What are the main business stories you might have missed this month?
If the past two years from February 2020 have had a signature motif then that will surely be the one that most of us would agree with.
Just when we think we’ve turned the corner and are heading to brighter times ahead, there’s a pothole in the road causing us to stumble or a roadblock necessitating a longer journey to get to our eventual destination.
February 2022 has been no different.
Despite Covid-19 cases reducing and pandemic restrictions being lifted with more to be announced, three named storms hit the UK within a week keeping potential customers indoors once more.
But with March and Spring just around the corner, the sense that we might finally be moving beyond the Covid years is strong.
Holding on to that optimism is important but before we fully look ahead for the rest of 2022, let’s catch up on the other business and insolvency stories that have happened in February.
What administration, CVA and liquidation stories have you missed?
Get up to speed with all the months’ news right here!
Liberty Steel
As we reported earlier this month, Liberty Steel and three other businesses controlled by
GFG Alliance received winding up petitions from HMRC – despite limitations placed on the process during the pandemic.
They are still allowed to be served if certain conditions are met including the cumulative debt owed to creditors had to be £10,000 or over which in this case, have been met.
The court hearing is scheduled for March so there is still time for an agreement to be reached but HMRC is just the first high profile creditor to signify they are willing to use the threat of winding up a business this year rather than tolerate further repayment delays.
Whoop Energy and Xcel Power
Two more energy providers have ceased trading adding to the collapse of the smaller providers in the market.
Whoop Energy provided gas and electricity to 212 businesses and 50 domestic customers while XCel Power provided a gas only supply service to a further 274 companies.
Ofgem are handling moving customers to other suppliers with Neil Lawrence, retail director at Ofgem saying: “Our number one priority is to protect customers. We know this is a worrying time for many people and news of a supplier going out of business can be unsettling.”
Under regulations, customers’ energy supplies will continue uninterrupted while they are matched to a new provider. With the withdrawal of Whoop and XCel Power from the market, the total of energy suppliers ceasing to trade since September is now up to 28 with Bulb Energy entering a special administration supported by government funds.
Four million domestic and business customers have been affected by their supplier going out of business but this might not be the last time we write about problems in the energy market this year.
TFS Loans
Guarantor lender TFS loans went into administration in February.
The company was a guarantor lender which required a family member or friend to guarantee repayments if the original borrower couldn’t make the repayments.
A spokesperson said: “The main causes of the failure of the business are rooted in unaffordable lending.
“It has been necessary to place TFS into administration in order to protect the business and the interests of creditors. This does not change the terms of any loans that have been taken out with TFS Loans Limited and they should continue to be repaid.”
M&B Promotions
Concert promoters M&B Promotions who put on shows for artists such as UB40 and Jason Manford have gone into liquidation.
An official statement from the company said: “It is with a heavy heart and deep regret that we must announce the cancellation of all our scheduled events, and the end of operations for M&B Promotions Ltd and our ticket platform Simple Ticketing Ltd.
“We have successfully delivered hundreds of events all over the country since 2019 with our final programme of events taking place in December 2021.
“The decision is the result of the extreme logistical and financial setbacks caused by the pandemic.”
The arts and entertainment sector was one of the heaviest hit by the Covid-19 pandemic and waiting over two years for large groups of people to gather in indoor or outdoor venues was too much for some of them including M&B.
Regal Luxury Homes
A static caravan business in Hull was wound up by the High Court and placed into liquidation following an investigation and action by the Insolvency Service.
Regal Luxury Lodges Ltd was established in 2019 but was no longer trading by early 2020. Despite this, a director applied for a £50,000 bounce back loan which it was inelligible to receive as it wasn’t trading.
The loan was obtained and an Insolvency Service investigation began which also found that directors had failed in their statutory duties to maintain, preserve and deliver adequate accounting records along with evidence that the company bank account was being misused.
As a result, the High Court in Manchester agreed that closing down the company was in the public interest to prevent it being used as a vehicle for fraud.
Dave Hope, Chief Investigator at the Insolvency Service said: “Regal Luxury Lodges Limited took advantage of customers by misleading them into making payment for lodges which it was unable to deliver and compounded this by an egregious abuse of the Bounce Back Loan scheme to obtain a £50,000 loan at the taxpayer’s expense, after the company had already ceased trading.
