Needham Growers will next week meet creditors to whom the West Sussex nursery owes £1.3 million.
Needham will ask creditors to support a new business plan under a deal that allows the company to repay some or all of its debts from future profits — a Company Voluntary Agreement (CVA).
Managing director John Hall said Needham threw away 500,000 plants this season, which was 20 per cent of production. Needham is pulling out of the Farplants co-operative (HW, 4 August) and Hall blamed “extreme difficulties” with sales to garden centre customers supplied by Farplants.
Farplants sales and marketing director Nick Richards emphasised that his group has integrated all Needham’s growing, adding that forward sales are up by 15 per cent for next year.
Hall, who is owed £216,000, said: “A number of other companies similar to us are struggling but we can’t see them yet. In the next couple of months it will be interesting to see what happens because it’s over that period that there are likely to be casualties.”
Monro is the next-biggest creditor, owed £180,000. Hall said “there is a very good chance” that creditors will support the CVA and will get 45p in the pound in the next five years if they do. Needham lost £413,000 on a £3.2 million turnover last year.
Needham will continue to supply 50 per cent of production to Homebase and will supply garden centres directly but not B&Q because Farplants has the contract.
It sold two of its three nurseries, to Swallowfield and Fleurie, earlier in 2005 and laid off four staff.
Have you registered with us yet?
Register now to enjoy more articles and free email bulletins
Sign up now