Autumn has descended on the UK like a dark cloud, bringing with it murk, rain and early darkness without any of the cosy comfort the season is usually associated with.
But you can brighten up your day with this ideal opportunity to catch up with all the important and interesting business and insolvency news stories you might have missed from the past seven days!
So if you want to know why August saw a slight respite in corporate insolvency numbers in August or find out more about the 100 year history of VAT and everything you want to know about Winding Up Petitions – you can read all these stories and more at our advice centre page.
ISG
The British arm of a major international contractor has gone into administration with the potential loss of over 2,000 roles.
ISG Chief Executive Zoe Price sent an email to staff late on Friday night informing them that a deal with a would-be buyer had fallen through after they were unable “to satisfy the funding needed to recapitalise the business.”
She added that a refinancing deal with the firm’s current owner, US private equity business Cathexis, had come to nothing as well.
She said: “We also looked at selling individual business units to third parties but, again, we have not been able to conclude these negotiations in the timescale. This has left us no option but to file for administration.”
Offices and sites will be closed until administrators give permission for staff to enter and obtain their belongings.
She added staff would be paid as normal on Monday and apologised to them for finding out about the administration through the media.
“Some of you may have seen reports in the media that ISG has filed for administration in the UK. With sadness, I can confirm that this is factually correct.
“This was not the way I wanted you to find out and the news should not have leaked in this way.”
Regarding the build up to the current situation she said: “The group’s trading and cash performance has been impacted by legacy issues relating to the large loss-making contracts secured in between 2018 and 2020, primarily in the residential, logistics and distribution sectors as well as some data centre projects.
“Trading out these projects has had a significant effect on our liquidity. So even though we have been profitable this year, our legacy has led us to a point where we have been unable to continue trading.”
Six ISG companies filed a notice to appoint administrators. They are ISG Construction Limited, ISG Engineering Services Limited, ISG Retail Limited, ISG UK Retail Limited, ISG Jackson Limited and ISG Central Services Limited.
Construction analysts are busy trying to work through the consequences for the industry of a top four main contractor but it will be problematic especially for the supply chain of sub-contractors.
ESS Modular
The consequences of ISG collapsing are being felt immediately around the industry as an offsite specialist in Hull is the first to announce it is going into administration as a result.
ESS Modular confirmed that they have ceased trading with the loss of 100 positions as a result. Directors confirmed that the company experienced significant losses on legacy contracts that, in turn, place them under severe liquidity pressures.
They said: “Up to now this has been alleviated by continued shareholder funding; however, material further cash funding was required to enable the businesses to continue to trade.
“Despite exploring options to safeguard the future of the businesses and secure additional funding, it has not been possible to raise the funding required to continue trading.”
Pressed Steel Products (PSP)
A group of County Durham construction businesses have gone into administration this week with the loss of 84 positions.
Pressed Steel Products Ltd along with connected sister companies PSP Architectural and PSP Aluminium made the announcement this week. Architectural and Aluminium operated as manufacturers with the former supplying facades and cladding while the latter supplied door and window frames made principally from aluminium.
Pressed Steel operated as a property holding company from their base in Shildon.
Along with several other construction firms, the companies had experienced trading difficulties in the last few months. Following an expected seasonal fall in sales in December 2023, sales in 2024 didn’t recover as expected leading to cash flow and liquidity issues.
In May the directors were able to secure additional temporary funding to support a forecast increase in sales but this did not materialise and the directors had no choice but to appoint administrators.
A statement from the business said: “The challenges facing the construction sector in the UK are widespread. In particular, we are seeing issues in building products where – even with positive sentiment in end user markets such as housing around government policy and reducing interest rates – there is a long lag to sales.
“That is exactly what happened with PSP; the business had invested heavily in state-of-the-art equipment and IT solutions but was unable to withstand soft demand in the short term. Although buyers are being sought, the business couldn’t continue trading and redundancies were made.”
Cineworld
Cineworld’s creditors have approved a restructuring plan which will see several sites cut or cancel rents in an attempt to keep trading following administration last year.
The company operates 101 sites in the UK and a creditors vote on the restructuring plan passed last week despite some opposition from major landlords. A court will convene a sanctions hearing at the end of September when a judge will decide on whether creditors will be left better off if the company were to go into liquidation.
Cineworld warned that if the plan was not approved then it would be unable to meet its quarterly rent payments and insurance of £19.1 million due at the end of September. They argued that a significant number of UK leases were currently set at a higher rate than the actual market level and requested that 33 sites have reductions in their rents while an additional ten sites should pay rent of around 50p for every ticket sold. A further six sites would only be financially viable if they paid no rent.
Folkestone Fixings (FFX)
A Kent tools and hardware retailer with three branches in Folkestone, Ashford and Lympne has gone into administration and closed with the loss of 147 positions.
Following a downturn in trading after the pandemic, FFX had been exploring options to restructure and turn the business around including building its own brand proposition, reducing its cost base and taking steps to improve working capital cycles.
Despite these efforts, they were ineffective and the company had no option but to appoint administrators.
FFX began trading in 2023 and grew to become one of the UK’s largest independent suppliers of high quality tools, fixings and building supplies, winning Power Tool Supplier of the year in 2018 and 2019.
Morlich Homes
A North East Scottish housebuilder has gone into liquidation and ceased trading.
Morlich Homes were formed in Elgin in 2010 and built hundreds of “high-quality, distinctive homes” along the Moray coast.
A statement from the directors confirmed that “as developers are seeing, a drop off in individual property sales has negatively affected the market. It’s not a sudden lack of demand, but the slowly decreasing demand over the last eight or nine months.”
Five employees have been made redundant.
PL Transport
A Hampshire haulage firm has gone into administration following a breach in the terms of its company voluntary arrangement (CVA).
PL Transport Logistics is based in Alton, East Hampshire and was six months into a five year agreement making monthly payments of £5,000. The CVA supervisor was informed by HMRC that it had liabilities outstanding which would have increased to £12,000 in the second year and would have risen to £65,000 per month in the fifth year.
A statement from the supervisor said: “We have no alternative but to bring the CVA to an end and issue winding up proceedings.”
There are still three months of the year to go so there is plenty of time for businesses to have a strong final quarter to bolster their balance sheets or move in a new direction entirely.
No matter what your aims and goals, the sooner you get in touch with us to arrange a free initial consultation, the sooner you can begin to implement the decisions and changes that will get you closer to them.