Freshways has swooped to rescue bread wholesaler Coultons from administration in a deal that solidifies the acquisitive dairy group’s position in the bread market.
The move saves the jobs of 110 staff after Coultons Bread Ltd brought in administrators at RG Insolvency on 22 March 2024.
With this deal, Freshways said it was now poised to sell in excess of 50 millions loaves a year, with it already working with Kingsmill, Allinson, Roberts and Hovis.
“The integration of the Coultons Bread business will enhance operational efficiency and distribution capabilities, further strengthening Freshways’ position as a reliable bread wholesaler,” a statement from Freshways added.
“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.”
Liverpool-based Coultons was established in 1987 and works with all the major bread brands, including Warburtons, Kingsmill and Hovis, delivering across the country. It also runs bakeries in Manchester, under the Quayside brand, Newcastle, under Bakestone, and Bradford, under Happy Bread.
It generates an annual turnover of about £20m but has been lossmaking since 2019, according to Companies House accounts.
Coultons was left reeling by the death of CEO Howard Hunter in 2022. The business said in its latest accounts for the year to 31 January 2023 that it was “still trying to absorb the impact” of the situation.
In accounts for the previous year, Coultons revealed it was recovering £517k from Hunt’s estate following an internal review of the company’s activities in the aftermath of his death. The company’s auditors wrote in the 2021/22 accounts that it had become apparent that over the past six years some cash sales had been “misappropriated” and not included in accounting records.
Prior to the appointment of administrators at Coultons, Hilco Valuation Services had been searching for a buyer to rescue the business, but an offer deadline of 18 March 2024 passed without sufficient interest, The Grocer understands. A notice of intention to appoint administrations was filed with the courts on the same day.
Freshways acquisition of Coultons comes just over four months after the dairy group acquired Müller’s loss-making doorstep delivery service Milk & More for a nominal fee.
This followed the purchase of milk distributor Kent Dairy in late 2022 and comes amid a turnaround in the company’s fortunes since the pandemic and its merger with rival Medina Dairy in 2021.
Freshways’ most recent accounts for the 12 months to 31 December 2022 revealed a “dramatic” swing back into profitability.
Operating profit rose to £2.9m for the year, rising from a loss of £4.6m in the previous accounting period, while pre-tax profits jumped by 133% to £1.8m. Cash reserves also rose significantly, by 250% to £2.1m, while turnover jumped by 38% to £347m.
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