Carey's East Coast Bakehouse now profitable after €3m loss
East Coast Bakehouse, the food company co-founded by former Jacob Fruitfield boss Michael Carey, is now profitable after racking up significant startup costs and losses, the businessman has said.
Newly-filed accounts for the firm show that it made a more than €3m loss in the financial year to the end of last February. That brought its accumulated losses since the firm was founded in 2015 to €7.4m.
The company has ploughed €20m into establishing a major production line in Drogheda, Co Louth, where it now employs 75 people. That compares to about 40 that it employed there this time last year. In 2018, it started operating a second shift at the plant.
Mr Carey told the Irish Independent that the company is performing in line with its strategic plan, and that its turnover is currently running at about €8m a year.
"We're continuing on the track of our business plan," he said.
Mr Carey, a former Bord Bia chairman who sold Jacob Fruitfield to Valeo Foods in 2011 in an €80m deal - and made an estimated €16m from the sale - established East Coast Bakehouse with his wife, Alison Cowzer. It started operations in June 2016 - the month of the UK Brexit vote. It's backed by a number of heavyweight investors, including Laurence Shields, the founder of LK Shields solicitors; Donard Gaynor, a former executive with US drinks firm Beam; Patrick Joy, the founder and CEO of Co Louth-based Suretank, which makes containers for the oil and gas industry; and Stephen Twaddle, the former president of Kellogg Europe.
Mr Carey said there are no plans to raise any more equity for the company.
East Coast Bakehouse is generating about 40pc of its revenue in the UK and 60pc from Ireland and about two dozen other countries it exports to. Its UK revenue includes sales of branded product and contract manufacturing.
"Despite the Brexit risk, the natural market for the business as it got established continued to be the UK," said Mr Carey. "It clearly wouldn't be good for us if it happens to turn out to be a hard Brexit. It's very disruptive."
He said that the company had taken a number of steps to mitigate the impact of Brexit.
"The domestic market becomes more attractive to us," he says. "There's currently €5m of biscuits imported into Ireland from Britain every week."
Mr Carey was in charge of Jacob Fruitfield in 2008, and its largest shareholder, when it announced it was closing its biscuit-making factory in Tallaght, Dublin, with the loss of 220 jobs. Production was moved to locations including the UK.
East Coast Bakehouse is now one of the few large-scale biscuit-making firms manufacturing in Ireland.
"The opportunity is massive," said Mr Carey. "Being in a position to provide that product locally puts us at a great advantage."
He added the company is also looking to invest more heavily in innovation.
"While we're still selling products into the UK, it's mainly more value-added products," he said. "We've developed ranges of high-protein products, sugar-free products and products that have a greater possibility of securing a healthier margin."