Creditors to meet but cafés operator says jobs are safe

Date Published: 12-Sep-2011

BY ENDA CUNNINGHAM

The operator of three cafés in Galway City and Salthill has said there is no threat to an estimated 30 jobs, despite doors remaining closed at the premises this week.

However, the Sentinel has learned that creditors’ meetings – called when a company is in financial difficulty – have been convened for the Coco Cafés in Salthill and Eyre Street and Elle’s Café on Shop Street next week.

It’s understood the three premises employ around 30 staff between them, and yesterday (Monday) morning, notices were placed in their windows saying they were ‘closed for renovations’ until 8am on Thursday.

Owner Noel Elwood told the Sentinel there is “no problem” and that all jobs are safe.

However, when asked about the creditors’ meetings for Elmac Café Ltd (Coco Eyre Street), Coco Café Salthill Ltd and N.J. Ltd (Elle’s Café) – called for next Tuesday – Mr Elwood refused to comment.

According to accounts for Elle’s Café for the year ended April 2010 (filed in April of this year), the company, which is run by Mr Elwood and his wife Julie, made a loss of €188,000, up from €150,000 the previous year, with creditors owed more than €410,000.

This includes total borrowings of €204,000, trade creditors of €119,000 and €88,000 owed in taxes.

The company was treated as a going concern because “the directors have indicated that they will introduce additional private funds to support the company should it become necessary”.

No accounts are available for the Coco premises in Salthill, while the Eyre Street premises (both of which are run by Mr Elwood from Bushypark and business partner Martin McDonagh from Doughiska) had net liabilities of more than €71,000 in its 2009 accounts, the most recent available.

Auditors noted the “significant loss” and said the businesses’ future viability was dependent on continued support of the directors.

Creditors were owed more than €230,000, and a connected company advanced loans to the business of more than €73,000. The directors each gave personal guarantees for €20,000 to AIB.