“The Insolvency Service has acted swiftly to bring this company under the control of the Official Receiver to ensure that the conduct of the directors can be fully investigated.”
Ann Summers
A positive insolvency story to report.
Ann Summers, the adult themed retailer has finally returned to profit two years after entering a company voluntary arrangement (CVA) with their creditors.
During the pandemic their online sales doubled and revenues also doubled at its direct retail outlets.
Chief Executive Jacqueline Gold said: “I am delighted that Ann Summers has emerged after some very challenging years with a return to profitability in 2021.
“Everyone in the business has worked incredibly hard to deliver the turnaround and, while there remains much to do, I’m very grateful to every member of our team who has contributed to it.
“I’d also like to thank those landlords and suppliers who supported us through our CVA last year, which played an important part in helping us get back on track.”
Mulbury Homes
Cheshire based housebuilder Mulbury Homes has filed notice of intention to appoint administrators saying it is the victim of a “perfect storm” of supply chain problems and the impact of the Covid-19 pandemic.
Since being founded in 2010, the company has built over 2,000 houses and expanded into affordable homes, care and open-market residential divisions as well as Mulbury City in 2015.
The company currently has 1,089 homes under construction that will temporarily stop while the future of the business is settled.
A statement from the Mulbury directors said: “We had a strong pipeline of projects and we were hopeful for the future. However we have not been immune to the very challenging conditions facing the construction sector brought by the pandemic, planning delays, cost increases and supply chain issues.
“We have been working tirelessly to keep the business going but the current conditions left us with no option but to call in administrators.
“We would like to thank our staff, clients, supply chain and partners for their support to Mulbury Homes in the last 12 years.”
Studio Retail Group
Online retailers the Studio Group have filed notice to appoint administrators based on a downgrade of expected profits.
The company’s share price dropped by more than 35% following the announcement that pre-tax profits for the full financial year would not reach £28 million, and almost definitely not the current market expectation of £35 million.
The company issued a statement saying it had requested a short-term loan of £25 million from its lending banks to fund surplus stockholding which it believed “was sufficient to enable it to sell through the stock to customers.”
The statement added: “Following detailed discussions with our UK lenders, the company has not been able to reach agreement with them to provide the additional funding Studio requires. The board therefore now intends to file a notice of intention to appoint administrators to SRG and Studio Retail Limited, its wholly owned subsidiary, as soon as reasonably practicable.
“Following consultation with the FCA, the company has requested that the listing of the company’s ordinary shares of 10 pench each be temporarily suspended.”
The company said demand in the early weeks of January had been “relatively subdued, with some margin erosion as they cleared some seasonal stock that could not be carried forward.”
The business started life as a catalogue retailer focused on gifts but expanded online dramatically and now sells clothes, home and electrical products on flexible payment terms to approximately 2.5 million customers making £578.6 million in sales during the last financial year.
Corporate & Professional Pensions
Personal pension provider Corporate & Professional Pensions Limited has appointed administrators after it was unable to pay out on Financial Ombudsman Service complaints about high risk investments in its Sipps.
Existing pensions will continue to operate while a buyer is sought for the whole of the business.
Shabby
Bradford based online high end furniture retailer Shabby has gone into administration with the immediate loss of six positions.
Luxury Home Furniture Limited trading as Shabby ceased trading after suffering a slump in trade and related cash flow problems as a result of the pandemic and supply chain issues.
They supplied high-end sofas, tables, chairs, lighting and ornaments and recorded sales of £2 million in the last financial year.
A spokesperson said the business had expanded during the first lockdown but then became severely impacted by shipping delays, increased operating and import costs, the loss of its biggest UK supplier, adverse customer reaction to necessary price increases, creditor pressure and ultimately, falling sales.
“The directors tried to keep the business afloat but unfortunately this combination of factors had a devastating impact on its viability and they were ultimately unable to save it.
“The business has now ceased trading and we have been appointed administrators to find the best outcome for creditors.”
