impacts Cleaner air We are already speaking to local authorities,
to measure Healthier, more active housing developers and transport operators
people who want to work with an experienced,
More space for people ethical, shared mobility partner to deliver zero
Improved economy emissions mobility across the region. There is
Increased access to huge potential.
mobility
An example is a new homes development
Our impacts are measured by annual with minimal car-parking in the South West
customer surveys and social impact that was approved on the strength of including
reports alongside agreed standard our electric cars and bikes in the planning
methods of data analysis with our application.
partners.
17Finance and
investment summaries
This section sets out Co Car’s historic and projected financial performance as well as the
Society’s investment plans.
Co Cars business model
Co Cars earns the core of its income through fees for membership of the car club and pay as you
go hire of cars and bikes. Information on pricing bands and rates is available on our website. Our
pricing is reviewed on an annual basis to ensure it remains competitive.
Some membership is secured through corporate schemes and corporate car club provision. To
date, this has focused on cars but a corporate offer for usage of our bikes will be rolled out in
2020. Corporate memberships reduce risk around utilisation rates and secure a wider audience
for our services. We are also reviewing scope for sponsorship deals as we expand, particularly
around bikes and cargo bikes, to maximise earning potential for the assets.
Co Cars is generating increasing income from providing authorities, housing developers and
other partners with zero emission shared mobility solutions.
Historic financial performance
The table below shows Co Car’s historic financial performance; for the two financial years
ending (FYE) 31 March 2018 and 2019, and for the current financial year to 31 March 2020.
Co Cars Limited: financial summary (2018-20)
Co Cars, year ending 31 March 2018 A 2019 A 2020 E
Revenue / total income £000 263 274 401
Operating profit (loss) before depreciation,
interest on capital and corporation tax £000 11 (1) 22
(EBITDA)
Net profit (loss) after depreciation, interest
(24) (73) (76)
on capital and tax
Fixed assets 228 471 487
Member share capital 5 5 5
Accumulated reserves (or losses) 198 126 50
Long term liabilities (loans) (13) (31) 0
Net assets £000 230 473 566
Source: unaudited annual accounts to 31 March 2018 & 2019, management accounts to Sept 2019,
financial forecasts.
Key aspects to note from our historic financial performance are:
• A strong revenue growth projected in current year to 31 March 2020, to c. £400k,
representing year on year sales growth of 46%.
• Approximately a break-even position at Operating Profit level (before depreciation, interest
and tax) of £11k in FYE2018 and negative £1k in FYE2019. We anticipate we will generate a
small operating profit of £22k in the current financial year.
• Net losses (after all expenses) due to large depreciation charges against vehicles and other
assets (no cash impact).
• Fixed assets comprise motor vehicles and investments into property, plant and equipment.
• Our limited long-term liabilities of £31k (in FYE2019) are composed of director loans and
finance lease liabilities, expected to be cleared by year end. 18Investment
The table below shows how Co Cars expects to deploy the target share capital raise of
£600,000 in the next financial year (FYE2021).
Co Cars Limited: sources and use of funds
Source of funds £000s Use of funds £000s
50 new bikes & associated charging
hubs 250
Staffing & corporate infrastructure 120
Community shares 600
25 new electric cars (leased) &
associated charge points 180
IT infrastructure 50
Total capital 600 Total 600
The investment we are seeking is focused on:
• Operational efficiencies - improvements to internal infrastructure in the first year in
advance of the expansion of the fleet in the medium term;
• Improve service offer and efficiencies – including software development;
• Increased reach - 50 new e-bikes and associated charging hubs (purchased) into Exeter;
and
• Increased reach - 25 electric cars (leased) and associated charge points, with 20 part
funded from the Innovate UK grant (see p12 for further information).
As at February 2020, we currently have 30 cars and just under 100 bikes in Exeter. We expect
to add more cars and bikes by the end of this financial year (31 March 2020) before expanding
significantly next year so we have more than 55 cars and 150 e-bikes in Exeter. We expect to
double the cars we operate to over 100 by the end of 2024 with, in addition, over 250 e-bikes.
Following the investment and deployment, we will additionally be investing in technology to
enable integration with other transport services (MaaS). This investment will support future
expansion, drive increased revenue and reduce costs through:
• App-based booking systems, single ticketing solutions and fleet management software
which will enable the customer to move seamlessly between different modes of transport;
• These will be smartphone enabled to facilitate improvement and efficiency savings in our
back-office processes (e.g. reducing the time required to support customers, time required
to answer queries, management of maintenance field workforce); and
• Provision of much better back end data on customer transport modes.
