the times | Monday May 2 2022 39
Business
Sales at Chilly’s have fallen by more
than a fifth to £34.5 million amid “chal-
lenging” retailing conditions.
The London-based company, pro-
ducer of a reusable water bottle brand
that was once a commuting essential,
had been flying before the pandemic.
Sales of its stainless steel bottles and
food containers in the year to July 2019
rose by 162 per cent to £31.2 million and
it was recognised by The Sunday Times
Fast Track 100 as the country’s fastest-
growing private company. The follow-
ing year sales increased further to
£44.2 million, helping it to make oper-
ating profits of £9.9 million.
Accounts filed last week showed that
while trading during the pandemic had
been more difficult, it remained highly
profitable. Operating profits were
£5.9 million in 2021.
Chilly’s was set up by James Butter-
Richard Tyler
Bottle maker feels chill as
tough conditions hit sales
field, 33, and Tim Bouscarle, 34, two
former digital marketing specialists, in- The company, which employs 37
people, paid Butterfield and Bouscarle
dividends of £4.4 million in 2021 and
£3.4 million in 2020. Butterfield is the
majority shareholder.
Butterfield came up with the idea for
the bottles at the final year of university,
using a double-walled vacuum cham-
ber for thermal insulation. Initially
selling them at Camden Market in
north London in his spare time, he
teamed up with Bouscarle when the
potential for the bottles became clear. A
£9,000 crowdfunding on the Indiegogo
platform helped them to get going.
Chilly’s has since collaborated with
numerous designers. An Emma
Bridgewater-designed 750ml bottle
retails at £31. In June 2020, with the
pandemic raging, the company donat-
ed bottles worth £250,000 to NHS
frontline workers.
and lifestyle brand ten years ago and bought out their shareholders in September. They expect £20 million in sales this year
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Business
Twitter is a big bet,
but Musk has real
ace up his sleeve
strengthening authentication, all of
which sound like smart moves. If he’s
to be believed, then anyone should
be able to say anything they want.
So what’s clear is that this isn’t
about money. Musk is now the most
famous businessman on the planet,
he’s a superstar. In the same week he
announced the bid for Twitter, he
was also launching the new Tesla
truck and one of his SpaceX rockets.
His time management seems
awesome. For him, Twitter is a
platform to promote his agenda and
his values — it’s a lot more useful
than a mega-yacht and shows that
owning your own social media
platform could become the next
thing for the world’s super-rich
entrepreneurs, just like analogue
media assets used to be.
Of course, there’s a question
whether someone with all these
interests should be in control of such
a powerful discussion forum as
Twitter and many will be against it,
as we’re starting to see.
However, Twitter offers enormous
reach to Tesla, which sold just under
400,000 cars in the first half of 2021
in spite of supposedly spending
almost nothing on advertising. So
you have to look at it on a broader
scale. Tesla was worth $1 trillion
before its shares fell 12 per cent on
the news of the Twitter deal, and
SpaceX another $100 billion or more.
And then Starlink —
what’s that worth? If you
viewed Twitter as a
marketing cost, which
would be the wrong way
to look at it, paying
$44 billion doesn’t seem
so outlandish,
particularly if he can find
other equity investors to
share the risks, as we’ve
seen with the consortium
bids for Chelsea.
Let’s go back to my
starting point: that the
war in Ukraine is making
technology companies
more valuable. From that
perspective (as someone
from a leading blockchain company
recently pointed out to me) the real
jewel in Musk’s crown is Starlink, the
satellite internet service operated by
SpaceX. Starlink takes data directly
from Tesla’s cars, which in reality are
chips on wheels, so enables Tesla to
constantly refine its vehicles in a way
that traditional carmakers simply
can’t. That’s the reason all the other
auto companies fear Tesla.
It also enables Musk to
disintermediate all the telecoms
companies, because Starlink builds
its own satellite-based infrastructure,
which is exactly what it’s doing in
Ukraine at the moment, helping the
Ukrainian military to have a
communications network the
Russians can’t knock out.
More than 25 years after Bill Gates
said that “content is king”, perhaps
that’s no longer the case and secure
data would be more appropriate.
Twitter might be taking the
headlines, but Starlink is the real ace
up Musk’s sleeve.Sir Martin Sorrell is founder and
executive chairman of S4 Capital, the
digital advertising and marketing
services business.E
lon Musk’s acquisition of
Twitter brings to mind
Franklin D Roosevelt’s
“fireside chats” back in the
1930s, when FDR used to
talk directly to the American people,
boosting his reputation throughout
his presidency.
Just as the war in Ukraine is
making technology companies more
important — because nowadays
offensive and defensive warfare
means software and cyber capability,
as well as hardware and military
personnel — Musk has turned his
attention to securing a trophy media
asset. Owning Twitter gives Musk
control of a platform where at
present he can talk to 206 million
active users around the world every
day. But the $54.20 per share he’s
paying — with the help of Morgan
Stanley — doesn’t seem justified by
the numbers.
That price values Twitter at
$44 billion, but with revenues of
$5 billion to $6 billion this year and
$1.5 billion of earnings before
interest, taxes,
depreciation and
amortisation on an
adjusted basis, that’s
seven to nine times
revenues and 30 times
ebitda and makes little
obvious commercial
sense. It’s hardly
surprising that the
Twitter board bit his
hand off.
You may well ask
what’s the difference
between Musk bidding
$44 billion for Twitter
and Stephen Pagliuca
bidding $3 billion-plus
for Chelsea FC?
Although that’s about 12 Chelseas,
they are still both lossmaking trophy
assets. You certainly could see Musk
as a modern Randolph Hearst or the
next Rupert Murdoch. Or like Jeff
Bezos buying The Washington Post
or Marc Benioff acquiring Time
magazine. Over the past couple of
hundred years there are endless
examples of media outlets being
acquired for reasons that had as
much to do with trophy assets as
profit.
Twitter’s advertising revenue is
about $4.5 billion, pretty tiny
compared with what other
companies are likely to do in 2022:
$5 billion at Snap, $40 billion at
Amazon, $135 billion at Meta and
approaching $300 billion at Google.
From an advertising perspective,
Twitter’s share is chicken feed.
Musk says he doesn’t want to
expand the advertiser base (a point
I’m uncomfortable with) because
having advertisers influences
editorial content. He has made it
abundantly clear that he believes
strongly in free speech and that he
wants to take off the controls on
Twitter, open-sourcing the
algorithm, eliminating the bots andSir Martin
Sorrell“
You could see
Musk as a
modern
Randolph
Hearst or the
next Rupert
Murdoch