What were the main stories this month?
The leaves might be a couple of weeks ahead of schedule in changing colour while we’re still in the summer holiday period but that doesn’t mean that news and business activity stops.
There have been plenty of business and insolvency news stories that have happened this month including administration, CVA and liquidation stories that might have escaped your notice while you’ve hopefully been getting some well deserved down time before the Autumn arrives.
Enjoy our monthly summary!
Newcastle Diamonds
The famous Newcastle Diamonds speedway team, where thousands once watched World Champion Ivan Mauger, have gone into liquidation due to a lack of spectators.
First formed in 1929, the sport suffered a lost season under the Covid-19 pandemic and subsequent lockdowns and the team were unable to continue the current Championship season alongside other local teams the Redcar Bears and Berwick Bandits.
Rob Grant, club owner and promoter, said: “I’ve had no option but to close the Diamonds down now.
“I have to point out this is my decision only, as my fellow co-promoters and anyone else who had a keen interest in keeping Newcastle Speedway going, wanted to help things run until the end of the season, but there really is no other option, and in the longer term, it is for the good of Newcastle Speedway.
“The situation has taken a massive toil on the finances of the club, a massive hit on my own mental health and also a substantial toll on my other businesses and I cannot allow this to take me down.
“Crowds have, naturally, dwindled to an unworkable level and trying to encourage folk back into the stadium was never going to work. The situation was critical, and it had to be shut down now before it became too late for prospective new people to look at taking the club into 2023.
“Had we continued like we were, I’d have ended up running Newcastle Speedway so deep into the ground that it would have been impossible to bring back to life or clear its financial commitment successfully, all of which will be in due course, but now at least there is an option for someone to get in touch and see if new blood can fully take over the club for the future.
“I want to apologise to our fans for how things have ended up. I want to thank my staff and sponsors for striving on through a dark season and wish the club and everyone connected with it the very best moving forward. Sadly, the club and finances have run out of steam, it’s a sad day, but it’s a day which has to happen now.”
Worcester Warriors
The Worcester Warriors premiership rugby union team have received a winding up petition from HMRC over an unpaid tax bill.
HMRC will seek the liquidation of one of the country’s premier Rugby sides at a court hearing which could take place within weeks unless the club settles the date or makes other arrangements in the meantime.
The club released a statement which read: “Worcester Warriors, along with many other businesses and most sports clubs have found the past two years extremely challenging owing to the Covid-19 pandemic and the rise in the cost of living.
“We retained our staff but lost income during the various lockdowns during which the overwhelming majority of matches were played behind closed doors. We returned to normal operations 12 months ago carrying a tax liability to HMRC.
“From the outset, we have worked closely and openly with HMRC on a plan to clear these liabilities and a Time to Pay (TTP) arrangement has been in place.
“The club owners and board are fully committed to preserving top-flight professional rugby in Worcester and have been working on solutions to secure the financial future of Worcester Warriors and to pay outstanding tax owed to HMRC.
“A solution, which would secure the long-term future of the club, has been approved. Unfortunately, there have been unavoidable delays beyond the club’s control to the final tasks required to complete the funding.
“Having kept HMRC fully apprised of the situation, we are disappointed that they have taken the decision to issue a winding up petition. The club’s directors are in continuing dialogue with HMRC in an attempt to find a speedy and satisfactory resolution.
“We have also been in communication with the Department for Digital Culture, Media and Sport, Sport England, Premiership Rugby and the RFU regarding this matter.”
Tree of Life
The Uk’s biggest wholesale distributors of healthy, natural and organic products has gone into administration with the loss of 143 positions.
Tree of Life UK was based in Newcastle-under-Lyme and along with sister company Health Stores (Wholesale) Limited in Nottingham have blamed tough market conditions and the loss of a major client.
A statement from the business said: “The companies form part of the UK’s largest independent health food and wellness products distribution platform, supplying a broad range of third party and owned brand goods, food and drink, personal care, vitamins, minerals and supplements.
“Over recent months, the group has faced a number of challenges including an unexpected sales decline following the loss of a large customer, and unprecedented market conditions that have impacted on financial performance.
