Contract caterer Graysons has said the purchase of Duchy Catering will see it move into profit for the first time by the year-end.
Graysons, set up last year with backing from ex-Compass chairman Sir Francis Mackay, bought Duchy in January this year for £212,000 via a pre-pack administration.
The caterer is now in the process of integrating Duchy into its business, including the supply chain, and said the acquired firm's problems had been caused by cash-flow issues.
Rowena Edwards, chief executive of Graysons Restaurants, told Caterersearch: "This is a fundamentally strong business that was short of working capital.
"There are no loss-making contracts at Duchy but the loyalty and support from staff and clients since we took over has been outstanding."
Graysons had four contracts before picking up Duchy, which has swelled its business to around 70 contracts and an annual turnover of £16m.
Earlier this month Graysons appointed ex-Compass man Mike Bond to head up its newly formed independent schools business Graysons Education.
The Duchy name is being retained for state schools and will continue to operate at existing Duchy business and industry contracts. Long-term, business and industry will likely be unified under the single Graysons Restaurants brand.
Graysons has also parted company with David Cheeseman, who joined last year, to head up its leisure division Graysons Hospitality. Describing the split as amicable, Edwards said due to the recession Graysons no longer planned to launch a dedicated leisure division but would consider leisure contracts on a case-by-case basis.
By Chris Druce
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