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A €23m debt write-off helped private equity-controlled Promise Gluten Free, a food business based in Co Donegal, post a profit in its last financial year. Without it, it would have recorded a €4.7m loss.
It also continues to shoulder more than €48m in accumulated losses, newly filed accounts confirm. The business is controlled by London-based private equity group Mayfair Equity Partners, which took a 60pc stake in the Irish company in 2017. The sellers, including co-founder Declan Gallagher, retained a combined 40pc stake in the business.
The transaction valued the food group at about €45m. The company behind the food business, Ceres Bidco, posted revenue of €68.1m in the 18 months to the end of last December, the new accounts signed off last week show.
But excluding debt forgiveness, the company continues to be significantly loss-making. While it posted an €18.2m profit for the last financial period, it was only achieved after an inter-company loan and interest totalling €23m was forgiven.
Ceres Bidco had accumulated losses of almost €48.5m at the end of last year. Without the debt forgiveness, the group would have recorded an operating loss of €4.
7m in the last financial period. It made a €4.2m loss in the previous 12-month period.
The firm still had €28.8m of debt outstanding at the end of last year and due after more than one year, even after the write-off. That debt is repayable at the end of January 2027 and carries a 6pc interest rate.
The directors have insisted in the accounts that the business, which employs more than 240 people, is poised to achieve profitability. Earlier this year, it was reported that Mayfair was mulling an exit from the food venture. It had hired investment bank Lincoln International to handle a potential auction.
However, Mayfair remains the majority shareholder. The group’s brands also include Gallaghers Bakehouse, and its primary markets include Ireland, the UK, the United States and Canada. Its products are sold by retailers including Tesco, Sainsbury’s and Morrisons.
“In the Republic of Ireland, Promise is the number one gluten-free brand and has been responsible for significant category growth by attracting new households and increasing frequency of purchase,” the accounts note. It added that in the 18-month financial period, it continued its multi-year investment programme, “targeting key bakery automation and improvement initiatives, and investing in the growth of both brands both domestically and across key export markets”. The chief executive of the bakery business is Patrick O’Sullivan, who took on the role in 2018.
He’s a former senior executive at Glanbia Performance Nutrition. The directors’ report for Ceres Bidco notes that they are confident of achieving profits. “Management have prepared detailed projections for its operating subsidiaries.
.. which show these entities return to profitability,” according to the accounts.
They add that Mayfair will continue to financially support the business. “Mayfair remains fully supportive of the direction and progress of the group and its underlying businesses,” they said. The 2017 acquisition by Mayfair of its 60pc stake in the business saw Ceres Bidco acquire 100pc of two operating companies, Aran Ard and Cuisine Royale, for €45.
3m. That included a cash consideration of €29m, and €16.2m of the purchase consideration was settled in loan notes.
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