Orchard House Foods, the UK prepared fruit, fruit juice and desserts supplier that went into administration in January, owed £56.8m ($70.2m) to creditors, according to official documents.
A statutory report supplied to Companies House by administrator Grant Thornton revealed the business came close to being sold as a going concern but the would-be buyer pulled out “following a deterioration in [Orchard House’s] trading over the Christmas period”.
Grant Thornton has recovered £1.2m of the money the company was owed by debtors and is reviewing the value of Orchard House’s leasehold facilities in Corby in the English Midlands and Gateshead in the north-east of the country. Plant and machinery is to be sold off, as is the Johnson’s Juice brand and ExtraFresh patent technology.
But for those seeking recompense from the sale of Orchard House’s assets, the administrator warned preferential creditors that “any distribution is uncertain at this time”.
Orchard House’s problems started last year when the 37-year old business, which supplied major UK supermarkets and foodservice operators including Marks & Spencer, Sainsbury’s, Tesco and Pret A Manger, reported a trading loss of £7.7m in the financial year through June, partly as a result of rising input costs.
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Grant Thornton reported that it had agreed price increases and rescheduled payment terms with several key customers in the latter part of the year but Orchard House still had “significant cashflow problems”. It was dealt a body blow in November when a major customer, which accounted for around 40% of its historical turnover, served notice that it was terminating its contract with the company.
The administrator was brought in that month to sell Orchard House’s trade and assets but, despite initial interest, the company’s deterioration in trading put off potential buyers.
The Gateshead facility closed down in December with the loss of 321 jobs and in January, after Orchard House entered administration, 591 employees were made redundant in Corby with just 16 workers kept on to assist with the wind down of operations.
In a statement at the time, Orchard House said: “We have had to take this action given the extremely challenging economic and trading conditions that have badly hit Orchard House Foods.
“The economic conditions have meant increased input prices and overheads, and this has significantly increased pressure on our cash position. As a result, the directors have taken the difficult decision to file with the courts a notice of intention to appoint an administrator.”
It added that its former employees would be able to claim any outstanding monies owed, including delayed redundancy payments, via the government’s Insolvency Service.
Orchard House Foods was previously owned by US food group Hain Celestial before being sold to UK private-equity firm Elaghmore in early 2021.