VM Fabrics
Leicester-based fabric wholesalers and importers VM Fabrics have gone into administration with the loss of 17 positions.
This follows the sad passing of its director in 2021 and the withdrawing of financial support and an invoice factoring facility.
A spokesperson said: “This withdrawal of support, combined with the company’s obligation to repay the significant sum due to the factoring company, adversely affected the company’s cash flow position.
“The administrators will be collecting outstanding debtors, selling any remaining chattel assets and ultimately maximising the return to creditors.”
Ye Olde Fighting Cocks
A St Albans pub claiming to be the oldest pub in England has closed its doors and gone into administration.
A plaque outside Ye Olde Fighting Cocks says an inn has been at the site since 793AD and ends 1,229 years of continual service due to the coronavirus pandemic.
Landlord Christo Tofalli said: “After a sustained period of extremely challenging trading conditions, it is with great sadness that we have to announce that YORF Ltd has gone into administration.
“Along with my team, I have tried everything to keep the pub going. However, the past two years have been unprecedented for the hospitality industry, and have defeated all of us who have been trying our hardest to ensure this multi-award-winning pub could continue trading into the future.
“Before the pandemic hit, the escalating business rates and taxations we were managing meant trading conditions were extremely tough, but we were able to survive and were following an exciting five-year plan and were hopeful for the future.
“However the pandemic was devastating and our already tight profit margins gave us no safety net. This resulted in us being unable to meet our financial obligations as they were due, creating periods of uncertainty and stress for all who worked for, and with, the pub.
“It goes without saying I’m heartbroken: this pub has been so much more than just a business to me, and I feel honoured to have played even a small part in its history.”
Covid restrictions have forced pubs throughout the country to close for long periods and Christmas trading was greatly affected in 2021 by the Government’s Plan B measures, which discouraged mass gatherings as the Omnicron variant swept through the UK.
Nightflix
A drive-in cinema business running sites in Colchester, Newark and Milton Keynes has gone into liquidation.
Nightflix made the decision after planning permission for a permanent pop-up cinema on the site of a former supermarket was refused.
That and the ongoing effects of the pandemic led to the decision. A spokesperson said: “It is disappointing that Nightflix has closed down.
“The business suffered severely during the pandemic and subsequent lockdowns and was hampered in particular by the delay of new film releases such as James Bond.
However in Colchester the local Whitehill & Bordon Regeneration Company has now taken on the assets of the business and will be relaunching the cinema within the next couple of months.”
Holt Cars
Derby-based new and used car retailer Holt Cars has gone into administration with the loss of 17 positions.
The business was an approved franchise trader of Mitsubishi vehicles for 20 years but had experienced poor financial health through the pandemic.
The business closed to the public during the pandemic but remained open for click and collect purchases but the reduction in footfall led to a downturn in trade. This was compounded by the withdrawal of UK Mitsubishi sales which resulted in a significantly lower number of new cars being made available for sale than forecast.
This is indicative of the general state of the UK automotive market with new car sales in 2021 only 1% higher than the previous year and still remaining 28.7% lower than pre-Covid levels.
H Beardsley Logistics
The 90-year-old Nottinghamshire based logistics company H Beardsley has gone into administration with 32 positions being made redundant.
A spokesperson said: “Due to a combination of increased fuel and property costs and staff retention challenges, the directors took the difficult decision to cease trading.
“It’s disappointing to see the closure of such a long-established business in the Nottinghamshire area. This situation demonstrates that, whilst there are new opportunities in the transport and warehousing sector, significant challenges remain due to increasing running costs and staff shortages.”
If you’re a business owner or director of a company that hasn’t quite hit the ground running in 2021 then don’t worry.
You still have time to make the necessary decisions and changes you need to to make 2022 a real year of recovery but you have to take the opportunity while it presents itself.
Our free consultation with an experienced advisor is ready for you to book at a convenient time whenever you want to discuss how to help your business in more detail.
Once they’re able to see the bigger picture then they can let you know what options you have available – often more than you might consider open to you.
But the longer you wait to act, the less room to manoeuvre you’ll have so if you value your autonomy and choice – get in touch today to work on a better tomorrow.