Typhoo Tea Limited, maker of one of the UK’s bestselling teas, is preparing to call in administrators.
The Bristol-headquartered Typhoo, which saw losses balloon to almost £40m last year after trespassers broke into one of its factories in Merseyside, has filed notice of intent (NOI) to appoint administrators, according to court documents filed on Thursday (14 November).
Typhoo is not yet in administration, and the filing of an NOI is often a tactic used by distressed businesses to buy breathing space from creditors.
Dave McNulty, newly appointed CEO of Typhoo, said the move would enable Typhoo “to pursue a sale of the business”.
“A further statement will be issued in due course with further information,” he added.
Founded in 1903 by Birmingham grocer John Sumner, Typhoo is the eighth-largest tea in UK retail. Since 2021, it has been majority-owned by private equity firm Zetland Capital.
Sales of its flagship namesake brand are on the up, having grown 48.3% to £6.8m on volumes that have surged 43.0% [NIQ 52 we 15 June 2024].
However, the wider Typhoo business has suffered a number of setbacks in recent years as shoppers have turned away from traditional black tea to coffee, herbal infusions and cold carbonated drinks.
Typhoo revenues have fallen from £82m in 2014/15 to £25.3m in 2022/23, after the company rationalised its SKU count and exited unprofitable ventures including own-label products for UK and international customers.
Losses, meanwhile, have totalled over £120m since 2017/18, and skyrocketed last year after Typhoo recorded one-off exceptional costs totalled £24.1m in the year ended 30 September 2023.
A “significant portion” of these one-off costs were attributed to a group of “organised trespassers” who broke into Typhoo’s closed Merseyside factory and occupied it for several days in August, causing “extensive” damage to its fabric and contents, as well as rendering “a material quantity” of stock unusable.
The trespassing incident also delayed a planned sale of the factory and caused “significant business interruption”, Typhoo said.
Debts at the private equity-owned Typhoo, meanwhile, stood at £73m as of September 2023, up from £53m a year prior.
Speaking after the publication of its latest full-year results, Typhoo’s then CEO Andrew Reardon told The Grocer the business was “now poised for growth in 2024 and beyond” after introducing a “transformed and optimised operating model”.
The brand was relaunched this autumn to place greater emphasis on a new mission to tackle the issue of sexual violence against women working on tea plantations in Africa.
No comments yet