Scott Wright: What next for Morton’s Rolls after hundreds of job cuts?

The announcement brought to an abrupt end a deeply uncertain period for staff, which began when directors took the decision to cease production at the start of the month. It is to be hoped that everyone affected is able to find suitable alternative employment as quickly as possible.

Such is the profile of Morton’s, which was originally founded by Bob Morton and Jim Clarke in Anniesland in 1965, it has been no surprise to see the story of its travails generate so much media attention.

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It may not have the international standing of Johnnie Walker, Irn-Bru, or Walker’s Shortbread, but it would be hard to overstate the affection that people throughout the west of Scotland and beyond have for its famous crispy rolls.

Generations of Scots would readily testify that a Morton’s roll filled with square sausage is one of life’s great culinary combinations. Many will now be lamenting the possibility that we have enjoyed this delicacy for the last time, given the very real prospect that the bakery will have closed for good.

There has been speculation in press reports that talks have been taking place with potential investors, raising hopes that the business may be saved in some form and that staff may be re-employed. But, so far at least, there has been nothing to suggest this is more than speculation.

There certainly has been no indication from the provisional liquidator that potential investors are in active talks with a view to taking over the business. And even if Morton’s does have a future, there is a good chance it would be under a different guise to the company that has traded in recent decades.

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The fact that a provisional liquidator has been put in control of Morton’s, following a court order to wind up the business, may suggest that the days of the current entity that operates the business – Morton’s Rolls Limited – are numbered.

Directors may have taken the decision to wind up the company in order to protect its assets, chief among which will be its factory and the intellectual property surrounding the Morton’s brand.

The role of a liquidator is to raise as much money as possible from the sale of a company’s assets, often to provide a return to any creditors. Given the affection with which the Morton’s brand is held, there may well be no shortage of bidders for that particular piece of intellectual property, not to mention for the recipe of its famous crispy rolls if it has been trademarked. It was also only two years ago that the company invested in new machinery, after securing a six-figure deal to supply Lidl with rolls, cakes and savoury products. That machinery may retain significant value.

For the time being, the task of Mr Robb at FRP will focus on supporting the employees affected and getting to the bottom of the precise financial position of the company.

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In terms of information available to the public, there is a lack of detail on the current financial state of affairs. Records at Companies House show that the firm's accounts for the year to March 31, 2022 were overdue and remain unpublished, following the move into provisional liquidation.

The most recent accounts which are available relate to the year ended March 31, 2021 and those show that Morton’s fell to a loss of £375,915, following a profit of £201,596 the year before, with turnover dropping to £11.8m from £12.3m. With the period covered by those accounts coinciding with the first 12 months of the pandemic, a loss and fall in turnover were perhaps to be expected.

Yet, while those accounts give an indication as to the effects of the pandemic, the absence of accounts for the subsequent year means there is no visibility on how the business coped with the subsequent supply-chain upheaval that came in the wake of global lockdowns. Furthermore, there is no information concerning the effect on Morton’s from the rampant cost inflation that has blighted businesses in the UK in the last 12 months, and which is likely to have had a bearing on events we have seen at the baker in recent weeks.

The surge in energy prices that followed Russia’s invasion of Ukraine has made life extremely difficult for thousands of businesses in the UK. It has been common in recent months to hear Scottish firms say their bills have risen by 200% to 300%, with the support provided by the UK Government to combat the increases considered to have been insufficient.

And it has not just been energy costs which have soared in recent months. Blockades by Russian forces have severely restricted the flow of key agricultural products such as wheat and vegetable oil from Ukraine, one of the biggest food exporters in the world, which has also been a major driver of cost inflation for UK businesses.

Upward pressure on costs has come too on pay, as labour and skills shortages arising from Brexit and thousands withdrawing from the labour market have been felt acutely across key sectors.

Against this backdrop, it is perhaps not surprising that a company such as Morton’s, which would have been a huge consumer of energy and buyer of agricultural ingredients through its manufacturing process, ran into difficulty.

From a consumer point of view, the possible demise of Morton’s is a source of sadness. Should Morton’s disappear for good, it will join the ranks of cherished Scottish brands that have disappeared over the years, including on the bakery scene where names such as City Bakeries and Bradfords have fallen by the wayside.

Hopefully, there is still an opportunity for Morton’s to live on in some capacity, and there is a chance for those who have lost their jobs to be employed by the baker once again.