“Despite significant efforts by the company to avoid insolvency, the directors reached the conclusion that it was in the best interest of creditors for the company to be placed into administration.”
Worksmart Contracts
Kilmarnock based interior design contractor Worksmart Contracts has gone into liquidation with the loss of 24 positions.
A spokesperson for the business said: “Following Worksmart’s turnover falling from circa £9 million to around £5/£6 million during the pandemic, the directors have arrived at the regretful decision to wind up the business as soon as practicably possible.
“Worksmart’s directors have reached the view that the business cannot continue to trade due to a number of factors; competition is fierce and profit margins have been squeezed to the extent that the business is no longer financially sustainable.
“Furthermore, it appears that, in response to Covid, Brexit and the recession, Worksmart’s customers are tightening their purse strings, with the result that the level of work required to sustain the business no longer exists.
“This increase in business operating costs has been coupled with recent National Insurance and tax increases. The business has also had to cope with significant bad debts owed to us and, in general, slow payments from some clients over recent months.
“In parallel to these cost increases, our revenue has been affected by numerous and consistent client delays, uncertainty and indecision in starting new project work, and workload has stagnated in recent months as a result.
“With the ongoing uncertainty in the general economy, we foresee this trend continuing and our work streams being further reduced and delayed.
“As a result of these factors, and despite our continued efforts, we have taken the regretful step to appoint a liquidator to help manage the situation.
“Worksmart has secured and delivered over £100 million of successful projects over 20 years and we have done our very best in delivering these projects for our clients.
“We have invested in our team, our business, our industry, our local supply chains, and our local communities throughout. The directors are devastated at having to make this decision.”
Yellow Buses Bournemouth
The Yellow bus company, which has operated throughout Bournemouth and the surrounding Dorset area for over 120 years has gone into administration blaming the challenges of the Covid-19 period.
Loss of revenue tied to changes in passengers’ lifestyles and a growing reluctance to travel on public transport has had a material financial impact on the business. Additional factors such as the recent increase in fuel prices and the general rise in inflation has only made that greater.
A spokesperson for Yellow Buses said: “Our 120th year is one of the most difficult. All bus operators are finding things difficult as they struggle to recruit staff. This is compounded by all the problems we’ve seen about issues at the weekends – the volume of cars and congestion.
“We recognise that many people rely on the Yellow Bus network for all sorts of aspects of their daily lives and that for them and the 300 staff employed, this is an unsettling time.
“Administrators are doing all they can to ensure that the business continues to operate as normal as possible under the circumstances and continues to do so into the future.
“Negotiations with a large national operator have entered the final stages and we hope to be able to conclude within a matter of days.
“With its long history in the local area and its integral role within the community we appreciate that there will be a great number of people concerned about this news. What we would ask is that the community shows its support by using the services.
Powells and CT Plus Buses
The organisers of the Wide Skies and Butterflies festival due to be held at the Raynham Estate with acts including The Vaccines, Hot Chip and James have gone into administration citing high costs and low ticket sales with the cancellation of the event.
Wide Skies CEO Samira Williams said: “I’m sorry and absolutely devastated. None of this was intentional, I don’t know how to convey how awful I feel about it.
“I’ve put blood, sweat and tears and a lot of my own money into this, and I’m devastated it’s not going ahead.”
More than 3,000 tickets were sold for the event from £100 and upward depending on the type of hospitality package ordered.
Williams’ company, SMS Event Productions, arranged the festival and hoped to get 10,000 a day to attend but the late withdrawal of an investor along with higher than expected costs and poor ticket sales meant there was no alternative to administration.
Samira Williams continued: “When they pulled out we were frantically trying to find other investments. We spoke to loads of other festival companies at this point – asking them to bail us out, buy us out, take all of it if they needed to – but sadly it just wasn’t enough time.
“When you get into May, June and July you usually see a spike in ticket sales. We didn’t do that – in fact they dipped. You can only go on how many days left you have and how many tickets you need to sell per day, and we were just not getting there. So as we got closer to the date we decided to call it.You can’t keep selling tickets to something you know is not going to happen.”
One reason why ticket sales were depressed was because a number of potential customers had “rollover” tickets for festivals which had originally been scheduled for 2020 and 2021 and by the unusual glut of festivals in the market this year.
