When a company goes into administration, one of the hopes among its owners and employees is that the business and its assets can be sold on successfully.
Luckily for the Kent-based Cake Bake Company, that’s exactly what happened when SFP Group got into the mix in an attempt to salvage the stricken firm.
A successful outcome was reached when the nationwide insolvency practitioners managed to sell the confectioner to the West Midlands-based Baker Boys Limited.
The Cake Bake Company’s eight talented employees were behind the famous car cake seen in the recent Skoda television advertising campaign.
Made using 400 giant long-life sponge cakes and lashings of icing, the fondant vehicle was a true feat of confectionary engineering.
Aside from such novelty projects, the group manufactures a vast range of baked goods, supplying them to supermarkets and independent stores nationwide.
But this summer, cash flow difficulties and a technical issue led to the temporary cessation of production at the firm’s Swanscombe bakery.
In June the company went into administration, with SFP’s Daniel and Simon Plant appointed as joint administrators.
Simon Plant explained that with margins tighter than ever in the food industry, the survival of a business can be severely impacted by financial problems.
This was the case with the Cake Bake Company, which was unable to overcome its cash flow problems in such a tough trading environment.
At the time, the administrators said they had been speaking to various interested parties and had so far had an “encouraging” response.
“As a result we anticipate that we will source a buyer in the near future,” he remarked optimistically.
His predictions proved correct, as SFP Group has now successfully completed the sale of the Cake Bake Company to a new owner.
Despite early concerns regarding the cessation of trade at the firm, the administrators were able to bring about a successful result for all concerned.
The Baker Boys Limited took on the Cake Bake Company for an undisclosed sum.
“As there was a five week gap between the cessation of trading and SFP’s instruction, we needed to work very quickly,” said Daniel Plant
“In this case, SFP was able to broker a successful outcome for the business moving forward.”
Thanks to the quick work of the administrators, the Cake Bake Company was one of the lucky ones.
According to figures from the Insolvency Service, company insolvencies have been on the rise, up 3.7 per cent in the first quarter of the year compared to the previous quarter.
In total, there were 4,121 business liquidations in England and Wales between January and March 2010, some 1,074 of which were compulsory.
The remaining 3,047 were creditors’ voluntary liquidations, which were up 9.2 per cent in the previous quarterly period.
Conditions could become even tougher for many businesses in the months ahead as spending cuts bite and consumer confidence weakens.
Trading conditions could be particularly tough for retailers, as families rein in unnecessary spending to keep a lid on their finances.
But with the Cake Bake Company now in the safe hands of its new owners, the future for this particularly firm is looking much sweeter.