Biography > Other Organisations
I got a phone call from Barclays Bank manager suggesting that he had heard of a guy, who I’ll call Brian, who wanted to do a deal. So I picked up the phone and had a chat. We agreed to meet on Friday May 23 2008. It was to be at a rather nice hotel – The George In Stamford. It is a long drive but it gave me the chance to try out my brand new Jaguar XKR I arrived at lunch time and we had a chat before we drove out to look at some rocks.
We then went to Creeton Quarry aggregates who were meant to be expecting us but weren’t. We had a weird conversation which established little. So I drove all the way back home and thought about the proposition. I wrote it out – so that I would understand it better. It is below.
You have a background in quarrying which allowed you to see an opportunity in providing pitching stone. You formed a company called Rock Technology to exploit this opportunity. The first customer you have identified is the Environment Agency and your company has pre-qualified for the supply of this stone in East Anglia. You now have the tender documents to allow the supply of the stone. You have agreed with Creeton Quarry that you will be their exclusive distributor of pitching stone.
You anticipate that this order will be for 4,000 tonne of standard pitching stone per month (selling at £78,000 per month delivered) and 1,000 tons of premium pitching stone per month.(selling at £24,500 per month delivered You also anticipate orders of 1,000 tonnes pre month of sea defence armour stone per month.( which will sell at 36,000 per month delivered) ( I am not clear if this is for the environment agency or by separate contract, perhaps you can clarify). This will all be supplied by Creeton. This will amount to sales of £138,500 per month once the volumes have ramped up over the first 6 months. The gross margin on these sales (including delivery costs) you anticipate to be around £55,000 (assuming that you subcontract the haulage, the margin is higher if you use own transport). So the margin is 39%.
You anticipate that you will need a small office set up to cope with administration which initially you envisage will just be an administrator. You will need a vehicle to transport samples. So you anticipate including your salary but excluding finance costs the overhead will be around £12,000 per month.
You anticipate that Creeton quarry will be able to fulfil all of the orders for the foreseeable future without problems.
Thanks But No Thanks
I decided that I didn’t know enough about the proposition and I wasn’t at all sure about Brian. I phoned him and told him this. He started to tell me the sad story about he had been working on this deal for ages and didn’t have any money. It was a brilliant deal and if I could just advance some money he’d be able to pursue it. I tried to say no.
The phone calls kept coming with ever more urgency. He was living with his mother and they were starving and I must help.
Eventually, I really did feel sorry for Brian, no one would stoop so low in begging without a good reason. So I sent him a cheque for £2,000 which he banked on the 3rd of June 2008. At which point he went away. Phew!