Wednesday 24 May 2017

Whiskey galore as Teeling's Great Northern Distillery secures €5m in new EIIS funding

Great Northern Distillery backer John Teeling Picture: Keith Arkins
Great Northern Distillery backer John Teeling Picture: Keith Arkins
Samantha McCaughren

Samantha McCaughren

The Great Northern Distillery in Dundalk, Co Louth, has secured an additional €5m in funding through the employment and investment incentive tax relief scheme (EIIS).

This brings to €12.5m the amount of funding secured by the venture to date under the scheme.

This latest tranche will be to lay down its whiskey stock for three to four years. It will mature in oak barrels in a bonded warehouse in Greenore.

The stock will be used for the company's whiskey labels, and own-label whiskey brands for supermarkets and other third parties.

The money raised to date has been used to part fund the completion of the distillery, at the site of the former Harp Brewery.

According to documentation from Cantor Fitzgerald to promote the investment, there will be a rate of return for EIIS investors of 14.5pc.

The distillery is fully operational and has a capacity to distil the equivalent of 42 million bottles of whiskey a year.

The company, which is backed by entrepreneur John Teeling, has distilled malt and grain whiskey for the past 12 months, generating revenue of €9.4m for the 12 months to April 2016 and ebitda of €2.4m.

It is currently casking around 1,000 barrels of whiskey a day. In addition to selling this newly distilled whiskey to third parties, the Great Northern Distillery is also laying down its own branded whiskey.

The firm is backed by Teeling, James Finn and David Hynes, who were the founders and former management team of Cooley Distillery, which was sold in early 2012 to Jim Beam for $95m.

Teeling said: "I am delighted by the interest, and the project is going well and the demand for Irish whiskey has never been stronger."

Funding committed under the EIIS and will be received by the Great Northern Distillery next month. Teeling had considered selling equity in the business but is content to use the EIIS scheme given the level of interest in a series of EIIS fund raisings.

A number of other whiskey distilleries are understood to be seeking to raise money under EIIS.

Among them is West Cork Distillers, which raised €1.5m under the scheme last year.

It is being promoted by Merrion Capital. In the first of half of this current year, West Cork Distillers' revenues reached €4m.

Last week, the world's second-largest distiller Pernod Ricard reported that sales growth in the US was being driven by Jameson.

Organic revenue rose 4pc in the first quarter of French company Pernod Ricard's financial year.

Under the EIIS scheme, money must be invested for a minimum of four years. Tax relief of 30pc is given in year one with a further 10pc due in year four.

The minimum investment is €25,000 and the maximum is €150,000.

The EIIS replaced the BES scheme and has been tweaked in recent years to improve its attractiveness to the investment community.

Sunday Indo Business

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