Meanwhile costs were double their normal levels due to increased demand for the skills and equipment of production teams and suppliers who had spent two year laid off due to Covid.
Unique Funeral Plans
A well known funeral plan firm, Unique Funeral Plans, has been declared insolvent and gone into a creditors voluntary liquidation (CVL) affecting more than 3,000 customers.
A spokesperson confirmed: “The business has now ceased trading and is insolvent.
“Unfortunately, this means all pre-paid funeral plans cannot be refunded or honoured by the company.
“The proposed liquidators will continue to work with the director, clients and other stakeholders over the coming days and weeks to ensure an orderly wind-down of the business. Further information will be made available in due course.”
From 29 July this year, funeral plans were regulated by the Financial Conduct Authority (FCA) but Unique had not applied to be authorised so were not able to sell any more funeral plans after this date.
Unique was due to be struck off the official list of companies but this was dropped in May 2022 when the FCA issued a statement “strongly” advising customers not to buy a funeral plan from Unique.
South West Photo and Film
Wedding photographers and videographers South West Photo and Film, formerly Lee Brewer Photography, have ceased trading stating the financial implications of Covid-19 have proven too much.
As the business was operated as a sole trader, the owner has declared personal bankruptcy.
A statement issued by the business said: “We apologise as this is going to cause stress and we’re extremely sorry for this. Unfortunately there was never going to be a good time.”
Wriggle app
The founder of Bristol based discount restaurant app Wriggle has confirmed that the company has ceased trading for good.
The app was popular and curated deals from eateries around the city for use by customers. At its height it operated in seven UK cities and had been downloaded more than 400,000 times.
Despite trying to relaunch, founder Rob Hall admitted that the company never recovered from the shock of three Covid lockdowns.
He said: “After each lockdown, we tried to return but too much momentum was lost, and there was so much pent-up demand for dining out post-pandemic (and red tape around dining restrictions with the rule of six) that our restaurant partners didn’t come back to Wriggle at sufficient speed.
“Sadly we took the decision, after conversations with our investors and team, to close Wriggle down.”
The other businesses in the group – an online food shop Bristol Pantry, an independent shopping platform Squiggle and a luxury food gifting service have also closed.
Broadway Stampings
Two Milton Keynes businesses employing 319 people have gone into administration.
Broadway stampings and Dyson Diecastings supplied parts to the automotive industry and were among the last family-owned independent pressed and sheet metal component manufacturers and die casters left in the UK.
Broadway bought out Dyson Diecastings in 2017 and operated from the same industrial estate but over the past few years have had to battle a string of problems affecting the UK automotive supply chain including the impact of Brexit and Covid-19, escalating raw material and energy costs, supply chain disruption and shortages of both essential components and labour.
A statement released by the business said: “Unfortunately, the myriad of issues facing the sector over the past two to three years have had significant impact on the companies, resulting in the directors needing to take proactive action to safeguard the businesses’ future.
“We have been pleased with the positive conversations and financial support provided by customers in recent days which has ultimately provided the businesses with a crucial lifeline.
“We’d also like to extend enormous thanks to the companies’ employees and suppliers for their support and understanding while this process has been underway.
“The priority is now to work with suppliers to re-establish production and explore interest in the businesses and assets if possible.”
Broomhall Castle Hotel
A traditional Scottish wedding venue, Broomhall Castle Hotel, has gone into liquidation after 30 years of trading.
The castle was built in 1874 in Clackmannanshire and has been running as a hotel and function suite since 1985.
A statement said: “Unfortunately, the business suffered from the impact of Covid-19 lockdowns with debts accrued making it unviable.
“It’s sad to see the demise of this popular hotel after 40 years in business. Unfortunately, the hospitality sector was one of the worst affected by the disruption of the pandemic with the series of lockdowns over the last two years resulting in a significant loss of revenue.
“Liquidators are currently in the process of releasing any assets that can provide the best return for creditors, as well as liaising with the 18 couples who have their weddings booked.”
Singletons Dairy
Historic Lancashire based cheesemaker and cheesemonger Singleton’s Dairy trading as Singletons & Co has gone into administration with 69 positions being made redundant as a result.
