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Derbyshire-based doughnut producer and retailer Project D has placed its manufacturing arm, Bugibba Independent Limited, into administration. The decision comes shortly after the company entered a company voluntary arrangement (CVA) to manage debts totalling £298,000, TheBusinessDesk.com reports.
Struggles Despite Optimistic Outlook
Despite the CVA, Project D had previously assured investors that its “core business was as strong as ever” and expressed confidence in turning the corner after three consecutive loss-making months in December, January, and February. However, the company has now taken the difficult step of appointing administrators for one of its key manufacturing operations.
Strategic Decision and Cost Challenges
Max Poynton, director at Project D, confirmed the move, stating, “We have taken steps to enter administration today for one of our group’s manufacturing businesses, Bugibba Independent Limited. This decision is part of a broader strategic plan.” He noted that the company had implemented several cost reduction measures but continued to face significant challenges, including increased minimum wage, rising raw material costs, and a spike in chocolate prices. Additionally, a 20% decline in revenue due to the ongoing cost of living crisis has further strained the business.
Impact on Jobs and Support for Employees
As a result of these financial pressures, Project D has been forced to make redundancies across both its bakery and office teams. The company is working closely with those affected to support them in finding new employment opportunities.
Financial Background and Debts
Project D’s financial difficulties have been compounded by substantial debts. The largest portion of the debt, £120,574, is owed to HMRC. Payments to co-founders Max Poynton, Jacob Watts, and Matt Bond totalling £55,250 will also remain unpaid. Additionally, the company owes £26,609 to Barclays Bank for a bounce-back loan.
Previous Support and Fundraising
In 2021, Project D received an undisclosed grant from Derby City Council’s Ascend fund to help navigate the challenges posed by the Covid pandemic. In 2023, the company successfully raised £458,533 through crowdfunding to support its nationwide growth and expansion.
Conclusion
The administration of Bugibba Independent Limited marks a significant challenge for Project D as it navigates a difficult financial landscape. With redundancies already in place and debts mounting, the future of the company’s operations remains uncertain as it seeks to restructure and stabilise its business.