The investment will also allow us to significantly expand our marketing campaigns, PR, events,
advertising and member engagement activities to ensure we are promoting our services and
attracting new members across the whole of our network.
Our minimum capital raise is for £100k. This will still allow us to significantly grow and scale the
Co Cars business. In this scenario, we would prioritise adding new electric cars to our fleet and
improve our IT infrastructure and staffing.
19Forecast financial performance
The table below shows the historic and forecast Profit and Loss account for Co Cars.
Co Cars Ltd: Profit and Loss summary (2018-24)
Co Cars,
year ending 2018 A 2019 A 2020 E 2021 F 2022 F 2023 F 2024 F
31 March
Revenue
£000 263 274 401 861 1,138 1,401 1,610
Revenue
4.3% 46.2% 114.8% 32.2% 23.1% 14.9%
growth
EBITDA
11 (1) 22 171 197 261 202
EBITDA £000
4% (0%) 5% 20% 17% 19% 13%
margin
Financial (1) 1 (1) (57) (30) (29) (28)
expenses
£000
Depreciation (34) (73) (97) (86) (183) (148) (128)
Taxation 0 0 0 0 0 0 0
Net surplus
£000 (24) (73) (76) 28 (16) 84 47
/deficit
Net margin % nm nm nm 3% nm 6% 3%
Source: unaudited annual accounts to 31 March 18 & 19, management accounts to Sept 19, financial forecasts.
Commentary
Below is the commentary on our revenues and costs affecting Co Cars until 2024.
Revenues
• Our revenues are forecast to increase by more than four times over the period from c. £400k
(FYE2020) to c. £1.6m in the financial year ending March 2024. This is largely driven by
increases in the size of the car and bike network that Co Cars offers and income from new
members. The number of cars we operate in Exeter will more than treble, as will the number
of bikes.
• We expect to receive substantial revenue grants over the forecast period; from c. £320k in
the next financial year (FYE2021) falling to c. £100k in FYE2024.
• Our revenue is expected to grow significantly in the next financial year (to c.£860k) based
on investment already made into the car and bike fleet and through deployment of
community share capital raised.
• This doubling in revenue will be generated from: a projected 90% increase in income from
cars, and a very large projected increase in income from bikes (over 500%) based on bikes
already ordered and ready to be deployed, as well as £320k of agreed revenue grants.
• Our provision of larger numbers of cars and bikes will increase their convenience (improving
the likelihood of one being available when needed) aligned with increases in the provision of
docks or drop off points close to the journey start and destination; increasing usage by those
who are already members or users.
• Our prudent projections for bike utilisation are forecast to increase from a baseline of 3.5%
at the beginning of year one, reaching an average of 10% in year five. We have monitored
seasonal patterns in bike usage during the pilot phase of the bike scheme and have built in
expected fluctuations in usage across the year. As bikes will be increasing from 95 to over
250, and bike hubs (pick up and drop off points) from 10 to 25 over the same period, with
most of this expansion happening in the first two years, we believe this to a reasonable time
frame for reaching maturity in network utilisation. 20• We know that each additional car, bike and docking station also acts as a “sandwich board”
for our offer, increasing membership through visibility to those travelling past, without
additional marketing costs.
• This combined expansion and refinement of our offer will have a "network effect", where
usage and revenues increase at a faster rate than numbers of cars and bikes themselves.
• The earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) increases to
c.£260k in FYE 2023 before falling to c.£200k in FYE 2024 when we expect to make
another substantial investment to renew the car and bike fleet.
• The underlying profitability of the business (i.e. without revenue grants) is also projected to
increase with the EBITDA margin, excluding revenue grants, rising to c.10% in FYE 2023.
This means the business will be grown sustainably and demonstrates there will not be a
reliance on revenue grants in the long term.
• Finally, there is no taxation over the forecast period; tax not payable until EBIT (Earnings
Before Interest & Taxation) exceeds receipts of capital and revenue grants in financial year.
Costs
Our corporate costs will not grow at the same rate as our network because of the following:
• The investment in our core team, in the first year of the forecast period, will establish a team
and infrastructure that can be grown flexibly and effectively.
• The investment in our software and supporting processes will ensure that our processes are
efficient, our customer services are effective and that we are able to leverage technology to
ensure that our services are easy to navigate for new members and users.
