Palmer & Harvey's debts have soared by £434m following its management buy-out, accounts leaked to The Grocer have revealed.
The wholesaler's bank loans and overdrafts increased by £270m and it raised a further £142m in preference shares, documents given out by P&H at its agm reveal. The borrowing was used to pay for the £298m MBO, and other costs.
Sales in the year to 5 April broke the £4bn barrier for the first time, with a 1% increase to £4.03bn.
Pre-tax profit decreased from £27.2m to £20.3m, but the accounts claim that but for exceptional costs of £12.2m related to the MBO, it would have increased by 20% to £32.5m.
Trade creditors remained largely unchanged at £592m, while debtors rose from £269m to £323m.
"We understand there's quite a lot of anxiety caused by their debt," claimed one rival wholesaler. "We knew they'd be in debt following the MBO, but we didn't know it would be that big."
A P&H spokesman said that in the first six months of its financial year turnover increased by 6% and trading profit was up 16%. "P&H's underlying trading is robust," he added.
P&H also denied industry rumours it had been putting pressure on its suppliers over payment terms. One rival wholesaler said that P&H demanded one small supplier wait an extra 45 days for payment and asked for a 9% rebate at the end of the year.
"As part of normal business, Palmer & Harvey negotiates terms with its suppliers. We endeavour to ensure these are mutually acceptable," the P&H spokesman added.
The wholesaler's bank loans and overdrafts increased by £270m and it raised a further £142m in preference shares, documents given out by P&H at its agm reveal. The borrowing was used to pay for the £298m MBO, and other costs.
Sales in the year to 5 April broke the £4bn barrier for the first time, with a 1% increase to £4.03bn.
Pre-tax profit decreased from £27.2m to £20.3m, but the accounts claim that but for exceptional costs of £12.2m related to the MBO, it would have increased by 20% to £32.5m.
Trade creditors remained largely unchanged at £592m, while debtors rose from £269m to £323m.
"We understand there's quite a lot of anxiety caused by their debt," claimed one rival wholesaler. "We knew they'd be in debt following the MBO, but we didn't know it would be that big."
A P&H spokesman said that in the first six months of its financial year turnover increased by 6% and trading profit was up 16%. "P&H's underlying trading is robust," he added.
P&H also denied industry rumours it had been putting pressure on its suppliers over payment terms. One rival wholesaler said that P&H demanded one small supplier wait an extra 45 days for payment and asked for a 9% rebate at the end of the year.
"As part of normal business, Palmer & Harvey negotiates terms with its suppliers. We endeavour to ensure these are mutually acceptable," the P&H spokesman added.
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