What were the main interesting stories this month?
While the cost of living crisis is playing out and the long expected rise in corporate insolvencies finally arrived – it can be hard to keep up with all the other business and insolvency news that happened this month and what other administration, CVA and liquidation stories you have missed this month.
Don’t worry – we’ve got you covered with this monthly summary!
Gibson Direct
Scottish coach operator Gibson Direct which had a fleet of 50 vehicles and regular school transport and football supporters clubs’ contracts has been placed into liquidation.
The coronavirus lockdown restrictions proved too much for the Renfrewshire company as these two main income streams were decimated by the restrictions and their wedding and executive coach hire also struggled during lockdown.
25 positions have been lost as a result.
A spokesperson said: “Unfortunately, like many other sectors, transport services have suffered from the impact of Covid, with multiple lockdowns resulting in businesses facing periods without revenue.
“In particular, Gibson Direct was severely affected by the repeated withdrawal of school bus services over the last two years as remote learning for children was implemented and this proved to be too heavy a burden for the business to bear.
Pipeline Engineering and Supply
Catterick based pipeline specialists have gone into administration and ceased trading with immediate effect with the loss of 83 positions.
The company is a UK subsidiary of Circor International Inc, a group listed on the New York Stock Exchange and had operated for over 50 years in the design, manufacture and testing of pipelines.
The parent group had recently reported accounting irregularities in financial statements which led to a further strategic review of the business including a sale process for the company and its assets but no buyer was ultimately forthcoming.
A spokesperson for the group said: “Pipeline engineering and supply was loss making, as its cost base and infrastructure weren’t aligned to revenues.
“The Group has made substantial investment into the company but together with the current economic uncertainty and cost inflation in manufacturing The Group was unfortunately unable to continue to provide financial support.
All Foundations (UK) undergoes pre pack administration for second time
The Nottingham based piling firm that bought out the assets of collapsed piling specialist All Foundations (UK) has itself gone into administration and been pre-packed.
The initial All Foundations (UK) was first placed into administration in August 2021 blaming covid disruption for the move. It was sold for £180,000 in a pre-pack deal to a business called Founda run by two former directors of the company.
Now Founda itself has gone into pre-pack administration with debts still owed to the previous incarnation of the business and a £43,000 bounce back loan. It has been bought by Liverpool based Carpenter Build which is an unconnected third party in this sale.
Energy Helpline
20-year-old energy price comparison website Energy Helpline has followed the 31 other UK energy companies into administration.
The business provided a free energy switching service to help customers find the best gas and electricity deal for their needs but as energy companies started to withdraw their cheapest tariffs in September last year, the only reasonable advice from consumer experts was to advise households to stop switching.
As a result, many other major comparison sites were forced to halt their own energy switching services as a direct result with Energy Helpline being the latest casualty.
Fundraising Innovations Ltd trading as Energy Helpline appointed administrators on April 1 to secure the future of the business and the 145 employees who remain employed.
Twinwood’s Bodyflight
Bodyflight Ltd at Twinwoods Adventure near Bedford has ceased trading with all staff being made redundant as a result.
A spokesperson said: “There were various options available to the company to explore; however, due to circumstances beyond its control, the rescue option was no longer viable and a board meeting was held at which the director took the difficult decision to cease trading.
“We appreciate the depth of feeling regarding a business ingrained within the local community that formed some 18 years ago offering a wide range of activities for local families.
“We have endeavoured to make customers and members aware of the situation as soon as possible and anticipate the company will be liquidated early next month.”
Haiko Cycling
A popular bike servicing and repair company in Portishead has gone into liquidation and stopped trading immediately.
Haiko Cycling, formerly known as Mike’s Bikes announced that due to excessive liabilities which it couldn’t meet, the business could not continue and it was advisable to wind up the company voluntarily.
The company had released a range of custom cycling clothing in January and was the principal sponsor for FTP Racing’s Women’s Team for 2022. They had also been planning a move to another location last month but a spokesperson said: “It is with deep regret and sadness to announce that due to unfortunate and unforeseen circumstances Haiko Cycling has ceased trading.
“It has been our great privilege to serve our community for the last 10 years, we’ve got to know so many of you and will remember your kind words and boundless support forever.”
PerfectHome
Temple Finance Limited trading as rent to home retailer PerfectHome has entered administration this month.
Their model was to loan money to customers so they could buy household furniture and goods as well as offering cash loans to its 17,000 customers.
The Financial Conduct Authority which regulates the business confirmed that all existing credit agreements remain in place so customers should continue to keep up repayments on their goods.
A spokesperson for the company said: “PerfectHome has been in a controlled wind down guided by management since June 2021. Despite the administration appointment, customers will continue to receive the same level of service as they have throughout the wind down and should not notice any changes as a result of the administration.”
Sungard
Sungard Availability Services UK, the British arm of the international data management operator, have gone into administration partly due to soaring energy costs but also after reaching an impasse with landlords over rents.
