Energy companies fall and the Rams head into administration – September news round up
The end of the furlough scheme means that employers have to bring staff back into the organisation on full pay and conditions otherwise they will have to consider redundancies.
The restrictions on winding up petitions are also being lifted but come with a £10,000 price tag initially until March 2022 so this might provide some flexibility from debts but they will just be postponed rather than disappear.
Cleveland Bridge, the storied constructors of the Tyne Bridge and the Sydney Harbour Bridge amongst others closed this month with the loss of 100 jobs after going into administration with debts totalling £21 million.
Despite a search for buyers, the decision was taken with administrators citing a number of factors leading to the company’s final collapse.
These included an £11 million estimation error on one project, delayed contracts, rise in steel prices, requirement for additional overtime work and a political coup in Sri Lanka where a major project was underway.
There was also a live case being investigated by the Health & Safety Executive and a live insurance claim.
Championship football club Derby County managed by Wayne Rooney went into administration and immediately took a nine point deduction leaving them bottom of the table on minus two points.
They are also facing additional financial irregularity charges from the Football League which could see another 12 points deducted.
The club blames a number of factors for their financial predicament including the failure of chairman Mel Morris to sell the club and the continuing impact of the Covid-19 pandemic on revenue streams.
A spokesperson for the club said: “Last week it became clear that the process which has been under way to identify a purchaser for the club likely would not be productive over the near term, despite negotiations with credible parties.”
The club is already under a transfer embargo so may not be able to bring in any new players when the transfer window reopens in January but could lose some as administrators look to reduce costs.
PFP Energy are the latest small energy supplier to go into administration this month as a crisis hits the UK industry with a sharp rise in wholesale gas prices affecting the market detrimentally.
The company had 50 employees and supplied energy to around 66,000 domestic customers and 25,000 non domestic users.
They are only the latest company to close their doors in this extraordinary month for energy suppliers.
They join Avro Energy, Green Energy, HUB Energy, MoneyPlus Energy, Midlothian Energy, Hiber Energy, Utility Point and People’s Energy that have left over a million customers looking for a new supplier.
Norfolk-based Plastech Moulding, who make plastic forks for supermarket snacks are making 15 out of 19 staff redundant after the government announced plans to ban single-use plastic items.
Managing Director Stephen Rundle confirmed that their main client had informed him that they were replacing plastic forks with wooden ones imported from China.
He said: “The effect on us is devastating. We have lost 100% of our business overnight and didn’t get any notice. The factory is standing idle and now 15 people are set to lose their jobs.”
Despite the forks being manufactured with biodegradable plastics and claimed to be a less environmentally damaging alternative to importing from China, it was not enough to sway their main client.
Warehousing, haulage and distribution company EVCL Chill which supplied Asda and Sainsburys has gone into administration.
Formerly known as NFT and based in Alfreton, Derbyshire, administrators have indicated that they will immediately begin marketing assets for sale to pay off creditors.
650 of the firm’s 1,000 staff have been transferred to key customers to fulfill orders but the roles of the rest have no immediate guarantees.
The business was owned by venture fund Emergevest and up to December 2020 had a turnover exceeding £167 million but administrators confirmed that a loss of key customers and acute driver shortages proved pivotal.
New investment and ownership was sought but with no realistic offers forthcoming the management decided to place the business into administration.
A spokesperson said: “This has been a very difficult situation for us? and as a business moves from survival mode to recovery, the financial climate is still very volatile. The sector is already facing many difficulties and challenges. We will continue to fully support all affected staff members during this difficult time.”
Another Derbyshire based haulage business, Sprintdeliver, went into administration blaming the impact of Covid-19 and the general shortage of HGV drivers in the UK.
A spokesperson said: “In recent months, the company had encountered significant financial challenges due both to the impact of the Covid-19 pandemic on trading and difficulties in attracting and retaining drivers.
“Haulage companies up and down the country are currently facing significant challenges regarding the acute shortage of drivers which in turn is resulting in increased wage costs and higher staff turnover.
The business had a fleet of 30 lorries and 30 trailers but as administrators found there was no prospect of resuming trading so the remaining 35 staff were made redundant.
Dutch bank ING are closing their consumer-facing smart money app Yolt leaving the future of their 61 UK employees in the balance.
The bank has decided to concentrate on their open banking services and proprietary technologies and platforms rather than apps.
Yolt’s chief executive Nicolas Weng Kan said: “We want to give financial control to as many people and businesses as possible, empowering them to make more informed choices to help them achieve better financial health, create opportunities and make it possible to fulfil their potential.
“Focusing on Yolt Technology Services is a faster and more effective way of driving change. I would like to reassure Yolt customers that any money held in their accounts or personal data is safe and we will be in contact when the decision is final.”
The app currently has 1.6 million users who will be taking a keen interest in what ING decides.
When Yolt launched in 2016 after the Competition and Market Authority allowed big banks to allow licensed start-ups to access their data which saw a plethora of similar platforms launched.
Anaylst now point out that five years later there would naturally be some exits from the space as competition from new apps and lenders have invigorated big lenders. The dawn of open banking gave them a wake-up call and many have improved their own apps and money tools in direct response.
Woodlands Leisure Centre
The Woodlands Leisures Centre in Norfolk has closed with 13 jobs lost.
