EXCLUSIVE by STEVEN DOWNES
National news: the closure of a Croydon bakery chain this week was covered widely, without many reporting Ranganathan’s loss of £400,000 in shares
- Romesh Ranganathan stands to lose up to £400,000
- Staff were only informed of business’s closure by text message
- Since 2023, directors transferred £5.7m property assets to another company while £2.9m was also taken out of the business
For all the outpouring of public sympathy over the closure of a long-established Croydon business, as Coughlan’s shut the doors on their bakers’ shops for a final time on Tuesday night, the public records for the company tell a story of a business that, according to their own accountants as recently as last September, could have continued to operate as a going concern “for at least 12 months”.
The decision to close Coughlan’s was announced by director Sean Coughlan via social media on Tuesday night. Key is that Coughlan’s is a voluntary liquidation, a choice made by Coughlan and fellow directors, including his sister, company secretary Virginia Coughlan, and Jacqueline Taylor.
All three are also co-directors of another company, Smitham Lodge Estates Ltd.
Coughlan’s, with its bakery in Thornton Heath, where the company was founded in 1937, has undergone significant and rapid expansion since the troubled years of covid, opening 12 new stores, and becoming a chain of 31 across south London, Surrey and Sussex, with 175 employees.
In the past couple of years, behind the scenes, Coughlan’s were busy seeking new investors, and conducting a bit of their own corporate engineering.
Emotional announcement: Sean Coughlan breaking the news about the closure. Staff were advised by text
In his emotionally fraught statement this week, Sean Coughlan blamed business rates, employers’ National Insurance contributions, fuel price hikes caused by the war on Iran, the recent heatwaves… indeed almost anything other than his own management of the business. Or businesses.
Some staff at Coughlan’s shops have been in touch with Inside Croydon to say that their bosses never advised them in advance of the closure, and that they only found out on Wednesday morning, via a text message.
“It would have been nice to hear Sean say sorry to all his staff,” said one.
“Unfortunately, we all woke up to no jobs and to be told by text.”
All of the reasons given by Sean Coughlan for the decision to close the business are no doubt valid – according to Coughlan, the company’s fuel bills have doubled in recent weeks. But as he said himself, as recently as March this year, business at the bakery had been very good. They’d been making a lot of bread.
There’s no suggestion of wrong-doing in the corporate changes, but the fuller picture as contained within Coughlan’s accounts suggest that the assumed victimhood of the directors is misplaced.
Coughlan’s own auditors said in the annual report last September, “We have not identified any material uncertainties relating to events or conditions that individually or collectively may cast significant doubt on the company’s ability to continue as a going concern for a period of at least 12 months.” The increase in employers’ National Insurance contributions had been announced in November 2024, so would have been factored into the accountants’ and management’s planning for some while.
Coughlan’s Bakeries Ltd’s latest annual accounts, for 2024-2025, were published by Companies House in February this year. They were agreed and signed off by the company directors.
Coughlan’s Bakeries had been losing money most years, even before covid.
Those latest annual accounts for the year to September 2025 showed turnover for Coughlan’s Bakeries Ltd had risen to £6.8million, while losses reduced from £229,600 in 2024 to £98,800.
Which is why the decisions taken in the boardroom over the past three years or so might give a clue to the way the directors have wanted to take their business. One thing seems clear: the directors won’t be going short of bread.
Where’s the money gone?: between 2023 and 2024, £2.87m in tangible assets was taken off Coughlan’s books. The directors deny that this money was paid in dividends
Smitham Lodge Estates Ltd was registered with Companies House in February 2023.
Since 2023, £5.7million-worth of property assets have been transferred from Coughlan’s Bakeries Ltd to Smitham Lodge.
An “investment property” owned by Coughlan’s Bakeries Ltd, valued at £400,000 in 2023, was also transferred to Smitham Lodge in 2024.
In 2023, the Coughlan’s Bakeries Ltd balance sheet also showed £3,476,436 as “tangible assets”. In 2024, that figure had been reduced to £607,929 – a reduction of £2,868,507.
According to an accountancy expert, that has the look of dividends being drawn down for shareholders, the directors. Coughlan’s, in a statement to this website, deny that the directors took any dividends, though they failed to explain what happened to the £2.87million.
