By Chris Brook-Carter and Katy Humphries
UK-based snack food producer Golden Wonder has been put into administration, having made significant losses in 2005, according to the company’s administrator Kroll. The 2005 loss comes on the back of reported losses in 2004 of £10.8m on sales of £87.8m. The move puts some 850 jobs at risk.
A person close to the situation confirmed to just-food today that Kroll was in discussions to sell the business. He said that Golden Wonder had suffered at the hands of aggressive competitors, in particular the PepsiCo-owned Walkers, and was now no longer able to service its debt requirements.
The source confirmed that Kroll was already in discussions with third parties about a sale, but that so far nothing concrete had come of the talks. Kroll is expected to investigate the potential of a sale to an international bidder, the source added.
Adrian Wolstenholme, Peter Holder and Gary Squires, partners in Kroll’s Corporate Advisory & Restructuring Group, have been appointed Joint Administrators, a statement from Kroll said.
Golden Wonder, which is headquartered in Market Harborough and has manufacturing sites in Corby and Scunthorpe, employs approximately 850 staff across its three sites.
The company, as well as producing own-label products for a number of leading supermarkets and its Golden Wonder and Golden Skins line of crisps, also has Nik-Naks, Wheat Crunchies, Golden Lights and Ringos amongst its brands.
“Unfortunately, Golden Wonder has experienced significant trading difficulties as a result of a highly competitive market, resulting in declining sales and a loss of market share. It has faced increasing price pressures and has also suffered from less profitable contracts as a result of this competitive marketplace. As a result the company has incurred significant ongoing trading losses over the last few years. Although it closed its Skelmersdale factory in 2004, Golden Wonder has struggled to secure sufficient sales at adequate margins to fill its plant capacity,” Kroll said in a statement.
Kroll added that despite recent efforts in 2005 to further restructure the company, and attempts to seek buyers for all or parts of the business, it has been necessary to place the company into administration.
Other contributing factors to the administration include continued difficult trading conditions as well as tightening cashflow, the statement said. In particular, Golden Wonder has been experiencing trading difficulties within its own-label business, creating significant over capacity in these operations.
In order to improve the viability of the own-label business, the decision has been taken to close the Corby own-label operations with all such products being manufactured from the Scunthorpe factory going forward.
The exact timing and implications of the closure of Corby own label operations have yet to be decided and are dependent upon finalising the transition arrangements to Scunthorpe.
Adrian Wolstenholme, said: “Unfortunately, despite its well-known name and brands, Golden Wonder has suffered in recent years, primarily as a result of operating within a very competitive marketplace. The UK market is dominated by a single crisp and snack manufacturer and Golden Wonder has found it difficult to compete against this leader’s strength in the market place.
“Despite recent efforts to restructure operations and find a buyer for the business, these have not been successful in dealing with the problems faced by the company and as a result it has been necessary to place Golden Wonder into administration.”
Wolstenholme added: “We hope that the administration will provide further time to review the options available, however given the level of losses being incurred, which is unfortunately why it has already been necessary to make the decision to close the Corby own-label operations, we expect that some further action will need to be taken to restructure the business.
“At the same time, with such well-known and well-liked brands, we very much hope that a sale of all or parts of the business can be secured.”