What other business stories happened last month?
On November 21st, the only people who had heard of Omicron were those with a grasp of ancient history or even Latin.
Now the news, like the dominant Covid-19 variant itself, appears to be everywhere and multiplying.
As we write, the Chancellor has announced some support for companies in the leisure and hospitality sectors that appear to be administered through grants at local authority level but will become clearer in the next few days leading up to Christmas.
Which ironically should have been some of the busiest trading days of the year but due to a range of circumstances and events you’ve heard about, means that any support forthcoming will be welcomed.
But before we consider the future implications of today’s decisions and what January and the rest of 2022 might hold, we’re going to recap on the other business and insolvency stories that have happened in December.
Who has gone into administration? Which businesses have entered liquidation and who has been able to successfully restructure their debts with a CVA instead?
Read on to find out.
Is a CVA the perfect way to reboot your business in 2022?
Arena Television
One of the largest outside broadcast operators in the UK that filmed Euro 2020, Wimbledon and the Glastonbury Festival for ITV, Sky TV and the BBC went into insolvency earlier this month with the loss of 100 positions.
The business had taken out bounce back loans and other pandemic finance during the past 18 months and investigations are ongoing into allegations of fraud and staff working for the business while being furloughed. Debts are understood to be around £300 million from a range of asset-based lenders as well as other sources.
A spokesperson for the British Business Bank said: “We are currently investigating facilities granted to Arena through accredited lenders using the bank’s schemes, and expect lenders to work with the company’s administrators on recoveries.”
Social Energy Supply
Dual fuel energy renewable energy supplier Social Energy Supply which supplied 5,500 customers in Gloucester has gone into administration.
Like many others in the sector the company experienced significant financial challenges as a result of the recent material increases in wholesale gas prices. Ofgem is transferring customers to new suppliers.
A spokesperson said: “Social Energy Supply was founded on the principles of delivering 100 per cent renewable energy to customers while making bills more affordable.
“Regrettably however, the recent issues affecting the wider energy sector meant that the business was not able to secure sufficient funding to enable trading to continue.
The company was part of the wider Social Energy Group which supplies domestic, commercial and social housing customers with solar panels and battery storage and continues to trade. All staff have transferred to this group and remain employed.
Orbit Energy and Entice Energy
Two other energy suppliers have also closed this month. Orbit which supplied 65,000 customers and Entice which had 5,400.
Ofgem have already transferred their customers to Scottish Power but the total number of UK suppliers which have failed this year is now 24 covering almost 4 million customers.
A spokesperson for Orbit Energy blamed its collapse on the government’s energy price cap, which was designed to protect customers on standard variable tariffs from large or unfair energy bills.
They said: “Orbit was a well-run energy supplier that had always taken a prudent approach to buying energy from the wholesale energy markets so we could offer the best price possible. Sadly, the UK government and our regulator Ofgem expect us to sell energy at a price far lower than the cost to buy – which makes operating unsustainable.”
Both Orbit and Entice were warned by Ofgem last month that they could lose their supplier licences if they failed to pay back the money collected from their customer energy bills, which was earmarked to support small-scale renewable energy schemes such as rooftop solar installations.
Orbit owed over £450,000 from its customer energy bills to support the government’s feed-in tariff scheme while Entice owed the regulator £28,353 to help support small-scale renewables.
InfraRed
The owners of the Eastgate shopping centre in Basildon have gone into administration.
A spokesperson for InfraRed UK said that it was business as usual as the shopping centre, car park and shops remained open and continued to trade.
“The challenges to UK retail are well known and have been further accentuated by the impact of Covid-19 and the resulting national lockdowns which have ultimately driven the decision.”
InfraRed bought the shopping centre from British Land in 2014 for £88.6 million and was described at the time as a dominant town centre asset. Since then several high profile brands had abandoned the centre for various reasons including Debenhams, Next, Topshop, Build-A-Bear and H&M.
J&J Ashcroft
Lancashire stone and aggregate suppliers and hauliers J&J Ashcroft went into administration earlier this month.
