From receivership to a new firm of thriving bakers
I first started working with THP seven or eight years ago. My wife and I own the Jack and Jill Day Nursery in Chelmsford, and Keith Pullen has been our accountant for all those years.
Keith is very supportive, understanding and sympathetic. He always offers a constructive view on how to save tax, invest money and improve our accounting processes. THP also looks after our payroll – Claire Dittrich at the Saffron Walden office looks after this service brilliantly.
When I discovered THP, I was impressed because this wasn’t a company that was just trying to expand its client list. They were a complete contrast to the accountancy firms we used in the early days of the nursery – these never gave us a clear understanding of what we were paying for. In contrast, THP assisted with all the financial dealings of the business. I found it a comfort.
THP was also a major help in my next project. Back in 2010, while my wife looked after the day-to-day running of the nursery, I worked as a sales manager in a bakery in Halstead. One Friday I was sitting at my desk when a man walked in and said: “I’m putting the company into receivership. What would you like to do?”
To be honest, I didn’t know what to do at the time, but the receiver told me: “I’ll be back on Monday. If you’re interested in running the business, let me know.”
So I teamed up with another colleague, Vlad, and together we took over the business and renamed it Peacock Foods. It cost us nothing, but we had to take over the lease and keep on over 40 staff. It was a daunting prospect.
We knew that the first year was going to be tough. Suppliers had little confidence in the business, so they were unwilling to give us good credit terms or competitive rates on the ingredients we needed.
Cash flow was an immediate priority
Our immediate priority was to sort out our cash flow.
We did this by turning to an invoice financing company. They would advance us 80% of each invoice we issued to customers, with the remainder after 4 weeks. Of course they took a cut as well.
That brought our cash flow forward a month. Our next priority was to rebuild trust with our suppliers. We made sure all the bills were paid on time, and really worked hard to prove Peacock Foods was going places again. It paid off. After about six months, suppliers began to drop their prices a little. It made a huge difference. Even shaving 40p off the price of a 16kg bag of flour had a major impact – given that we use between 15-18 tonnes every week.
At the same time, we had to work hard to serve and expand our customer base. In our industry, there’s a real oversupply for bakery products – retailers can choose between four or five good local and national bakers, so you have to provide a service that makes you stand out.
To begin with I concentrated on larger customers like Aldi, which we supply in the South East of England. With customers like this, you really have to be fast, flexible and efficient. You make sure you provide the bread, rolls and cakes they need, delivered in the baskets or boxes they prefer, within very short windows of time. We did it really well – and we now get 150% more business from Aldi alone.
Next I looked for new business. One of the success stories here is the work we now do for the East of England Co-op and we are their nominated bakers in Essex. We work with other local producers to provide superb products from local ingredients and our next project is to get them accepted under the Co-op’s Sourced Locally brand. So we might use fresh raspberries from Stanway, banoffee curd from Tiptree or Marriage’s flour from Chelmsford to make delicious East Anglian products. We deliver these direct to Co-op stores, not to distribution centres, so they reach the consumer as quickly as possible.
But it’s not just the big companies we bake for. Yes we supply outlets like Budgens and Londis, but Peacock products are bought by school caterers, coffee shops and smaller retailers across the region. Our Yum Yum doughnuts are distributed across the whole of the UK.
All this effort to turn the company round paid off. By February 2012 we no longer needed the services of the invoice financing company. They were amazed and gave us incredible accolades – very few clients in our position manage to build up their cash flow so quickly. It normally takes years to break the cycle of needing a third party company to advance money on your invoices.
And of course, as the company grew we came to rely on THP more and more. They were very supportive throughout and gave us excellent advice, as well as giving us help and support with all aspects of our accounting. But we knew from their work with us at the nursery that they would be there for us, no matter how difficult things might become. Nowadays, Keith and Mark visit us regularly and help us plan the way forward.
I’m proud of what the whole team at Peacock Foods has achieved in a few short years. Taking a company in receivership and turning it into a thriving concern isn’t easy, and every person here has contributed to that. As long as we keep our innovation level high, our service exemplary and carry on building that confidence in our ability to deliver, I think we have a very bright future ahead of us.