From the brink of insolvency to £45m turnover and sale of a food production company
Michael Jenkins founded Oldfield Quality Foods in 1986, starting with a sandwich shop. The business soon began to flourish and a second sandwich shop opened in an Aquascutum fashion store. Further rapid growth in sandwich manufacturing led to expansion into ‘cook-chill’ food processing. The speedy growth resulted in some working capital challenges as the business expanded beyond its available facilities.
Introduced by BDO
FD Solutions were asked to get involved with the business in December 1997.
Richard Brooks prepared a viability report which indicated that sandwich-making had a good gross margin and that radical action to reduce the overheads could make the business more profitable.
Restructuring the business
Realising that his management team was not strong enough, Michael took radical action and Richard planned the implementation of the overhead reduction. Working closely together with Richard, Michael took over the daily operations. He asked Richard to challenge all raw material prices and suppliers and from this, with Richards’s acute ability, margins began to improve. The management team was reduced immediately and overhead savings of £150,000 were made.
Management of cash
Michael had already commenced speaking to the Inland Revenue, but Richard negotiated a payment plan that was effective. Richard also extended a successful payment terms with creditors.
The audited accounts for the 52 weeks to April 1998 showed a pre-tax profit of £4,000.
Through 1998 they continued to focus on gross margin and won a contract for supply of sandwiches to a prestigious and growing national retail chain.
Audited accounts for 1999 showed pre-tax profit of £209,000 and the following year £609,000.
The company grew rapidly, with sales rising from £9.5 million in 2000 to £20 million in 2001 and profits of £2.8 million.
Michael approached a lender for the build-cost of a new manufacturing facility of £7.5 million, but Richard undertook all the negotiations with the lender to enable the leasing and fitting-out of a 108,000 sq ft purpose-built food manufacturing facility.
The total cost of the new facility was £11.5 million and it was completed in 20 months, going into production in May 2003.
Richard Brooks continued his involvement in the development of Oldfield Foods until it was sold to Hazlewoods (now Greencore Plc) in 2005, by which time annual turnover had grown to £45 million.
Richard and FD Solutions continue to provide services to Michael Jenkins and his other business interests.