The history of British Seafood has been as eventful as it has been brief. In 15 years the fish supplier has gone from boom to bust, spawned numerous subsidiaries and appeared in The Sunday Times' 150 fastest-growing companies list for five years in succession.
The shockwaves from what is the highest-profile crash ever seen in the UK seafood sector will be felt keenly throughout the industry; all the more so because the demise of British Seafood has come out of the blue.
"Their situation comes as a shock as the company appeared to be so strong," says one creditor. "It was heavily dependent on trade credit but it had fairly strong backers and it looked a good business in a counter-cyclical market."
The business was founded by entrepreneur Mark Holyoake in 1995 in partnership with brother Laurence. Supplying fish and shellfish to food producers worldwide, as well as meat and poultry to catering outlets and wholesalers across Britain and Ireland, it grew rapidly, with sales increasing more than 25% in the last six consecutive years. The group's last published accounts for 2008 show revenue up 27% on 2007 to £324m and gross profit up to £16m from £13.3m.
Founded British Seafood, then Bloomsbury International, with brother Laurence in 1995
Paid £35m for Grimsby-based whitefish processor Five Star Fish in 2007 lBritish Seafood posts a turnover of £324m for 2008, a rise of 27% on sales in 2007, as well as a profit of £16m
Owns about 20% of Cumbrian Seafoods and 70% of Iceland Seafood International
Is co-founder and senior partner of China Export Finance, an international trade finance provider offering financial support specifically for exports from China destined for Western markets
Valued by The Times in 2009 at £50m
"As ever with these fast-growing companies they did things differently from everyone else," says one senior industry source. "They were quite an aggressive company to do business with, stretched credit lines and didn't take part in industry affairs and joint ventures."
But beneath the headline figures, the warning signs of the impending crash were already there.
The group closed 2008 with net debt of £160m, up from £125m for the end of 2007. Sources in the industry looking at buying parts of the group told The Grocer that British Seafood went to the wall with debts of more than £200m. Holyoake has been unavailable for comment but a spokesman for the entrepreneur says reports of a £150m hole in the company's accounts "are based on the anticipated liquidation value of the group".
He continues: "We cannot comment at this stage on this projected loss, other than to say that clearly administration is not in the best interest of creditors and British Seafood, [which,] like all major seafood companies, had taken on board debt into its business."
But there is still much to mull about the circumstances in which the demise of British Seafood came about, including a complex papertrail of unexplained invoices. The Grocer understands seafood companies around Europe are being contacted by creditors of British Seafood and its subsidiary Bloomsbury International over unpaid invoices on fish orders.
Documents seen by The Grocer show that London-based Europe Arab Bank Plc states it is owed £192,500 on an order of red fish portions and Bank Mandiri (Europe) Ltd claims it should be paid 394,668 for an order of Alaskan pollock blocks provided by British Seafood to a German wholesaler. However, the German firm's finance director says it has not bought from British Seafood or Bloomsbury International and has no knowledge of the invoices in question.
"Neither Europe Arab Bank nor Bank Mandiri (Europe) replied to my question to give me details of the mentioned invoices or orders. British Seafood and Bloomsbury are unknown creditors and we didn't buy any goods from them," he says.
It's not only banks that are concerned over outstanding debts. Many other seafood firms also face being burned by the crash.
"We were owed by two of the companies. We are covered by insurance," says Peter Doswell, founder of Hull-based trader Fastnet Fish, which is part of the £350m annual turnover Andrew Marr International group, "but it is still a pain in the arse. We lose 10% and our insurance premium goes through the roof."
Fastnet is just one of a multitude of companies that stand to lose out from the British Seafood crash, not only from money owed but also from the impact of administrators selling off stock. Huge quantities of British Seafood fish are on ice in coldstores much of it in Grimsby and Doswell and other industry executives have expressed concern over the impact a fire sale could have on the market.
Figures quoted for the value of British Seafood stock in cold storage range from £20m to £50m. How much of this is within its sell-by date is the subject of much discussion. Even if a small chunk of this cod, haddock and other fish comes on the market at knock-down prices, it will have an impact.
As well as excess stock, almost all of the group's subsidiaries are now up for grabs as administrators Deloitte and MCR tout the remains of the Holyoake empire.
Industry sources describe Grimsby-based fish processing specialist Five Star Fish as the "jewel in the crown" of the group and Deloitte seems confident of a sale. "We believe that Five Star Fish is a sound, profitable business, which unfortunately has had to enter administration due, in part, to concerns over the financial position of the wider British Seafood group," says Deloitte's Matt Smith, one of the joint administrators.
Sources in the industry say Five Star ceased trading on 1 March and staff, aside from the senior management team, were sent home.
"Our initial focus is on working with employees, customers and suppliers to stabilise the trading activities of the company. We are hopeful that a successful sale of the business as a going concern can be achieved in a relatively short timeframe," says Smith. "The Five Star business is a largely standalone operation with its own management team and is a market-leading supplier to the food services and retail sectors."
Holyoake acquired Five Star in 2007. According to its latest accounts, the company had sales of £39m for 2008 compared with £19m for 2007. However, its balance sheet shows a loss after tax of £2.2m with £30m in bank loans.
Deloitte has been less forthcoming on prospects for the rest of British Seafood. The sale of some companies is being handled by MCR. These include Redditch-based £22m Vision Seafoods, Oriental Delight Foodservice and Evergreen Food Services Ltd.
Rivals will doubtless be sifting through the wreckage trying to unearth a bargain, but it's difficult to put a positive spin on what is unquestionably a low point for the seafood sector.
Fall of British Seafood may taint UK industry (6 March 2010)
British Seafood Group falls victim to trade credit woes (27 February 2010)