June insolvency news round up – the closer to the finish, the further away it seems
For what started with great fanfare June is turning out to be something of a damp squib for businesses.
The remaining coronavirus restrictions were due to be lifted on June 21st but it quickly became apparent in the days and weeks beforehand that not only was this not going to happen but that the next earliest reopening date will be another month away.
The ongoing uncertainty coupled with the effects of restrictions and changes to life, work and industry still rippling through the country after 18 months of the pandemic means that it was the end of the line for some companies.
For others they might have used insolvency procedures like a CVA or an insolvency moratorium to buy some time or begin to rebuild their businesses.
Whatever they decided – you can find out about it here.
Oxford University Press
A piece of world literary history is coming to an end as Oxford University Press, the publishing arm of Oxford University who published their first works in 1586, is closing its physical printing operation Oxuniprint.
20 jobs will be lost in a move caused by “a continued decline in sales which has been exacerbated by factors relating to the pandemic.”
A spokesperson said: “This decision follows a recent business review of our operations. This has not been an easy decision for us, and we thank the team for the support and dedication to OUP, and their clients, over the years.”
Lloyds Bank and Halifax
Lloyds Banking Group which owns the Lloyds Bank and Halifax brands has announced they will be closing an additional 44 branches across England and Wales this year.
29 of the branches are Lloyds and 15 are Halifax sites and will permanently close between September and November. This brings the total number of branch closures announced and will be completed in 2021 to 100.
Vim Maru, Lloyds retail director, said: “Of the closures announced, over a third are branches situated in or around cities and large towns, with another branch very close by.
“Our digital banking customer base has grown by over 4 million in five years to almost 18 million. This means that, like many businesses on the high street, we must change for a future where branches will be used in a different way, and visited less often.”
Lloyds confirmed that all branch transactions had dropped by at least 10% a year in the five years to March 2020 and significantly further in the year of lockdowns since.
According to research from consumer group Which?, there have been 4,299 bank and building society closures since January 2015 which is the equivalent rate of 50 per month.
Irish regional airline Stobart Air announced it was going into liquidation this month with the immediate closure of the service.
A spokesperson said: “It is with great regret and sadness that the board is in the process of appointing a liquidator to the business and the airline is to cease operations with immediate effect.
“This unavoidable and difficult decision means that all Aer Lingus Regional routes, currently operated by Stobart Air under its franchise agreement with Aer Lingus, have been cancelled.
“Last April, Stobart Air announced that a new owner had been identified. However, it has emerged that the funding to support the transaction is no longer in place and the new owner is unable to conclude the transaction.
“Given the continued impact of the pandemic, which has virtually halted air travel since March 2019 and in the absence of any alternative purchasers or sources of funding, the board of Stobart Air must take the necessary, unavoidable and difficult decision to seek to appoint a liquidator.
“A franchise flying partner to leading domestic and international airlines, Stobart Air has acknowledged the significant contribution, loyalty and dedication of its 480 strong team of skilled and talented aviation professionals.”
Stobart Air operated a number of regional routes including from Belfast to Edinburgh, Exeter, East Midlands, Leeds, Birmingham and Manchester airports and flights to Dublin too.
Concrete manufacturer Bison is closing its Swadlincote factory on the Leicestershire/Derbyshire border as a result of a drop in demand caused by the coronavirus pandemic.
The businesses hollowcare flooring division at the same site was closed last year so the full closure will see the loss of 200 jobs.
A spokesperson said: “Over the last year there have been changes in demand for certain construction products.
“The Covid-19 pandemic served to compound an already challenging situation for our bespoke precast concrete products division. The operation had struggled to make a profit for a number of years and following the completion of the Leicester prison project, no further opportunities were secured.
“When the high site overheads are also taken into consideration, regrettably it means that this facility is no longer sustainable. The only option that could enable profitability is to permanently close Swadlincote and consolidate our offering into another site.”
One of the oldest private schools in the UK will close after becoming insolvent.
Ockbrook school in Derbyshire was first founded in 1799 and will shut its doors for the final time on Friday 9th July.
The school wrote to parents to say “It is with great sadness that we are informing you of our decision to close Ockbrook School.
“At the start of the pandemic, we launched a detailed strategic review of the school to identify the best way forward in these challenging times and ensure the long-term viability of Ockbrook School.