Formed in 1935, the family business had hoped to sell the company as a going concern due to current directors having significant health issues but recent issues including the ongoing challenge of Covid-19 and problems recruiting sufficient HGV drivers combined to force the directors ultimate administration decision.
The business has ceased trading immediately with all staff employed by the company having been made redundant.
Bussins & Parkin
A 109-year-old kitchen retailer serving Suffolk has gone into liquidation.
A spokesperson said: “Closure during the pandemic hit us hard and when we couldn’t get the products, trade stopped.”
“Business had reached a point where it was making no profit. It’s been awful, we love the business and the customers and have an excellent staff but we have to draw the line somewhere and we couldn’t keep on trading while insolvent.”
High Street Group
Newcastle based property developers the High Street Group, who were building the tallest building in the city Hadrian’s Tower, have been placed into administration with debts estimated to between £75 million and £212 million.
As well as Hadrian’s Tower, they were working on other high profile developments in the city as well as other locations in Birmingham and the North West but had seen a reduction in institutional funding for many of its schemes during the pandemic.
Directors hope that by entering administration they will be able to repay investors as part of any rescue plan including the realisation of assets and a further review into the businesses and directors actions.
The Judge at the hearing said: “There is no doubt that this is an insolvent company and that rescuing the company as a going concern is not remotely likely here.”
MTA Personal Injury Solicitors
Previously a multi-million pound personal injury firm, Kent-based MTA Personal Injury Solicitors LLP have gone into administration.
Previously specialising in road traffic accidents and medical negligence claims, the business found its profit margins severely tightened by reduced fixed fees, the abolition of the recovery of success fees and the Civil Liability Act stopping the recovery of costs for road traffic accidents for claims under £5,000.
The seven remaining employees have all been made redundant. This follows several other large personal injury law specialists also going into administration last month such as Pure Legal and Hampson Hughes.
Farmdrop
Ethical online grocer Farmdrop has gone into administration a week before Christmas affecting the orders of hundreds of customers who had ordered festive food including turkeys and geese.
Founded in 2012, the business specialised in responsibly sourced, homegrown and organic produce from independent producers and sold hundreds of different items to over 10,000 customers and expanded rapidly during the pandemic enjoying what it described as “unprecedented growth” but warned earlier this year that “the growth in orders and sales has not translated into profitability.”
Administrators will now deal with the claim of their customers and over 450 producers who may be owed money or produce. The company had been looking to secure additional funding and support but a spokesperson confirmed that: “It has become apparent that we have exhausted all possible options and we will no longer be able to serve our cherished customers.”
Banana Kick
A Leeds marketing agency with clients as well known as Decathlon, LNER and the Grand National appointed administrators and ceased trading.
An issued statement said: “The company traded as a full service creative agency and was well known locally for organising the popular Jurassic Trail in Leeds city centre which featured large scale animatronic dinosaurs and also an app and helped to support local businesses by driving footfall to the city centre.
“The business has been impacted by the pandemic and in particular the associated restrictions which significantly reduced revenue from experiential events for which the business had been well known in recent years.
“Despite a period of pre-appointment marketing, it was not possible to find a buyer for the business which ceased to trade on appointment with all 16 employees being made redundant.
“The assets of the business will be offered for sale including a number of large scale animatronic dinosaurs, which are expected to generate significant interest.”
Get advice to make sure your business doesn’t go the way of the dinosaur
Many business owners and directors might find themselves with more time on their hands than they planned for or wanted this Christmas period.
With unofficial and official restrictions on some businesses depending where in the UK they’re based they will have plenty of opportunities to think about the health of their company and what they can do to improve things while they still can.
This is where we can help.
We offer a free, initial consultation with an experienced, expert advisor which offers the owner or director the chance to be heard and explain, in detail, what the reality of their situation is.
Once they can see the full picture they can let them know exactly what options are available for them to help improve their situation if it’s at all possible.
Equally if things have gone too far in the other direction and there’s no reasonable hope for recovery, they will explain what they can do to efficiently close the business and take care of any outstanding debts.
Either of these scenarios could make 2022 a better year for any company that’s struggling right now but they can only happen if the people in charge take charge and get in touch.