Palmer & Harvey had debts of over £700 million when it collapsed last year, according to an administrators’ report published this week.
Almost 3000 have been made since the groceries wholesaler – which supplied goods to 90,000 grocery and convenience stores including Tesco, Sainsbury’s and Costcutters – went into administration in November.
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The new report from administrators PwC revealed that at the time of P&H’s downfall, it owed £453 million to suppliers, £66 million to tobacco companies Imperial Brands and Japan Tobacco, and £187 million to banks – especially Barclay.
The wholesaler also endured “cashflow pressures” in early 2017 after losses came in at £63.8 million in the 53 weeks to April 8, a massive swing from £28.5 million the year before.
PwC’s report also said P&H had planned to restate financial reports for prior years after omissions and misstatements were found, such as incorrect recognition of supplier income from a particular supplier, incorrect accounting for royalty payments to customers, and incorrect accounting for stock valuation for a particular category of stock.
The latest report from administrators comes after it was revealed in December that P&H paid around £70 million in dividends to directors and shareholders over the last nine years despite wracking up millions in losses.
Its pensions deficit also more than doubled to £80 million, prompting the Pension Protection Fund to assess whether the pension scheme will need support from the industry-funded body, which played a role in softening the blow to pensioners following BHS’s collapse in 2016.
The pension deficit also prompted a concerned letter from and the instigation of an investigation and impending parliamentary report from Work and Pensions Committee chairman Frank Field MP.
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