Hill Station enters ice cream premier league with reverse takeover of Loseley and Granelli
Super-premium ice cream manufacturer Hill Station will transfer production from its tiny 232m2 factory in Calne, Wiltshire, to a state-of-the-art 7,432m2 site at Cwmbran, South Wales, operated by its new acquisition, Loseley Dairy Ice Cream, by the end of the first quarter of 2006.
Speaking after Hill Station announced a £5.6m reverse takeover deal to acquire loss-making rivals Loseley Dairy Ice Cream and Granelli McDermott, co-founder Charles Hall said: “These acquisitions will result in a major transformation of Hill Station from a niche manufacturer of branded products to a broadly-based player in the ice cream sector. This makes us the third largest ice cream manufacturer in Britain by value.”
Loseley’s founder Tim Wilson will act as a consultant to the enlarged business, while Granelli boss Gwyn Jones will stay on as md at Granelli, which operates from two sites in Cheshire, said Hall. “We’re not making any decisions about Granelli at this stage, but production at Hill Station will move to Loseley in the the first quarter of next year after we have installed a new super-premium production line.”
He added: “The deal will broaden Hill Station’s product range, drive synergies, cut overheads and improve efficiency at Cwmbran, which has been underutilised.”
Hill Station, which was set up in the late 1990s by Hall and his wife Gina to produce premium branded ice-cream, has been looking to commission a larger site or acquire another business for several months, he said.
Both Granelli and Loseley produce own-label ice cream for the supermarkets and other customers, plus a range of products under the Louis Granelli, Granelli, More from Granelli, Loseley, Yorkshire Dales and Thayer's brands.
The deal, which will increase Hill Station’s turnover more than sixteen-fold from approximately £1m to about £16m, will be funded by £2m in cash, plus the repayment of £400,000 in loans and the assumption or repayment of £3.2m of existing bank facilities.
The company is raising £7.5m on the Alternative Investment Market to fund the deal, which will leave a sizeable sum to invest in the business, he said.
Hill Station recently lost its listing with Sainsbury. However, it has had a lot of promotional activity in Waitrose, Tesco Express, Ocado and Somerfield this year and is hoping to get back into Sainsbury in the near future, he added. “We posted a 23% rise in turnover in the six months to July 31, 2005, so I’m feeling very confident about our prospects.”
Foodservice is also a growth opportunity, said Hall: “We were very pleased to be selected as the ice cream for the British Airways London Eye earlier this year. We have positioned three selling units at the South Bank site of the Eye, all liveried in Hill Station colours, and we expect to achieve significant brand exposure from this activity.”
Granelli posted a pre-tax loss of £73,000 on turnover of £5.84m in the 10 months to August 31, 2005, while Loseley posted a pre-tax loss of £843,000 on turnover of £5.82m in the 36 weeks to September 10, 2005.
