Wed, 07 Aug 2024 | BUSINESS SALE
A Devon-based processor of British crab has been acquired in a rescue deal after falling into administration earlier this month. Blue Sea Food Company, which is focused on buying, processing and selling crab, collapsed following a period of challenging trading conditions in the wake of the COVID-19 pandemic.
The Paignton-based company had suffered as a result of headwinds including cost inflation and the cost-of-living crisis, which placed pressures on its working capital.
For the year ending April 30 2023, the company reported turnover of £13.5 million, roughly consistent with £13.8 million the previous year, but saw its gross profit margin decrease from 35.8 per cent to 32.9 per cent, which was attributed to higher raw material costs, largely resulting from increased fuel prices in the wake of the war in Ukraine.
The company also faced increased wage and salary costs in the midst of a “tightening labour market” and an increase in the National Minimum Wage. This confluence of factors led to EBITDA decreasing from £1.2 million to slightly under £500,000.
As a result of the company’s challenges, Kroll Advisory were appointed as administrators of Blue Sea in early August. The administrators have now completed a sale of the company’s trade and certain assets to New England Seafood International (NESI), a UK-based seafood importer and processor with bases in Surrey and Grimsby.
The acquisition secures Blue Sea’s supplier relationships and more than 160 jobs, as well as providing a boost to crab fishers in the South West and the wider British crab market. Many customers rely on Blue Sea for regular supplies of British crab.
Dan Aherne, CEO of NESI owner Woocheen Global Seafood, commented: “We have been really impressed by the passion and energy of the Blue Sea team for promoting British crab in the UK and around the world. Blue Sea Food is a great business but it suffered under too high a debt burden.”
"We are pleased to have been able to move quickly, working constructively with Kroll to secure all jobs at the Paignton operation and look forward to supporting the team there and working closely with the suppliers and customers of the business to forge a successful future for Blue Sea under NESI ownership."
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