Dairy group buys Liverpool baker, rescuing 110 jobs and averting administration

A Liverpool-based bakery has been saved from administration in a deal that rescues 110 jobs.

London-based dairy group, Freshways, has acquired Coulton’s Bread for an undisclosed sum.

TheBusinessDesk.com revealed last week that Coulton’s, based on the Liver Industrial Estate, in Aintree, had filed a Notice of Intention to appoint an administrator.

The firm then appointed administrators at RG Insolvency on March 22.

But Freshways has now stepped in and added Coulton’s to its portfolio, following two recent acquisitions in Milk & More, the loss-making doorstep delivery service four months ago, and milk distributor, Kent Dairy, in late 2022.

A Freshways statement said: “The integration of the Coultons Bread business will enhance operational efficiency and distribution capabilities, further strengthening Freshways’ position as a reliable bread wholesaler.

“This acquisition aligns with Freshways’ growth strategy and commitment to job preservation while remaining dedicated to sustainability and excellence in the dairy and bakery sectors and, by swift execution, has saved a significant regional business in the sector.”

Following the acquisition Freshways will now sell more than 50 million loaves a year.

Coulton’s was founded in 1987 and had depots in Liverpool, Manchester, under the Quayside Bakery brand, Newcastle, under the Bakestone Bread brand, and Bradford, under the Happy Bread brand.

It delivered more than 4,500 orders each week via its 80-strong fleet of delivery vehicles.

The firm slipped into loss, and had failed to recover from the sudden death of its managing director, Howard Hunter, in June, 2022.

Following his death, an investigation found that over a period of six years some cash sales had been “misappropriated”.

The independent auditor’s report for the financial year to January 31, 2022, said the misappropriation “became apparent after the date of his death (ie subsequent to the year-end) and had, therefore, not been included in the accounting records or in the accounts of the company”.

The report went on: “The current directors believe they have ascertained the full amounts of funds misappropriated and have taken steps to recover these funds from the estate of the deceased managing director.”

In the accounts for 2022, directors Stephen Cohen and Graham Mahon said the company “will be recovering £516,954 from his estate.”

In the last accounts filed by the firm, for January 31, 2023, the directors said they had reservations about the company’s status as a going concern as it was struggling to compensate the loss of Mr Hunter due to his sudden death “and the absence of any succession planning”.

The accounts for the year to January 31, 2023, showed that Coulton’s increased its turnover, from £17.426m to £20.23m.

However, its losses significantly widened from £62,725 in its 2022 fiscal year, to £283,119.

The directors said the accounts had been impacted by price increases, due to the war in Ukraine, that had hit grain and fuel costs.

They added: “While the directors have plans to ensure continuity and longevity, these plans have not come to fruition as yet.”