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Framptons has more than 50 years’ experience in manufacturing egg products

Contract manufacturer Framptons is seeking fresh financing to help the group survive a series of supply chain shocks, The Grocer has learned.

Recovery specialists at Resolve have been drafted in to explore options at the business, including finding a potential buyer.

City sources said Framptons was an integral part of the supply chain, co-packing for dozens of brands and other food manufacturers, including the likes of Müller, Delamere Dairy and Mighty Pea.

The business, which employs about 300 staff, needs a cash injection of about £5m to ensure its survival through a challenging macroeconomic environment, sources added.

Based in Somerset, Framptons can trace its heritage back to 1898 as an egg wholesaler and, in its modern form, the company has more than 50 years’ experience in manufacturing egg products and in excess of two decades in contract processing packing.

Today, contract packing makes up the vast majority of the business’ revenues, with products supplied to all the major retailers and foodservice wholesalers, as well as on-the-go retailers such as Greggs.

Liquid egg 

It also supplies cooked omelette and liquid egg products, primarily for foodservice industry.

CEO Ian Harvey currently holds the majority shareholding in the group.

Revenues declined 6% to £37.6m in year ended 30 June 2021 as pandemic lockdowns resulted in lost sales to the hospitality industry and through convenience stores, pushing the group to a pre-tax loss of £838k, according to the most recent filings at Companies House.

The accounts also raised material doubts on the group’s ability to continue as a going concern in the long term given liabilities of £5.2m and the reliance on debts, with an invoice finance facility of £6.5m due for renewal last year and Covid loans of £800k and a £600k term loan.

An unprecedented rise in energy prices in the aftermath of the Ukraine war added to the company’s troubles and put further pressure on margins.

The accounts also highlighted a series of “one-off setbacks” related to back-up generators being used in an attempt to offset high electricity costs, which resulted in capacity in the factory being lost due to “unexpected reliability issues”. Grid-supplier gas pressure interruptions also resulted in problems for the steam supply that runs the factory.

The directors’ statement said the group had sufficient funds, thanks to financing facilities, improved operational performance and ongoing support from banking partner HSBC, to meet its liabilities for at least 12 months from the date of the accounts being signed off on 29 June 2022.

Auditors at Bishop Fleming said in the accounts that further losses were recored in unaudited accounts in the period to May 2022 and there was “a material uncertainty exists that may cast significant doubt on the group’s or the parent company’s ability to continue as a going concern”.

Framptons and Resolve declined to comment.