Dragons’ Den star’s bakery in talks on €6m debt with banks
East Coast Bakehouse, the high-profile Co Louth biscuit maker founded by former Jacob Fruitfield boss Michael Carey and Dragons’ Den star Alison Cowzer, is in negotiations to restructure almost €6m of bank debt. Talks come after a €3.6m loss in its 2021 financial year brought accumulated losses to almost €21m. It followed a €4.9m loss the business recorded in the previous financial year.
Speaking to the Irish Independent, Mr Carey said he’s confident a deal can be struck with the lender. East Coast’s banker is Ulster Bank.
“Discussions around that restructuring are continuing, but it looks pretty healthy at the moment,” he said. “We’ll get a satisfactory solution on that.”
Newly-filed accounts for the biscuit maker show that the loss made in the 12 months to the end of February last year brought its accumulated losses to €20.7m.
Mr Carey – a former chairman of Bord Bia who established East Coast Bakehouse in 2015 – declined to say if the company had also generated a loss in the 12 months to February this year.
The firm raised millions of euro from backers include Donard Gaynor, the current chairman of Glanbia and a former executive with US drinks firm Beam. Stephen Twaddle, a former president of Kellogg Europe is also an investor. A company owned by Lily O’Brien’s founder Mary Anne O’Brien was also an early backer. Enterprise Ireland has invested about €2m in the firm and injected an additional €190,000 in January 2021.
Mr Carey said East Coast’s ingredient costs are up about 15pc year-on-year as a result of the war in Ukraine and higher inflation, while energy costs have risen.
But he said monthly turnover is now running at twice the rate it was a year ago and that annualised turnover is now at €8m.
“The business has continued on its track… and moving on a path towards being a profitable, sustainable business,” he said. “During the past year, we have invested a further €1.5m in the business, which is mainly funding growth – it’s working capital.”
He said existing investors provided the bulk of that money. While Mr Carey previously predicted the company would be profitable by now, he said that won’t now happen for another couple of years.
Filings for a company behind East Coast Bakehouse show that in December 2020, almost €9.4m in loan notes – the bulk provided by Mr Carey and Ms Cowzer – were converted into shares in the business.
Most of East Coast’s revenue is generated from the production of biscuits for third parties, including UK grocery multiples. Turnover is equally split between Ireland and abroad.