Two food brands with national supermarket listings have collapsed less than two years after raising hundreds of thousands of pounds from crowdfunding investors.
Lick Frozen Yogurt and gluten-free manufacturer Feel Free, which both used Crowdcube, appointed insolvency firms last month after running out of money.
Lick raised almost £300k from 293 investors in April 2015 - valuing the lossmaking business at just shy of £3m - to support its supermarket growth strategy. Founded by Owain Williams and Ky Wright in 2008, Lick sells its yogurt tubs in Sainsbury’s, Waitrose, Ocado, Yo! Sushi, Budgens and Wholefoods. It also branched out into the music business with its own record label in November 2015.
Feel Free, which supplies gluten-free doughnuts and other lines to the likes of Tesco, Sainsbury’s and Morrisons, as well as Ocado, Budgens, Nisa and Holland & Barrett, secured £210k in October 2015 from 147 investors to invest in its Yorkshire factory. It had already raised £162k from a previous campaign on Crowdcube in 2013.
The Grocer also has an update on the Weetabix auction process this morning. US food group Post Holdings appears to have moved into pole position in the £1.5bn auction for the UK cereal group.
Post, the number three cereal maker in the US with brands including Honey Bunches Oats, Grape Nuts and Cocoa Pebbles, is understood to be leading the race to buy the Bright Food Group-owned breakfast cereal manufacturer, according to a number of market sources.
The Grocer understands that bid interest has ended from other previously active suitors, notably Nestlé and General Mills joint venture Cereal Partners Worldwide and Italian pasta group Barilla. Kellogg’s retains a watching interest in the process, though it is not thought a likely destination for Weetabix given the potential regulatory difficulties.
Other names previously linked include Associated British Foods, PepsiCo and Pladis.
Also this morning, Britvic (BVIC) has completed its acquisition of Brazilian drinks business Bela Ischia Alimentos for R$218m (£56.8m).
Bela Ischia is a “strong and well recognised consumer brand” with its largest presence in the key areas of Rio de Janeiro and Minas Gerais. Bela Ischia revenues were R$160m and EBITDA was R$18.5m in 2016.
Britvic stated: “The acquisition strengthens both Britvic’s brand portfolio and distribution footprint by complementing our existing strengths in Sao Paulo and the north east.”
The combined businesses are expected to realise cost savings, principally from efficiencies in procurement, production, logistics and administration, of at least R$10m. It is anticipated that exceptional costs of approximately £3.5m will be incurred this year in relation to the acquisition and integration of Bela Ischia.
On the markets this morning, the FTSE 100 has opened 0.4% lower at 7,355.4pts.
WH Smith (SMWH) is a big market mover this morning, jumping 5.9% in early trading to 1,798p. Other early risers include Applegreen (APGN), up 2.9% to 414.8p and Hotel Chocolat (HOTC), up 1.1% to 296.3p,
Yesterday in the City
The FTSE 100 maintained its strong gains of Wednesday ending Thursday flat at 7,382.4pts.
Total Produce (TOT) jumped 2.9% to 161p after announcing an 8.9% rise in full-year revenues and a 15% jump in EBITDA yesterday, driven by acqusitions.
soft drinks business Nichols (NICL) was 1.9% up to 1,7200p after reporting reported surging UK sales following a “strong performance” by key brand Vimto.
Away from the UK, AB InBev (ABI) shares dropped 2.5% to €101.30 in Brussels after the world’s biggest brewer posted far weaker than expected fourth quarter results, but promised greater synergies would be realised from its acquisition of SABMiller.
Sainsbury’s had a weak day of trading, falling 1.4% to 264.7p, while Marks & Spencer (MKS) and Associated British Foods also slid during the day, falling 1.3% to 333.4p and 1.2% to 2,587p respectively.