Hopes for Bomfords Group rescue

Administrators are confident that troubled fresh food producer Bomfords Group will be sold after receiving a “large” number of enquiries about the business.

The group, which comprises MBN Bomford, Bomfords, W Bailey and GF Produce, called in administrators Deloitte on June 22, unable to deal with its cash flow problems.

Bomfords Group, which is based in Atherstone, Stratford Upon Avon, supplies fresh produce, including legumes, spring onions, asparagus and sweet potatoes to major supermarkets and other retailers. It has a turnover of about £150 million and employs about 2,100, including seasonal labour.

Another subsidiary, Bomfords Prepared, which supplies prepared food services and products, is not in administration, but Bomfords Group’s 75% shareholding in this business is also available for sale.

The group’s failure is down to significant cost over-runs in the recent construction of a new pack house and administration building at Atherstone together with start up investment for Bomfords Prepared, which impacted upon cash flows. In addition, integration benefits from two recent acquisitions have taken longer to come through than envisaged.

Nevertheless, the underlying Bomfords business is robust. “The group has a strong market position, with a UK market share of approximately 25 – 55% across its various principal product categories,” said Dominic Wong, a partner in Deloitte’s Reorganisation Services practice. “It is profitable and has an enviable customer base.

“Unfortunately, the capital expenditure overrun on the Atherstone facility was significant and could not be met from cashflows. However, the facility is now complete and operational and the recently established Bomfords Prepared business is also now profitable. Recent acquisitions have been substantially integrated.”

Andrew Peters, a fellow partner in Deloitte’s Reorganisation Services practice, added: “The administrators have already been contacted by a large number of interested parties and the businesses are continuing to trade as normal whilst the administrators seek either the rescue or sale of the group.”

Marc Barber

Raven Connelly

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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