Salads Limited, a prominent player in the UK salad production and distribution industry, has been placed under administration, as confirmed by an order dated February 28, 2024. The administration proceedings are being overseen by appointed administrators Alastair Massey and Glyn Mummery of FRP Advisory Trading Limited.
Speaking to food industry publication Just Food, the joint administrators described the company as "a well-established growing, packing, and importing company supplying major retailers, wholesalers, catering, and the public."
The joint administrators said that "challenging trading conditions" had left the company "unable to meet its financial obligations", leading to it falling into administration and ceasing trading. "This has resulted in around 200 redundancies, and the joint administrators will support those impacted in making claims to the Redundancy Payments Service." They added that they were now considering the options available to the business and "exploring interest from a number of parties."
Harvest continues
The business managed over 24 hectares of greenhouses in the UK and acts as an intermediary for European growers. It offers peppers, tomatoes, cucumbers, and eggplants. The company has existed for over 30 years.
UK Salads rented glasshouses from several members of the Lea Valley Growers. According to Lee Stiles, administrators have told them they are able to continue harvesting. He said earlier that most growers can't see their crop inside they, and they are going to try and save it and carry it on. "I said this on the assumption that growers would be offered a fair price for the produce again right now, I'm not so sure", he adds.
"Other sources suggest UK growers would be wary of supplying to Aldi UK now, so not much would end up where it was originally intended, leaving a gap in supply for the discounter and uncertainty over where the crop will end up."
Profitable in 2022
The move comes amidst a challenging financial landscape marked by escalating costs and uncertain market conditions. According to the latest available financial data, up to October 31, 2022, Salads Limited reported a turnover of £69.2 million with an operating profit of £789k. Despite facing mounting costs, the company endeavored to expand its customer base both domestically and internationally, aiming to bolster its production and distribution capabilities.
In its review of business operations, Salads Limited outlined plans for sustained growth, emphasizing the exploration of new avenues within the UK and overseas markets. The company also expressed intentions to invest in research and development to enhance crop quality through innovative growing methods.
However, Salads Limited acknowledged a range of risks and uncertainties in its operations. These included financial risks such as liquidity, cash flow, interest rate fluctuations, crop management, and credit risks. The company had implemented various policies to mitigate these risks, including tight management of working capital and utilization of credit insurance for trade debtors.
The challenges posed by external factors, such as the COVID-19 pandemic and the uncertainties surrounding Brexit, have further compounded the company's difficulties. While the coronavirus risk was deemed low compared to previous lockdown periods, Salads Limited continued to assess and adopt best practices to safeguard its business, customers, and staff. Additionally, the completion of Brexit introduced supply chain disruptions, prompting the company to closely monitor overheads and margins and take appropriate actions to navigate through the changes.
Despite efforts to mitigate risks and sustain operations, Salads Limited ultimately succumbed to financial pressures, leading to the decision to enter administration. The appointed administrators will now assume control of the company's affairs, business, and property, with the aim of stabilizing the situation and determining the best course of action for all stakeholders involved.