• Together, these improvements will ensure that our core costs are contained as we grow,
supporting the ambitious network and revenue growth that we project.
The table below shows the historic and forecast Profit and Loss account for Co Cars.
Co Cars Ltd: Cash flow summary (2019-24)
Co Cars,
year ending 2019 A 2020 E 2021 F 2022 F 2023 F 2024 F
31 March
Operations
£000 59 5 141 186 252 199
Operational cash flows
Investments
Capital grants £000 316 169 208 85 27 10
Investment £000 (316) (113) (822) (178) (164) (132)
Loans / leases raised £000 20 0 0 0 0 0
Loans / leases repaid £000 (2) (31) 0 0 0 0
Interest paid / received £000 1 (1)
Share capital
Share capital raised 0 0 600 0 0 0
Share capital repaid £000 0 0 0 (15) (29) (28)
Return to shareholders (31) (30) (29) (28)
Costs for share offer 0 0 (27) 0 0 0
Net cash flow £000 77 29 70 49 58 22
Cash at end of year £000 107 136 206 255 312 334
Source: unaudited annual accounts to 31 March 18 & 19, management accounts to Sept 19, financial forecasts.
21Commentary
• There are strong operational cash flows from FYE2021, based on revenue growth outlined
above and in context of declining revenue and capital grants over the forecast period.
• The large investment of c.£820k in FYE2021 is using share capital proceeds (target of
£600k) and (agreed) capital grant funding of c. £210k.
• The capital grants fall over forecast period from c. £210k in FYE2021 to just £10k in
FYE2024.
• The share capital withdrawals (allowed after 18 months) are expected to be £15k in
FYE2022, and approximately £30k p.a. thereafter.
• The forecast return to shareholders is based on the target 5% interest payment at end of
first year of investment (31 March 2021).
• As the business grows and succeeds, we may carry out a further investment raise but this is
not included in this financial model.
The table below shows the historic and forecast Balance Sheet for Co Cars.
Co Cars Ltd: Balance Sheet summary (2018-24)
Co Cars,
year ending 2018 A 2019 A 2020 E 2021 F 2022 F 2023 F 2024 F
31 March
Fixed assets £000 228 471 487 1,223 1,217 1,233 1,237
Cash £000 30 107 136 206 255 312 334
Other current £000 39 40 53 103 134 163 186
assets
Liabilities £000 (67) (145) (110) (130) (150) (170) (190)
Net assets £000 230 473 566 1,402 1,456 1,538 1,567
Members’ £000 5 5 5 605 590 561 533
capital
P&L account £000 198 126 50 78 62 146 193
Capital grants £000 27 342 511 719 804 832 842
Shareholder
£000 230 473 566 1,402 1,456 1,538 1,567
funds
Difference 0 0 0 0 0 0 0
Source: unaudited annual accounts to 31 March 18 & 19, management accounts to Sept 19, financial forecasts.
Commentary
• Our fixed assets (largely cars and bikes) will grow over the forecast period with some
substantial additions to the fleet.
• Through proactive working capital management, we will ensure Current Assets (debtors
etc.) are balanced with liabilities (trade and other creditors) over forecast period.
• There is a strong balance sheet with investment (£600k project community share raise) and
receipt of capital grants (approximately £500k already received to date, and expected to
raise to c.£840k over the forecast period).
22Important information
Share type • Fewer cars
These are ‘withdrawable’ shares that cannot be • Cleaner air
sold, traded or transferred between Members, • Healthier, more active people
unlike the ‘transferable’ shares typical of a limited • More space for people
company, and only Co Cars Limited can buy them • Reduced carbon
back. • Improved economy
• Increased access to mobility
Who can invest?
Democratic voting rights, with one member, one
Individuals over the age of 16, charities and other vote, at our AGM
organisations may invest in this offer. You can also
buy and hold shares on behalf of children. The opportunity to elect the Board who govern
Co Cars Limited.
How much can I invest?
Interest accrued from 1 August 2020.
We are offering £1 shares with a minimum
investment of £250 and maximum investment of The right to apply to withdraw your capital after 18
£100,000. The maximum £100,000 includes any months of investment.
existing investment you may hold in Co Cars Is my investment safe?
Limited, including any held on behalf of children.