It was in the autumn of 2024 that Coughlan’s brought on board a celebrity investor, comedian Romesh Raganathan, who professed his love for the bakers’ vegan dough.
Happy days: TV sleb Romesh Raganathan, here with Sean Coughlan, promoted the bakery after he bought £400,000-worth of shares in the company
The bakers quite liked the comic’s dough, too, as in two transactions, each of around £200,000, they sold to Ranganathan (through his production company, Vetty Ltd) enough shares to make him “a person of significant control” of the company.
Ranganathan has not responded to Inside Croydon’s request for comment.
He has been reported as saying he is “gutted” at the closure of Coughlan’s. He is probably a little bit upset, too, to discover his £400,000-worth of Coughlan’s shares have been rendered virtually worthless by his friend’s decision to seek voluntary liquidation. Romesh’s mum probably isn’t very happy about it, either.
Inside Croydon spoke to Sean Coughlan this week.
In our telephone interview, the businessman said that all the kind comments about his now closed company was no consolation to him.
We asked him about Smitham Lodge Estates Ltd. “I can’t talk about that,” Coughlan said.
We asked about the £2.87million taken out of the company in 2024, and the transfer of £5.7million property assets from Coughlan’s to Smitham Lodge. “That’s not what happened,” he said.
“But these transactions are shown in your Companies House records, in your company accounts. The accounts which you signed off,” we said to Coughlan.
He hung up.
Juggling act: the Smitham Lodge Estates balance sheet shows the transfer of Coughlan’s Bakeries property assets
In a statement issued to Inside Croydon from Virginia Coughlan, she claimed that there are “a number of inaccuracies and misunderstandings in your interpretation of the published accounts”, without actually stating what these might be, nor offering any alternative explanation for the £2.87million that vanished from their balance sheet.
“The separation of the property assets from the trading business was not something undertaken in anticipation of the current circumstances,” Virginia Coughlan wrote.
Closing up shop: one of the Coughlan’s baker shops, in Coulsdon, on Wednesday morning
“We first sought specialist advice on this in 2018 when exploring investment opportunities for the business. We were advised that potential investors were interested in the trading company but not in acquiring property assets, and that a demerger would make the business more attractive for investment.
“HMRC clearance for the proposed demerger was obtained in 2018, although the transaction was not completed until late 2023.
“Following the demerger, we entered into discussions with a prospective investor. After a lengthy process, we concluded that they were not the right long-term partner for the business.
“We were subsequently delighted when Romesh Ranganathan expressed an interest in investing, as we believed that represented a much better strategic fit.” Bet Romesh’s mum will be so proud that her son has finally become a “strategic fit”.
“Absolutely no dividends passed to the shareholders from Coughlan’s Bakery Ltd. Throughout this period the directors have continued to discharge their statutory duties and, prior to the current insolvency process, creditors and HMRC were paid as they fell due.
“We appreciate that the published accounts form part of the public record, but we do not accept the conclusions you have drawn from them.” In fact, no conclusions have been drawn. Questions have been asked of Coughlan’s in respect of their accounts, but no answers have been forthcoming.
“As the company is now entering a formal insolvency process, we do not intend to comment further on matters that will properly fall within the remit of the appointed liquidator.”
As previously noted: Coughlan’s Bakeries Ltd’s is a voluntary liquidation.
- Click here to see the latest annual accounts for Coughlan’s Bakeries Ltd (to Sep 2025)
- Click here to see the 2024-2025 accounts and financial statement for Smitham Lodge Estates Ltd
Read more: Croydon bakers firm Coughlan’s closes blaming Labour NI hike
*This report was updated on July 3 to correct the relationship between Sean and Virginia Coughlan to that of siblings. We apologise for any misunderstanding.
A D V E R T I S E M E N T
PAID ADS: To advertise your services or products to our 10,000 weekday visitors to the site, as featured on Google News Showcase, email us inside.croydon@btinternet.com for our unbeatable ad rates
- If you have a news story about life in or around Croydon, or want to publicise your residents’ association or business, or if you have a local event to promote, please email us with full details at inside.croydon@btinternet.com
- Our comments section on every report provides all readers with an immediate “right of reply” on all our content. Our comments policy can be read by clicking here