The 80-year-old company had attempted to sell the business as a going concern prior to the appointment of administrators but this was unsuccessful.
The business found itself struggling to manage the effects of Covid-19, the rising costs of milk and other additional overheads.
The Window Glass Company
A Bristol window manufacturing company has entered administration amid inflated costs and delays to key projects.
Founded in 1970, the business designed, made and installed aluminium window systems and curtain walling for public and private sector buildings.
Brexit and Covid-19 had severely impacted the business over the past two years resulting in losses along with rising energy and raw material prices combined with delays to key projects resulting in more.
Despite having a strong future order book and a number of live contracts, the business faced an immediate cash flow requirement which couldn’t be met leaving bosses with no option but to place the business into administration.
Administrators are looking to find a buyer for all or part of the business and assets whilst the viability of continuing to complete certain key projects is assessed.
A statement said: “We’re sorry to see such a long established South West family owned business fail as a result of the legacy impact of the Covid-19 pandemic, inflationary pressures on costs and project delays, that were all largely outside of their control.
“The directors had to make the difficult decision to enter administration to prevent the position for creditors worsening.”
Speedclad
A specialist facade contractor based in Northallerton has gone into administration recently.
Speedclad Ltd provided the design, supply and installation of cladding and curtain walling facades at such high profile locations as Silverstone.
Unfortunately over recent years Speedclad faced challenges on multiple fronts including a difficult trading environment. The business was hampered by wider economic conditions which resulted in a number of postponed or abandoned contracts, supply chain challenges, material and labour shortages and rising prices.
While this was happening, one of their major contracts became loss-making which had a profound impact on their working capital.
Despite the best efforts of the directors to avoid insolvency, they reached the conclusion that it was in the best interest of creditors for the company to be placed into administration.
A total of 44 staff members have been made redundant while administrators are exploring various options including sales of assets and intellectual property.
Harris CM
Yorkshire based construction company Harris CM Ltd that provided a range of projects mainly in that area has gone into administration with the loss of 25 positions.
A spokesperson said: “The company has been faced with a combination of significant financial challenges, in particular the spiralling costs of raw materials and an inability to pass these on to customers due to fixed price contracts.
“Despite the best efforts of the management team, the accumulated losses from these contracts have unfortunately led to the ultimate cessation of trade of the company. This is another example of the wide-ranging challenges facing the construction sector at present.”
Chief Executive Jason Adlam said: “It is with great sadness that after 15 successful years we have had to take the difficult decision to close and place the company into administration.
“We’ve worked phenomenally hard to get through both the Covid related impact and also deal with the recent well-known issues in the construction sector, but a combination of recent contract issues has ultimately meant we can no longer see a way to continue.
“Wherever possible we will do our utmost to work with customers to ensure a handover of the sites. We’re confident our excellent staff will find new roles and wish them all the best of luck.”
Scott Commercials
A Welsh haulage business, Scott Commercials, has gone into liquidation with the loss of ten jobs.
Based in Ebbw Vale, the nine-year-old business could not manage the soaring fuel costs they and other hauliers face.
They also faced rises in PAYE, fuel, fuel additive ad-blue and tyres that created a significant cash flow issue for the business but the fuel bills themselves had risen by approximately £5,000 a week net prior to the decision to close.
A statement from the company said: “The last 12 months has been an incredibly difficult time for hauliers, who have seen their overheads increase dramatically and rapidly. Despite efforts to reduce the impact, these challenging trading conditions proved untenable for Scott Commercials.
“The remaining work will be to finish winding up the company and looking to realise any assets for the benefit of creditors.”
Last month’s corporate insolvency figures rose once more and as the underlying conditions causing them begin to worsen this might be the beginning of a very tough period for businesses.
Whether you’re facing a financial test right now or think you might in the future – the best time to deal with it and get some professional advice is always now.
We offer a free consultation to any director or business owner who’s worried about the next few months and what they could bring.
One of our team of experienced advisors will let them know exactly what their options are and what decisions they can take that could have a positive impact immediately on their company.
The earlier they take action, generally the more options and choices they will have as well as time to implement them effectively.
If you are in or think you could be in this position then don’t wait for it to arrive – get in touch today to prepare for it properly.