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David Wood Baking supplies supermarkets and discounters with bread, cakes, biscuits and pies and pastries, as well as food-to-go such as pizza, toasties and ready meals

David Wood Baking has secured an eight-figure credit facility to help it bounce back from a devastating fire at one its factories late last year.

The Leeds-based own-label bakery agreed the credit facilities to support the group’s stabilisation with global asset management firm Barings and asset-based lender Leumi ABL.

The Grocer understands the facility is worth £30m and is being used to refinance certain lending facilities. It will provide David Wood with working capital to continue a turnaround effort at the bakery.

David Wood bounced back to profitability in 2023 after surging ingredients, transport and energy costs pushed the group to a £3.8m operating loss in the year ended 30 November 2022.

The group increased prices with its retail partners and made operational improvements and efficiencies at its sites, leading to operating profits of £3.7m in the six months to 31 May 2023.

However, a massive fire at the Dudley bakery in September 2023, which was tackled by more than 100 firefighters, derailed its progress.

David Wood successfully migrated production to four other factories with “minimal interruption” to its customer base.

However, it is currently embroiled in a legal battle with its insurers over a payout of at least £26m to cover the damage and losses caused by the fire.

Support from Barings and Leumi ABL will support the company’s efforts to scale production further and refinance existing lenders.

“Since the catastrophic fire at Dudley, we have been working tirelessly to preserve and recover our business,” said chairman and CEO David Wood.

“We have been genuinely humbled by the fantastic help, support and kindness given to us from all our employees, customers, suppliers, and wider stakeholders of the business.

“The fantastic teamwork we have experienced from everyone involved has enabled us to make amazing progress in returning the business back to normality quickly.”

Interpath Advisory advised David Wood Baking on raising the bespoke term debt and revolving asset finance facilities from Barings and Leumi ABL.

“It was important for us to find the right supportive partner as we focus on rebuilding our business,” Wood added. “Our advisors at Interpath have guided us through this process as we sought solutions that would support us in our recovery, and also enable us to look forward with confidence to continue with our growth ambitions.”

Tom Swiers, head of food and drink at Interpath, said: “UK food and drink producers have faced significant volatility in recent years, but their resilience is testament to the incredible people behind them in the boardroom, in the back office and on the factory floor. There is no greater destabilising event than a factory fire, and the team at DWB’s ability to stabilise production with customer needs protected alongside achieving this refinance is testament to a quality team and business.”

Chris Hall, managing director in the debt advisory practice at Interpath, added: “David Wood Baking’s team has an unwavering commitment to its customers and a real conviction in delivering quality product, which has underpinned this refinancing. It has been a pleasure to work alongside DWB, Barings and Leumi ABL to deliver this bespoke financing which provides the company with the stability and flexibility to deliver its recovery and continued growth.”

Founded in 2008 by David and Karen Wood, the group employs more than 1,600 staff across eight sites and supplies all the main supermarkets and discounters with bread, cakes, biscuits and pies and pastries, as well as food-to-go, such as pizza and toasties, and ready meals.