Sungard employs nearly 300 staff providing cloud based services and physical data centres which saw a reduction in demand due to the pandemic. Despite ongoing negotiations, landlords refused to agree to rent cuts which prompted the directors decision to act.
A spokesperson for the company said: “Rising power costs and the impact of Covid on our Work Area Recovery business had made many sites unprofitable and the company has been unable to pass rising costs through to customers resulting in a near term funding issue.
“Despite the board’s best efforts to engage with key landlords and customers to seek a consensual restructuring, these discussions have not been productive.
“The board therefore concluded that without the requisite support, there was no viable turnaround plan available and that they should file for administration.
“A limited amount of funding from the Group’s ultimate shareholder should ensure that any impact for customers is kept to an absolute minimum in the initial period of the administration and will provide a platform to advance the company’s discussions with landlords, to optimise cost and space and pass through increased power costs.
“The ability for the business to continue to trade in the medium to long term, either to enable a rescue of the business as a going concern or to deliver individual asset sales will be reliant upon burden sharing from both customers and landlords alike. We will continue to work with stakeholders to further consider the ability of the company to continue to trade on a day to day basis.”
YM Group
Printing parent company YM Group which owned printers such as Pindar in Scarborough, YM Chantry Lane in Wakefield and York Mailing Ltd has gone into administration with the immediate closure of all branches and the loss of nearly 500 positions.
Pindar dated back to 1836 and was one of Scarborough’s best known companies and was bought out of administration by the current owners in 2011.
Administrators were unable to secure a buyer through a marketing process and concluded that they do not have the prospect of selling or attracting new investment.
A spokesperson said: “This has been an incredibly challenging period for the printing sector that has been exacerbated by the impact of the pandemic and rising prices. As a result, York Mailing, YM Chantry and Pindar are no longer able to continue trading.
“Regrettably, the insolvency has led to redundancies at what we know will be an extremely difficult time. We will work with staff to access redundancy support.”
The Sofa Workshop
Administrators have been appointed at a mid-market upholstery retailer The Sofa Workshop, with more than 75 jobs lost across their stores located in Manchester, London, Nottingham, Bristol and 11 other locations across the UK.
The business had achieved strong revenues but these had been outweighed by trading losses, Covid related supply chain disruption and significant increases in transportation costs on importing goods from Asia into the UK.
Consequently, the business has been unable to meet payments as they fall due and has remained reliant on the support of its main shareholder. Given the cash flow position of the business, potential sale options were explored with the aim of a purchaser providing the funding required to continue to implement the business plan and take the company forward however, no viable offers were received.
A spokesperson said: “Unfortunately, given the sustained level of losses, the directors had no option but to appoint administrators to protect the creditors of the company.
“Sadly, this has resulted in 77 redundancies along with the closure of the company’s 15 stores and website with no further orders being taken although as the company’s order book has been sold all outstanding orders will be fulfilled.”
Warrens Bakery CVA success story
A bakery that underwent a CVA process has returned to profit in its latest business accounts. In the full year to 30 June 2021, Warrens Bakery showed an operating profit of £471,000 – up from a £2.7 million loss in the previous year.
Turnover had reduced from £12.8 million to £9.6 million but this was due to the closure of 18 loss making shops as well as the closure of loss making production facilities.
A spokesperson for the company said: “Given the pandemic’s impact on the business and the restrictions to trade, further action was taken to negate the shortfall in trade over the traditionally buoyant Summer 2020 period. This included a series of cost saving measures as well as the company seeking variations of the Company Voluntary Arrangement which was approved by creditors in July 2020.
The CVA was first agreed in December 2019 with a major restructure following this with further payments to creditors made until this month when a final dividend payment is expected to be made after which the CVA will be discharged.
Premier Protect 365
Premier Protect Holdings Ltd trading as Premier Protect 365 was wound up in the High Court in the public interest in a case brought by the Insolvency Service this month and the Official Receiver appointed as liquidator of the company.
According to the Insolvency Service report, Premier Protect often targeted elderly or vulnerable customers using cold calling to sell service plans for white goods and TVs and to pressurise customers into renewing non-existing service plans.
They then found it impossible to contact the company to arrange a refund and in some cases the business actually took money from individuals without their consent.
Investigators were unable to determine the total number of customers affected nor the final address. The judge agreed that closing down the company was in the public interest.
Lynda Copson, Chief Investigator, said: “Premier Protect targeted vulnerable people and caused significant financial and emotional distress. We have acted to ensure this appaling company has been shut down.
With the number of corporate insolvencies finally beginning to rise greatly, now would be the ideal time to make sure that your business is robust enough to withstand any sudden downturn in its fortunes.
And if troubles are already at your doorstep then it’s a great opportunity to make changes that could rescue or restructure your business sufficiently to turn things around before they become insurmountable.
Our free consultation for business owners and directors is the ideal first place to start.
Once our advisors have a clearer picture of your business’s unique situation then they can provide a tailored range of possible solutions for you to consider and choose depending on your goals and objectives.
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