Directors at speciality food wholesaler Hider Food Imports Ltd have warned there are material uncertainties that may affect its ability to trade as a going concern' after sales plummeted through Covid.
The Hull business, already operating at a loss when the pandemic hit, saw revenues drop by more than a third in 2020, from £21.9 million to £14 million, with losses widening from £924,000 to £2 million.
Employee numbers were cut from 103 to 94, with premises now sold off and leased back to generate working capital for the nuts and dried fruit operator.
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In the strategic report accompanying the results, signed off this month, director Susan Page said: “The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the directors are aware of certain material uncertainties which may cause doubt.
“The direct impact of the ongoing Covid-19 pandemic impacted all areas of the company's operations and resulted in the company incurring a significant loss for the year ended December 31, 2020. These difficulties have continued into the current financial year although, whilst still extremely challenging, trading conditions are much improved.”
Lockdowns impacted the customer and supply base significantly, with the company reliant on consistent trade and consumer demand. There were some positive signs, with “some customer channels able to grow, as customers continue to be more health-conscious in their food tastes,” Ms Page said.
The team continues to work closely with the company’s bankers and funding provider “in order to help assist the company through this difficult trading period”.
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A programme of cost cutting is ongoing, while the sale and leaseback arrangement of the main operational site at Dairycoates Industrial Estate was highlighted, freeing up cash to inject into the working capital - covering off loans due in the current financial year.
“For these reasons, the directors believe that the going concern basis is appropriate for this company,” Ms Page said.
A third generation business that launched in 1965, 2018 had seen a £129,391 profit on a £25.5 million turnover. Businesses exposed to international markets or big ticket investments had seen a cautious year as the shape of Brexit was ironed out.
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