Lights go out at more energy companies & other October insolvency news
The budget may or may not have bought your business some better news last week depending on your sector and situation but even if it didn’t there’s so much going on anyway you’d be forgiven for not noticing.
A lot is happening and did happen in October so before we finally turn the page on the month – here’s our regular monthly round up of all the business, insolvency, administration and CVA news and stories you might have missed this.
GOTO Energy and others
Goto Energy has become the latest in a line of gas and electricity suppliers to close as the sector struggles to cope with record high gas prices.
The wholesale gas price has risen 250% this year alone due to low storage levels after a cold winter in Europe last year, increased energy demand from Asia and low wind speeds affecting the output of renewable energy supplies.
Set up in 2019, the Kent-based renewable energy supplier is the 16th to go out of business this year leaving 22,000 customers waiting for Ofgem to appoint a new supplier. Most of the businesses could not absorb the costs and could not wholly pass them onto customers.
This month has also seen BP-backed renewable firm Pure Planet, Daligas, Colorado Energy, Igloo Energy, Enstroga and Symbio Energy cease trading resulting in the displacement of over a quarter of a million customers.
Ofgem offers a supplier of last resort scheme ensuring that there will be no interruption to gas or electricity supply but customers should take a meter reading so they are ready when a new supplier gets in touch.
CNG Group Gas
Businesses are also likely to be affected by the surge in energy bills this winter with one example being the closure of the CNG Group.
The Yorkshire-based wholesale company sells gas to 40,000 small and medium sized businesses and 15 small energy suppliers but has announced that it is withdrawing from the market.
Unlike consumers, businesses do not have an equivalent price cap on their energy bills leaving many of them exposed to rising prices that could increase their cost by up to four times as much.
CEO Paul Stanley wrote to customers to say the past few weeks had been “unprecedented” for energy markets and that the company had been hit hard by customer bankruptcies leaving it with unpaid bills for gas shipments.
While the government hopes that CNG’s decision is a one-off, analysts fear that this could spark a domino effect among other suppliers which could remove even more providers from the domestic and commercial market.
Gieves and Hawkes
The Chinese parent company of 250-year-old Savile Row tailor Gieves & Hawkes has defaulted on debts meaning the storied brand along with others such as Kent & Curwen could face liquidation from this week.
Trinity Limited which is owned by Shandong Ruyi Technology Group was served with a winding up order by creditors who will vote on November 4th for their preferred option which could include a sale or other insolvency solution.
Other brands owned by the company which could also be affected include Aquascutum, Cerruti and SMCP.
URBN and Create Construction companies crumble
Create construction based in Blackpool called in administrators after facing a “very challenging trading period” in October.
A spokesperson said that the directors had exhausted other options and “the pandemic has severely affected both our clients and our supply chain’s ability to meet their contractual arrangements.
“An overrun in projects in both time and cost, a number of supply chain failures and delays to a secured pipeline of projects, has ultimately made the company unviable.
“Having set the business up in 2006, we have worked hard to build our reputation in a competitive sector and we are proud of the fabulous schemes that we have delivered over the years.
“The construction industry continues to be hit hard as a result of the pandemic, with significant rising costs and limited resources available. As a consequence, we have seen the failure of some reputable and established companies like ourselves.”
Other casualties in a sector that has seen several high profile names fall include Bardsley, NMCN, CPUK and Cruden Construction. Artez’s construction business also entered voluntary liquidation earlier this month.
They were joined by URBN construction based in Plymouth becoming two of more than 1,600 building and construction companies who have closed their doors since the start of the Covid-19 pandemic in March 2020 – more than any other sector including retail and hospitality.
When one company fails it can be a tragedy but when several more are affected in the fallout then it can quickly become a calamity – especially if they’re a main client or a large part of a company’s income depends on them.
Ash Residential Property Management (ARPM) was a residential outsourcing company that ceased trading in October after getting into financial difficulties.
Its collapse will affect over 8,000 properties and landlords including 70 estate agencies who used their services to manage their buildings.
A meeting with creditors was held and it was announced that ARMP would now be wound up via a liquidation process.
Luxury fashion brand Roland Mouret has announced its intention to appoint an administrator noting that the pandemic has destroyed demand for designer dresses.
Company investors including the Grosvenor Estate who took a minority stake after setting up a fund to help its retail tenants weather the pandemic have been looking for ways to raise new funding and keep the business solvent but will use the period of administration to buy more time to find a buyer or new investment before considering other options.
According to the latest accounts available from Companies House in 2019 the business had just under £1 million in profit based on sales of £16 million which shows how the pandemic decimated demand in the fashion industry.
Achievement for all
School improvement charity Achievement For All, which helped over 30,000 children across 1,879 in England and Wales in the past year alone, has gone into administration.
Dr Kulvarn Atwal, chair of the organisation wrote to staff to announce the news this week blaming the “double impact of the pandemic and current pressures on school budgets.”
He said that following financial advice the board had taken the very difficult decision to cease trading with immediate effect and enter formal administration.
“Throughout the pandemic, the staff have worked tirelessly to attract new funding and to create new opportunities for schools and settings.”
The Kidderminster based furniture company which before the pandemic was making 2,500 pieces of furniture a week, has gone into administration.
This raises uncertainty for the future of their 160 employees and suppliers who stock their products in stores and online.
Virgin Money announced that it would close 31 branches in Scotland and the North of England with the loss of 112 positions blaming the accelerated shift to online and mobile based banking caused by the pandemic.
This joins other brands such as HSBC, TSB and the Co-operative Bank who have all embarked on branch closure programs in the previous year.
The latest closures account for 20% of Virgin Money’s branch network reducing the footprint to 131, down from 245 in 2018.
Fergus Murphy, Virgin Money’s group customer experience director, said: “As our customers change the way they want to bank with us and conduct fewer transactions in-store, we must continue to evolve the role of our stores into places where we showcase our products and bring our digital services to life.”
With less than two months of 2021 remaining, it seems counterintuitive to say that it’s the ideal time for businesses to make the changes they need to survive and then thrive.
This is because one they get some impartial, professional advice – they can implement it immediately and some will start to see some changes straight away.
While others will take longer, the act of getting advice and acting on it is the first essential step of any successful recovery strategy.
We offer a free, initial consultation for business owners and directors with one of our advisors to get a full picture of their situation.
Once they understand what the most pressing issues are, they can then work with them to draw up a plan before the busy Christmas and New Year trading period really gets underway.
Alternatively, if there’s no realistic way the business can be viable again then they can explore the easiest and most stress free ways to close and deal with any subsequent creditors which can include bounce back loan borrowing and tax arrears too.
No matter what obstacles a business faces – we can help overcome them but only if they get in touch with us and soon.