“Following the consideration of a number of options, it has become clear that the school is significantly loss-making, a situation exacerbated by the pandemic, and we have not been able to find any backers to take on the scale of those losses.
“As a result, the school has become insolvent and we have no choice but to close at the end of the 2021 Summer Term. The decision was not taken lightly but we have unfortunately exhausted all alternative options and keeping the school operating is simply not viable anymore.
The school was a coeducational day and boarding school for children from three to 18 years old who will have to move to other schools in time for the new school years starting in September.
Administrators have been appointed at AF Biomass, a straw merchant who supplied the product for energy, food and farming across the UK.
A spokesperson for the business said: “AF Biomass had no realistic prospect of being able to meet its contractual obligations to supply straw to the power stations and the market had changed dramatically since the company was established in 2013 as a wholly-owned subsidiary of the AF group – a farmer owned co-operative.
“In these circumstances, the directors have been advised that AF Biomass is insolvent and cannot continue to trade. It has therefore been decided to appoint administrators.
A care business providing home visits for elderly and vulnerable people in York and Selby has ceased trading and gone into liquidation.
Riccall Carers provided personal care home visits for 180 residents in the area for private funded clients as well as council funded clients since 1998.
Director Helen Thompson said: “It is very sad for us to see the end of the business which my parents started 23 years ago.
“While we have contracted over recent years, we remain one of the larger providers in the York and Selby areas. Unfortunately, the growing demand for our services has coincided with ongoing challenges over staffing with further disruption caused as a result of the Covid outbreak.
“It has been difficult to retain team spirit and integrate new staff during the series of lockdowns since March 2020. Following extended periods of remote working, we have simply been unable to recover as a cohesive team and keep up with the pace of change required of us.”
Due to the ongoing challenges facing the sector, particularly around staffing and the pandemic, the directors felt they had no choice but to put the business into liquidation.
Being involved in a cutting edge industry is no guarantee of success or solvency.
Lithium-sulphur battery developer Oxis Energy have appointed administrators to wind up the business after failing to secure the essential funding needed to continue their research and development.
60 members of staff have been made redundant as the firm’s specialist testing equipment and approx. 200 patents are being marketed for sale along with their physical testing centre and R&D facility.
The company blamed Covid-19 for the halt in operations and were looking to expand before the trading conditions proved insurmountable.
London-based outdoor food hall operator Market Halls has launched a company voluntary arrangement (CVA) proposal to secure the future of its three locations in the capital – in Victoria, Fulham and the West End.
None of them have been able to reopen since the first pandemic lockdown in March 2020 and the CVA is being pursued to allow the business to financially restructure itself so it can reopen in a stronger position.
Founder and chief executive Andy Lewis-Pratt said: “The past 14 months have been the most challenging of my career.
“Prior to the pandemic, we were fast-growing and had exciting plans for our business. But with prolonged restrictions forcing us to close our doors indefinitely, the future of Market Halls is now at real risk.
“We’ve been working incredibly hard to find a way through, and after much consideration, it’s our firm belief that these CVA proposals represent the best means possible of giving us the flexibility we need to secure our future.”
Civil engineering firm Vital Infrastructure Asset Management (VIAM) based in Liverpool and employing 300 staff has gone into administration.
Administrators confirm that its trading performance was impacted by disputes with certain customers leading to receipts being withheld. This has led to severe liquidity pressure and ultimately the circumstances have required this decision.
A spokesperson said: “This is unfortunately a very challenging period for the group’s stakeholders, and in particular its employees. Despite the best efforts of the directors, the group was unable to generate the cash needed to sustain its trading operations.
“Our immediate focus is on supporting the group’s employees to ensure all relevant claims are submitted as promptly as possible.”
We’re in the middle of the year and you’d be forgiven that things are becalmed and in a holding pattern right now.
Nothing seems to be moving forward with any certainty and if you’re a business owner or director, this can be the worst thing for your company.
If you can’t make any concrete plans or move forward with decisions you’ve already taken – then where does that leave you?
Why not get in touch with us before you spend another moment worrying.
We offer a free initial consultation so you can explain what you’d like to do with your business and what issues are stopping you.
Then we can work together on a realistic and effective roadmap that will put the plans into place.