FRP to administrate farmer-owned Angus Cereals

18 July 2018 Consultancy.uk

The future of a Scottish farming co-operative has been left hanging in the balance, with administrators rushing to find a buyer ahead of the year’s cereal harvest. Angus Cereals, which is being administered by FRP Advisory, is a key grain supplier for food producers across the east of country.

Angus Cereals stores and sells grain on behalf of its 69 members from across the East of Scotland. The firm began operating for the 2011 harvest, with 25,400t of storage, but seems to have overstretched itself with the further development and investment in expanding this to 40,000t of storage, as well as the group’s handling and drying facilities at Montrose Harbour, amounting to £7 million being invested in total.

The UK’s cereal farming sector is expected to enter a difficult period in the second half of 2018. Due to a sustained heat-wave, the yield for such produce is likely to be lower than expected, pushing prices in stores up. Meanwhile, the UK Trade Policy Observatory’s modelling has predicted further price increases of 1.8% for bread and cereals resulting from Brexit pressures.

As the firm collapsed into administration in July, following financial difficulties, administrators are now faced with a race to find a buyer for the farming co-operative before the 2018 cereal harvest. Iain Fraser and Tom MacLennan – partners at specialist business advisory firm FRP Advisory – have been appointed joint administrators, and are optimistic that the sale can be achieved.

Iain Fraser said, "Angus Cereals has played an important role for the agricultural community in the East of Scotland. Unfortunately, it has not been possible to secure the future viability of the business, and the board has been left with no alternative but to appoint administrators. We are now actively seeking a buyer for the assets at Montrose, and are hopeful that this can be secured in time for the 2018 harvest."

Formed in 2010, FRP Advisory is a business consultancy based in the UK, which provides restructuring, corporate finance, debt advisory, forensic accounting and pensions services to clients across the country. The firm is also one of the UK’s largest specialists in the area of corporate restructuring. The business has more than 300 staff members, including 49 partners, and operates from 20 locations across England and Scotland.