Billy Wright, the centre’s owner, said: “This has been a very difficult decision to have to make, and not one that we have taken lightly.
“Our 30-year-old building needs major repairs and the running costs are just so incredibly high. With the additional loss due to Covid, the facility is no longer viable or sustainable. We regret that this means that staff at the centre will be made redundant.”
The company that owns the franchise to Marco Pierre White Steakhouse and Hotel Indigo in the prestigious Cube development in Birmingham has gone into administration.
Quadrant Catering Ltd also owns the franchise to Hotel Indigo in the same building. No other restaurants or hotels are affected by the decision.
A spokesperson said: “The decision to place the companies into administration was taken following the difficult trading conditions faced over the past year as a direct consequence of the Covid pandemic. For businesses in Birmingham, this was particularly difficult given the fact that the city itself remained in Tier 3 for an extended time period.”
Several other chef-branded restaurants in the city have closed recently including Tom Aiken’s Tom’s Kitchen at The Mailbox and Jamie’s Italian so they will be hoping this administration will be a turning point for the sector.
William Aston Hall
The operator of a popular music and events venue at Glyndwr University, Wrexham has ceased trading and gone into liquidation.
VMS Live (Wrexham) Ltd which operated events at the William Aston Hall venue said it had been an incredibly difficult 16 months for the events industry.
Acts due to perform at the venue in the coming months included Jimmy Carr, Jack Dee, Jason Manford, Scouting for Girls and The Charlatans.
A spokesperson for the University said: “We are deeply saddened that VMS LIve (Wrexham) Ltd have ceased trading as a result of the Covid-19 Pandemic.
“The company had total responsibility and control over all performances and ticket sales and the University fully appreciates that customers who have purchased tickets for future shows or those that have been postponed will be anxious about this news.
“We advise those who have purchased tickets to contact their ticket provider directly for any information regarding refunds. Unfortunately, as the landlord for the William Aston Hall, the university does not have access to these agencies and is not in a position to process any refunds as no ticket sales have been transacted through us.”
CS Wind (UK)
A wind tower solutions business based in Argyll, Scotland has filed for administration.
Founded in 2016, the company was the UK’s only factory producing on and offshore wind tower systems at the time but in recent years has been suffering as market conditions deteriorated resulting in a decline in contracts and revenue.
As a result, it began a managed wind down during 2020 and was effectively mothballed last Spring during the lockdown period. Despite their best efforts, the company was unable to secure new contracts and all staff have now either left or been made redundant.
With no prospects of any recovery in the market, directors decided to place the business into administration with administrators looking to market the assets for sale.
Genlec Electrical Contractors
Mechanical and Electrical contractors Genlec based in Lancashire have gone into administration with the loss of 18 positions.
The company worked in a variety of different sectors including retail, logistics and education for Morgan Sindall, its main client.
The business was experiencing financial difficulties due to Covid-19 which meant it was unable to meet its obligations to creditors. The administrators will now proceed with an orderly wind down of the company.
One of Britain’s oldest music retailers, Dawsons, has re-entered administration with the loss of 48 jobs and six locations leaving Chester as the only one remaining open physically to support the online presence.
The business went into administration in May 2020 but was sold to a new company which took on the management of the business. Sadly they were unable to return the business to profitable trading and administrators were brought in again in September.
A spokesperson said: “It’s been a really challenging period. The company had continued to experience tough trading conditions, exacerbated by the impact of Covid-19 on high street footfall, even following the easing of lockdown restrictions.
“Additionally, the company was also experiencing supply issues due to the global shortage of silicon chips and the challenges facing international freight and distribution channels.”
Dawsons Music was first established in 1898 and in addition to music retail, the company’s education division supplies music equipment to schools and colleges across the UK and internationally.
Two manufacturers with bases in Swansea announced their impending closures this month
Toyoda Gosei, which supplies body sealing components for major motor manufactures such as Toyota and Aston Martin is closing both its UK plants in Swansea and Rotherham putting 400 jobs in jeopardy.
The company said the decision was in response to continued changes in the global automotive sector, and a significant reduction in key UK customer demand.
Additionally, 3M will close their plant in the town with the loss of a further 89 positions.
The plant is the company’s oldest manufacturing facility outside of the USA and they said it is suffering from ongoing underutilisation impacted by changes in the markets it serves – the personal care industry, collision aftermarket and vehicle repair centres.
The closure campaigns for both facilities will begin in 2022.
This week doesn’t just see the end of September but also the final end of most of the Covid-19 support schemes established with the first lockdowns in 2020.
The furlough scheme finally closes on September 30th; CBILS and bounce back loan repayments continue to mount up along with increasing defaults and under certain specific conditions, the slight return of winding up petitions too.
Time is running out if your business is struggling to meet payments and obligations now.
You can still act now and see real change before the end of the year but only if you take the first step and get some professional advice first.
We offer a free, initial consultation to get a fuller understanding of what issues are the most pressing for your company. We can then work with you to draw up a timely plan for you to implement to help you prepare your business for the busy Christmas and New Year trading period.
Alternatively, if there is no realistic way forward for the business then we can advise on the easiest and most effective and efficient way to close and resolve outstanding debts and issues with creditors – this includes outstanding bounce back loans and VAT arrears too.
Whatever issues you’re facing – don’t face them alone any longer.