You can be sure that your funds will make a
How do I invest? positive difference to local initiatives providing low
Ethex is managing the share administration of this carbon, on demand, shared mobility for all but
share offer. It is a not-for-profit investment platform, there is no guarantee of receiving a financial return
based in Oxford, which makes positive investing on your investment. Investors may receive back
easy to understand and easy to do. less than their original investment and may not get
it back at all. Please do not invest funds that you
You can either: cannot afford to lose. You can read more about the
Invest online at www.ethex.org.uk/CoCars. This will risks of investing in the Risks Factors section (p.
take you through to the Ethex website where our 27-30).
share offer is listed. This paperless process is our Will the value of my shares ever increase?
preferred mechanism and is the most efficient
method for investing. If you have any problems, or No, unlike company shares co-operative and
need help, then please call 01865 403304. community benefit society shares cannot go up in
value, but they can go down meaning that you
Or, if you would prefer, you can send a cheque could lose some or all of the money you invest.
with a paper application to Ethex and they will
process your investment. (See application form at Why do I get an interest payment, not a
the end of this document for more details.) dividend?
If you would like to apply for and hold shares on Due to our structure as a Registered Society our
behalf of children, you will need to submit a paper shareholders can receive interest payments on
application accompanied by the additional Holding their investment (rather than dividends) and these
shares on behalf of children form at the end of this are limited under legislation to what is necessary to
document. Unfortunately, we do not have the attract and retain the investment.
facilities to accept this form online. This must be What is a ‘target’ interest rate?
done at the time of application and cannot be done
retrospectively. We set a target interest rate for investment held in
the Society; this is the rate we will strive to deliver,
What are the benefits? based on the anticipated performance of our
The biggest benefit you receive as an Investor business. The Society has a target interest rate of
Member is the knowledge that your funds are 5% per annum.
being used to support local action to provide low The interest rate is paid yearly at the discretion of
carbon, on demand, shared mobility for all and, the Board dependent on the financial performance
through that, you are making a tangible difference of the business.
to the future of your community. In addition, we
offer: Share withdrawals
A stake in a successful shared mobility social Shares are withdrawable up to a maximum of 5%
enterprise with a proven track record per annum of share capital in issue at the end of
the financial year. Within this ceiling, individual
Delivery of community transport projects resulting requests to withdraw will be at the discretion of the
in: Board. The scope for being able to withdraw
23shares in the future will be dependent upon the Can we hold shares in joint names?
Society developing a successful business and We have historically had very few people applying
hence cash flows to pay out share withdrawals, or to hold shares in joint names, so we have decided
contingent on the Society raising additional capital to not offer this option at this stage.
for the purpose of paying out share withdrawals.
What happens to my shares if I die?
In the case of joint investments, all investors
concerned must agree to a withdrawal. Shares will If a Member dies, the repaid value of the shares
be repaid at the original price (subject to will normally be added to the estate for probate
comments hereafter). The Directors of the Society purposes. The simplest way to ensure your shares
have the right to change the withdrawal facility, or will be transferred in line with your wishes is to
to suspend withdrawals. Similarly the Directors complete and return a Nomination of shares on
have the right to write down the value of shares, if death form to Co Cars Ltd. This will be sent out
the liabilities of the Society (and its share capital) with share certificates and can also be downloaded
should exceed the value of its assets. Members from Co Cars’ website ‘Invest’ page.
who then withdraw their shares will only receive If a Member dies more than two years after
the written down value of their shares. investing, the shares can qualify for 100% relief
under Business Relief for Inheritance Tax because
The value of your shares may fall and their value the shares are unlisted.
will not exceed the original value of £1.00 per
share. Although shares are withdrawable, you may Voting
not be able to withdraw the full price you pay for Each member has one vote regardless of the size
them if Co Cars does not have funds available at and value of their shareholding. Members will be
the time you want to withdraw your shares. kept informed of developments through the Co
Cars website, by e-mails where the member so
How do I apply to withdraw capital? wishes, newsletters, surveys, annual reports and
Co Car’s rules state that all shares are locked in Annual General Meetings.
for 18 months. There will be an annual process by
which investors can apply to withdraw some or all What happens if the share offer is
of their equity in any one year. We will confirm if undersubscribed?
your application has been successful, with
applicants having their capital returned within 180 If we fail to meet our minimum target, we will not
days of notification of their success. To cover process applications and any monies received will
administration costs, successful applicants will be returned.
forfeit 90 days of interest.
