Seafood Products Limited’s employees were made redundant without notice after the company went into administration earlier this year.
In March, SalmonBusiness broke the news that Ocean Supreme-backed UK distributor Seafood Products Limited had officially entered into administration.
The company, headquartered in Farnham, Surrey, ceased trading 22 March 2024.
Now a report filed by administrator Danny Allen of 360 Insolvency Limited with the UK’s Companies House has shed further light on the collapse of the processor that had reported a turnover of £33 million last year.
| Year Ending | Turnover (NOK) | Gross Profit (NOK) | Operating Profit (NOK) | Net Profit (after tax) (NOK) |
|---|---|---|---|---|
| March 2020 | 22,901,970 | 1,411,165 | 522,599 | 394,081 |
| March 2021 | 24,435,046 | 1,054,002 | 232,861 | 182,002 |
| March 2022 | 24,885,471 | 470,654 | (386,979) | (267,545) |
| March 2023 | 33,110,828 | 840,904 | 4,858 | 22,025 |
Incorporated on September 24, 1987, Seafood Products Limited was controlled by Harald Skaar (40%) and Botholf Stolt-Nielson, general manager of Ocean Supreme (50%) and Ocean Supreme Holding AS (10%).
Skaar, who built Skaarfish into one of the largest salmon export companies in the world in the 1980s, has also held positions with Pan Fish, the company that became Mowi and Bakkafrost Scotland.
In 2019, Myungjin Holdings Corp acquired a 50% stake in Seafood Products Limited for KRW 1.9 billion ($1.4 million). This transaction involved Myungjin Holdings purchasing 0.075 million shares from Ocean Supreme and 0.3 million shares from Harald Skaar.
The shares were, however, transferred back from the Korean company to Ocean Supreme as a result of a shareholders agreement last year, Allen told SalmonBusiness.
Historically, SFP reported profitable trade, using fish processing facilities provided by Saltire Salmon in Grimsby. The company had an invoice financing facility from Ocean Supreme and served high-profile clients in the hospitality and food industries.
Pre-pandemic turnover reached £15 million in 2018 and £15.2 million in 2019, with net profits of £393,000 and £155,000, respectively.
During the latter half of 2023, however, SFP ran into significant financial difficulties.
Debtors
The events leading to the collapse of the company are detailed in a letter from a litigation company dated November 2023 and seen by SalmonBusiness.
Now, the report filed by administrator Danny Allen shows these issues to be linked to three shipments to US-based importer Smith & Son, resulting in an unpaid debt of $662,882.
Legal action has been commenced in the US by the company with Atlanta-based law firm Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. acting on its behalf.
A further £344,180 is owed by Essex Salmon Importers Ltd. The company was placed into compulsory liquidation on 14 November 2023.
Essex Salmon Importers has undergone several name changes over the past few years. The company was known as Bleikers Bio-Tech Ltd from September 22, 2021, to July 20, 2022, after former director Dave Smith bought Bleiker’s Smokehouse out of administration.
It then changed its name to Salmo Group Ltd, a title it held from July 20, 2022, until May 5, 2023. Following this, the company rebranded as Seriously Fish Limited, a name it used from May 5, 2023, to June 9, 2023. Most recently, it was named Liamedos Seafood and Smokehouse Limited from June 9, 2023, to August 15, 2023.
Filings from Essex Salmon Importers show that Smith ceased his role as director in August 2023.
Smith & Son has no connection or affiliation with Dave Smith, he told SalmonBusiness.
Loss of major contract
Only a portion of the outstanding amount owed to SFP was covered by credit insurance, and efforts to recover the funds were unsuccessful.
The company is also owed €300,658 by Alibaba.EU.com which, the administrator understands, is also subject to dispute.
The cumulative effect of these events, totalling £1,121,133, severely impacted cash flow, according to the report from the administrator.
Compounding the difficulties caused for the company by problems above, the loss of a major contract with Costco further strained finances.
“Whilst this contract represented a significant contributor to turnover, it provided for much lower margins than the company was accustomed and made a relatively modest contribution to the bottom line,” wrote the administrator.
“That said, the loss of turnover and activity was felt, particularly in the context of the non-payment of the debts.”
Administration
Unable to discharge its debts fully, SFP accrued liabilities with trade suppliers and relied on creditor forbearance while pursuing the international debts, according to documents filed with Companies House.
Legal advice was sought, and the directors were confident in their claims, particularly concerning the debtor in the United States,
Further financial support from shareholders were unavailable, however, as Ocean Supreme decided to focus on other markets away from the UK, according to Allen.
Ocean Supreme are owed £326,611. Based on current estimates, fixed charge realisations are expected to be £151,065 which wil be paid to Ocean Supreme in priority to all other creditors, leaving an estimated shortfall of £175,546, according to the administrator.
There are a total of 14 trade and expense creditors with claims totalling £1,924,428.
SFP initially sought debt recovery advice from Martin Kingman of Professional Litigation Company Limited (PLC). Upon reviewing the company’s position, an introduction was made to Danny Allen of 360 Insolvency Limited for formal insolvency advice.
An initial meeting was held on December 15, 2023, to explore the possibility of a company voluntary arrangement (CVA). However, after detailed enquiries, it was determined that a CVA carried too much risk and was not appropriate.
Consequently, the board concluded that placing the company into administration was the most effective means of attempting to realize value.
Seafood Products Limited declined to comment when contacted by SalmonBusiness.
