The owner of Liverpool cake decorating firm Renshaw intends to appoint administrators amid financial difficulties.
Real Good Food plc announced on Wednesday (November 29) that London Stock Market trading in its shares had been suspended. This comes after the company called in Interpath Advisory to explore its future options, due to poor trading conditions and a bleak financial outlook.
Renshaw now intends to appoint Richard Harrison and Will Wright of Interpath Advisory, as joint administrators of the group within 10 business days. However, the future for Renshaw remains uncertain even if the administrators are appointed.
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Earlier this year, the ECHO reported that more than 100 jobs had been lost at Real Good Food as it brought in plans to "radically reform" the group as it battled a "perfect storm" of rising costs and lower revenues. The company reduced its headcount from 318 to 201 in the year to March 31, 2023, and has since lowered it further to 186.
Over the year, its revenue also decreased from £40.4m to £32.4m. According to figures filed with the London Stock Exchange, Real Good Food's pre-tax losses were cut from £18.9m to £9m during the financial year and its total net debt increased from £25.5m to £31.2m.
The company's board has now said that a solvent sale of the business and its assets is unlikely but a further announcement is expected once further steps are taken to appoint administrators.
A notice published by the company yesterday (November 28) says: "As announced on 17 November 2023 the Board had carefully reviewed its management accounts and working capital position, as well as the expected sales in November and December. It was noted that performance had been constrained by supply issues and cash constraints which are continuing and that sales in November and December were expected to be lower than previously forecast.
"This led the Board to conclude that it is in the best interests of all stakeholders to explore strategic options for its remaining business JF Renshaw. The Board of JF Renshaw consequently resolved to appoint Interpath Advisory as its adviser to assist with the review of all strategic options, given a challenging environment for the Company and the related cash flow constraints, which included the sale of the shares or the business and assets of JF Renshaw as well as sourcing external funding.
"Discussions with respect to a sale of JF Renshaw are continuing, however the Board has concluded that the likelihood of a solvent sale of the business and assets of JF Renshaw is very limited within a constrained timeframe. Given the impact of the current operating environment on the Group, the Group's limited working capital position and the consequential uncertainty regarding the Group's financial position, the Board and the JF Renshaw Board have each concluded that it is required to take the necessary steps to preserve value for creditors.
"The Board and the JF Renshaw Board have each therefore filed a Notice of Intention to appoint Administrators this afternoon, with a view to appointing Richard Harrison and Will Wright of Interpath Advisory, as joint administrators of the Group ("Joint Administrators"), within ten business days."
Found behind Liverpool Women's Hospital on Crown Street, Renshaw is said to make 90% of Britain's marzipan and most of the country's ready-rolled icing. The company can trace its roots back to 1885 when members of the Allmey and Layfield families, who lived next door to each other in the streets below the Anglican Cathedral, joined forces in a grocery business.
In 1898, Allmey and Layfield opened its own sugar mill in Holden Street, in a district off Upper Parliament Street known as Windsor. The Windsor mill continued to expand and is still at the heart of the company’s premises today.
Shortly after World War II, a prefabricated Nissen hut was put up at the site to house the roasted and salted nut production line. The building soon became known as The Nut House.
In 1991 all production moved to Liverpool, after which £16m was invested in the site. Today the site, a mixture of old and new buildings, occupies a block of land between Crown, Falkner and Upper Parliament Streets.
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