What happens if the share offer is
Because Co Cars Ltd does not hold large cash oversubscribed?
reserves, requests to withdraw capital will be met Should the offer be oversubscribed, we will accept
out of our ongoing income. Ultimately equity additional investment so long as we have sufficient
withdrawal remains at the discretion of the confirmed shared mobility projects in the pipeline
Directors who have an obligation to put the overall to quickly make use of the additional capital.
financial wellbeing of Co Cars Limited first. Should this not be the case, we will not exceed the
Can I hold shares on behalf of children? target in order to avoid overcapitalisation. In which
case, we will prioritise investment in order of
Members must be at least 16 years of age. You receipt of application.
have the option of holding shares on behalf of
someone who is under 16. Following that person’s Dissolution
16th birthday they may become a Member of the In the event of the society being dissolved, after
Society and those shares can be passed on to paying creditors any remaining surplus would then
them. If you would like to hold shares on behalf of go to paying back initial investments on a pro rata
children, complete the Holding shares on behalf of basis, plus any interest due. Should there be any
children form at the end of this document. surplus after this point, it will be distributed to other
Unfortunately, we do not have the facilities to organisations in the Exeter area with similar
accept this form online. Please complete a paper objectives, as chosen by the members.
application and return it to Ethex.
24Frequently asked questions
What are community shares? cannot apply to the Financial Services
Compensation Scheme.
There is no legal definition of community shares.
The term is used to refer to a unique form of share Community shares are much riskier than keeping
capital called ‘withdrawable shares’ which can only your money in a savings account with a bank or
be issued by co-operatives or community benefit building society, where currently the first £75,000 is
societies registered with the Financial usually fully protected. You can lose everything
Conduct Authority (FCA). Co-operative societies you invest in a community shares offer. This is why
are for the mutual benefit of their members, it is important to look carefully at a community share
whereas community benefit societies are for the offer before deciding to invest.
broader benefit of the whole community. A
withdrawable share can be withdrawn from What return can I expect from my community
investment, subject to the terms and conditions of shares?
the society. This provides a straightforward way of
getting your money back when you want to cash-in Co Cars offers a financial return (a target
your shares. Withdrawable shares are very different investment rate of 5% per annum) on your
from ‘transferable shares’, which are the type of investment (this is a target return per year listed as
shares normally issued by companies. To cash-in a percentage of your share capital), together with
transferable shares you must first find a buyer to the scope to cash-in (withdraw) your shares. The
whom you can ‘transfer’ (i.e. sell) your shares, at an interest rate is paid yearly at the discretion of the
agreed price. Shares in larger companies are Board dependent on the financial performance of
bought and sold through stock markets, but these the business.
markets do not cater for smaller companies where
there are very few buyers or sellers. Finding However, you should be aware that, unlike
someone willing to buy shares in a small venture companies, there are legal limits to financial returns
can be very difficult. / interest payments on shares in co-operative and
community benefit societies, based on the principle
What are the benefits of community shares for that interest should be no more than is sufficient to
enterprises? attract and retain the investment. Also, unlike
company shares, community shares cannot go up
Community shares can potentially offer a number of in value but they can go down, meaning that you
benefits to community enterprises seeking to raise could lose some or all of the money you invest.
finance.
What’s the difference between a co-operative
• Capital: Community shares can provide long- and a community benefit society?
term risk capital linked to the performance of
the society A co-operative society is run for the mutual benefit
• Leverage: Community shares can help secure of members who use its services. This is based
further funding based on the ‘first move’ of the upon the common economic, social and cultural
community needs or interests of the members. Typically, the
• Governance: Community shares can give common need or interest will define their
members meaningful involvement in the relationship with the co-operative as a service user,
running of the society customer, employee or supplier. A co-operative
• Operation: Community shares can promote society has open membership; there should be no
member involvement in the operation of the artificial restrictions on membership, and
enterprise membership should be open to anyone who meets
the criteria. Recent guidance from the FCA says
What are the risks of community shares? that a co-operative society can have investor-
members who are not otherwise users of the
The sale of community shares is not regulated by society’s services. A co-operative society can pay
the Financial Conduct Authority, because investors interest on member share capital and a share of the
are deemed to be investing for social returns, surplus, or dividend, based on the level of
not financial gain. This is good news for community transactions (customer-purchases, supplier-sales
ventures, which would otherwise face prohibitively or employee-wages) with the society.
expensive regulations when marketing
community shares. But it comes at a cost A community benefit society is run primarily for
to community investors, who have no right of the benefit of the community at large, rather than
complaint to the Financial Ombudsman Service and just for members of the society. This means that it
must have an overarching community purpose that
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