Typhoo Tea calls in administrators

(Sharecast News) - Typhoo Tea has called in administrators, it was confirmed on Thursday, after the 121-year old brand was sunk by mounting losses and cash flow issues.

The Bristol-based brand, which was founded in 1903 and is majority-owned by private equity firm Zetland Capital, has appointed Kroll as administrators.

It currently employs around 100 people.

In a brief statement, Typhoo said: "The company has experienced significant cash flow constraints as a result of supply chain disruptions and subsequent service issues. The company has been exploring a sales of the business and assets, which is in the process of concluding.

"The administration process provides Typhoo Tea with protection, allowing the joint administrators to finalise the sale in order to rescue the business."

Tea consumption has also been in steady decline for many years now, with drinkers turning to coffee and fashionable drinks like bubble tea. Competition, meanwhile, remains stiff among tea brands.

Typhoo has been trying to turn itself around for some time, but in the year to 30 September 2023, losses ballooned to £38m from £9.6m a year previously. Sales fell to £25.3m from £33.7m.

The results were also hit by £24.1m of exceptional costs after its factory in Moreton, Merseyside, was broken into in August 2023. Trespassers occupied the site for several days, causing extensive damage and rendering some tea unusable, hitting orders. The factory has since closed.

Also included in the one-off costs were impairment charges and redundancy costs.

Zetland acquired the business in 2021 from India's Apeejay Surrendra Group, which in turn bought Typhoo from Premier Foods in 2005.