In June 2020, the company raised $3.2m via online investing platform Snowball Effect, and a further $409,287 three years later.
Creditor proposal rejected
In a letter to creditors dated April 17, seen by the Herald, Little Island director Wade Gillooly said the company had been in a difficult financial position over the past five months.
“Given the difficult position we find ourselves in, we cannot continue without creditor support to resolve our arrears and we need to formally propose a creditor compromise on the outstanding balance owed to your business as at March 31, 2025,” Gillooly said.
The letter also explained why Little Island was in financial trouble.
“Little Island has faced a significant setback recently, most notably the liquidation of one of our key suppliers, Milk Kitchen, in November 2024. Milk Kitchen manufactures our entire milk product range, and as a consequence of their liquidation, we lost significant sales of our milk range, which in turn has put considerable pressure on our cash flow.
“The Milk Kitchen business has now been purchased out of liquidation as at April 7, 2025, and Little Island will be back with full stock of our range from May 12, 2025. We now have a viable path forward and expect to restore profitability and our cashflow in this new financial year.”
In a letter to creditors on May 7, the company offered a revised creditor compromise to its original offer of $0.60 to the dollar to be paid by March 31, 2026.
This time, the company guaranteed an interim payment of $0.25 to creditors on August 1, 2025, with the remaining $0.35 to be paid by March 31, 2026.
Business for sale
Liquidators for Little Island told the Herald the company had been experiencing liquidity and supply challenges in recent times.
The liquidators said, prior to their appointment, the board of the company had entered into a sale and purchase agreement for a substantial part of the business to be sold to an independent third-party purchaser, including plant, equipment, stock and certain intellectual property, including the Little Island brand.
The terms of that sale are confidential and it remains conditional.
The liquidators said a separate, standalone portion of the overall business remains available for realisation and they are currently seeking expressions of interest.
Liabilities nearing $2m
A balance sheet for Little Island shows the company has liabilities of more than $1.9m, as of March 31, 2025.
Current liabilities sit at just over $1.4m, with the largest being $977,552 owed under accounts payable (suppliers).
More than $40,000 is owed in staff entitlements and $21,000 in GST.
The company owes over $502,701 in non-current liabilities – or debts that can be paid after a year.
This includes a Heartland Bank loan facility of $300,291.
Little Island has estimated assets of $1.8m. This includes $614,250 in stock on hand, along with fixed assets including factory and plant equipment of $593,185.
Little Island was co-founded by Hawke’s Bay residents James Crow and Tommy Holden.
Companies Office records show Crow, Gillooly, Shane Lamont and Andrew Lazootin are directors of the company.
The first liquidators’ report is due next week.
Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sports. He reports on topics such as retail, small business, the workplace and macroeconomics.
