British Columbia-based Sepp's Gourmet Foods yesterday [Wednesday] revealed that the directors of its wholly-owned UK subsidiary, McIntosh of Dyce, have filed for receivership.

McIntosh, with operations in Aberdeen and Dundee, Scotland, was unable to adapt to changing conditions in the UK food industry, said the company. As a result, the operating performance of McIntosh continued to deteriorate, lines of credit were maximized and additional funds could not be raised to continue operations.

McIntosh employs 350 people. Sepp's regrets the disruption that this action will have on the employees and other stakeholders of McIntosh.

McIntosh incurred pre-tax losses of C$1.44m (US$896,000) in 2001. In 2001, Sepp's wrote off C$5.33m of goodwill related to the purchase of McIntosh and expects to have a loss on disposal of discontinued operations.

There will be no other negative financial impact to Sepp's. Sepp's has not guaranteed the loans of McIntosh and is not otherwise liable for the obligations of McIntosh. It will work with the receiver of McIntosh however to maximize shareholder value.

The Canadian operations of Sepp's reported pre-tax income of C$1.42m in 2001 on sales of C$41.6m.