Thu, 21 Oct 2021 | BUSINESS SALE
Hull-based dried fruit and nuts importer Hider Foods has been acquired out of administration by a newco. The company, which was incorporated in 1965, fell into administration earlier this month after succumbing to a variety of factors, including COVID-19 and post-Brexit import rules.
Howard Smith and Rick Harrison of Interpath Advisory were appointed as the company’s joint administrators on October 15, immediately securing a sale of the business and its assets in a deal which preserved around two thirds of the workforce.
Howard Smith commented: "We're pleased to have been able to conclude this transaction which not only safeguards the majority of jobs, but which has allowed for the sale of the business without impacting the continuity of business operations."
Hider Foods suffered a massive hit during the COVID-19 pandemic, which had a significant impact on both its customer and supplier base. In the year ending December 31 2020, Hider Foods reported revenue of £14 million, down 36.2 per cent from close to £22 million a year earlier, and fell to a £1.85 million post-tax loss.
At the time, the company reported that: “The COVID-19 pandemic has severely affected the performance of the business this year. The numerous lockdowns impacted our customer and supplier base significantly. The focus of the business moved to meeting the needs of our customer base that remained open, to provide crucial food supplies to the nation.”
“The severe reduction in turnover and erosion of margins resulted in the company incurring a significant loss for the year, which has further deteriorated the balance sheet position, although the property owned by the business continues to climb in value.”
“As the business recovers from the pandemic, the Directors have reduced expectations on revenue, whilst protecting margins as well as continued reductions in overheads lead us to an improved performance in the current year.”
The directors added that: “A sale and leaseback agreement was also reached for our main trading premises, which has allowed us to redeem a significant portion of our secured debt, and release the remaining funds into working capital.”
In addition to COVID-19, the company was also significantly impacted by post-Brexit import rules, which exacerbated issues within its supply chain. In May 2021, the company sought to further improve its balance sheet with the sale of its branded wholesale division.
However, the business continued to incur losses, severely worsening its working capital position and leading to increasing pressure from creditors. As a result, directors opted to place Hider Foods into administration.
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