28th January 2021 Press Release from InfolinkGazette
Edinburgh Woollen Mill Limited (The) went in to Administration owing £184,680,000 to 1425 unsecured creditors, or £44,680,000 to 1424 unconnected creditors. 108 unsecured creditors stand to lose over £40,000. Greg Connell, Managing Director of InfolinkGazette, said: “EWM hadn’t been paying the rent since March 2020, so landlords including local government authorities are big losers, but the biggest single loser was the Pension Protection Fund with losses estimated at £17,500,000, which will mean lower future pensions for former employees.” Greg added: “trade credit insurance was still available up until the summer of 2021, meaning some trade suppliers will have been covered, but the scale of the problems facing the group were becoming apparent from August.”
Tyre & battery fitters Alltyres Trading Limited went in to liquidation owing £1,681,600 to 44 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, said: “Alltyres looked to be in pretty good financial shape Pre-Covid but now form part of the first wave of Covid corporate demises.”
In a recent trading statement, Town Centre Securities PLC name and shamed Premier Inn, claiming that the hotel chain owned by Whitbread Plc, unexpectedly paid only half of their rent due for the latest quarter, leaving £0.1m unpaid, without any agreement. Greg Connell, Managing Director of InfolinkGazette, said: “Whitbread Plc have issued 3 profit warnings in the last 12 months.”
Landlords take a hammering as a result of Peacocks Stores Limited entering administration owing £40,715,300 to 944 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, said: “rents hadn’t been paid across the entire group since March 2020”. Greg added: “trade credit insurance was still available up until the summer of 2021, meaning some trade suppliers will have been covered, but the scale of the problems facing the group were starting to become apparent from August.”
Paperchase Products Ltd, the troubled stationery chain filed a 2nd notice of intention to appoint an Administrator today (19/01/21). Greg Connell, Managing Director of InfolinkGazette, said: “Paperchase originally filed two weeks ago on 05/01/21, but presumably weren’t able to complete the appointment within the permitted 14-day moratorium”. Greg added: “they now have another 14-day moratorium”.
Begbies Traynor Group plc acquire CVR Global LLP for a consideration of £20.8m - In the financial year ended 31 March 2020, CVR Global reported annual revenue of £9.5m, normalised pre-tax profits of £1.2m and Net assets of £4.1m. Greg Connell, Managing Director of InfolinkGazette, said: “we are expecting substantial growth in the insolvency sector this year.” Greg added: “there were over 3,000 companies that would have entered insolvency in 2020 even if there hadn’t been a pandemic but didn’t enter formal insolvency because of government stimulus measures; when the stimulus measures stop, the insolvency volumes will surge”.
£10 million construction company Goodwins Construction Services Group Limited went in to Administration owing £1,307,750 to 211 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, said: “HMRC were pursuing Goodwins for £250,000 of Construction Industry Scheme (Subcontractor) under payments.” Greg added: “the company obtained a £700,000 CBILS loan in June, but needed another £600,000 to keep going, but further funding was not forthcoming.”
Paperchase Products Ltd, the £125 Million stationery chain filed a notice of intention to appoint an Administrator today (05/01/21). Greg Connell, Managing Director of InfolinkGazette, said: “Paperchase spent six months in a Company Voluntary Arrangement (CVA) in 2019, only exiting the CVA in August”.
Directors and Members called time on over 13,000 solvent businesses in 2020 with a surge in the number of England & Wales resolutions for voluntary winding up, increasing from 8,573 resolutions in 2019 to 13,046 in 2020. Greg Connell, Managing Director of InfolinkGazette, said: “these member voluntary liquidations are solvent companies, so not counted in the insolvency statistics but the steep rise is a clear indication of highly negative business sentiment.” Greg added: “many of these MVLs will be companies that have decided that racking up debt is not the answer to lost trading profits, and some will be racing for the exit in advance of anticipated CGT hikes.”
The extended restrictions on commercial landlords' ability to take enforcement action against commercial tenants who are in rent arrears has deferred the traditional Christmas holiday surge in Administration application. Only 2 Administration applications were lodged in the High Court during Christmas 2020 versus 22 during Christmas 2019. Greg Connell, Managing Director of InfolinkGazette, said: “In the absence of further extensions, landlords will be able to forfeit for non-payment of rent from 1 April 2021.” Greg added: ”by then, there will be thousands of retail and hospitality tenants 3 to 4 quarters' rent in arrears and we expect to see a surge in Administration applications on the eve of the restrictions expiry, before landlords can begin enforcement.”
Auto Spares and Parts Limited went in to liquidation owing £4,116,740 to 108 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, said: “the 31/12/2018 accounts weren’t signed until 26/05/2020.”
I C S Distribution Limited went in to Liquidation owing £2,252,260 to 172 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, said: “the company hadn’t filed a financial statement since July 2019 when it lodged October 2018 accounts. When the 2019 accounts were due to be filed, the company extended the accounting period”. Greg added: “suppliers who continue to trade on open credit terms with customers that have not filed a financial statement in the last 12 months are incurring heavy losses.”
A collaboration with Marstons and an imaginative solution saves Welsh brewers S.A.BRAIN & COMPANY LIMITED. Greg Connell, Managing Director of InfolinkGazette, said: “S A Brain are unlikely to be out of trouble, the 2019 accounts are long overdue filing at Companies House, and a negligible net pension scheme liability in 2018 may well have become a significant deficit in the last 27 months. In the absence of any recent financial statements, creditors should assume the worst.”
Landmark Southport hotels Southport Promenade Hotels Limited and D'Urberville Hotels (Southport) Limited have both filed a second Notices of Intent to Appoint and Administrator. The first High Court notices were filed on 8th December 2020, with the second filing on 22nd December. Greg Connell, Managing Director of InfolinkGazette, said: “when the application doesn’t proceed to an appointment within the statutory 10 days, during which a company has protection from its creditors, we are seeing a number of follow up applications.”
Family-owned building contractors J A Ball Limited went in to Administration owing £2,092,790 to 178 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, said: “looking at the Administrators report it seems the company was in deep trouble before Covid-19 have taken on a number of projects that ultimately turned out to be loss making in 2019, with losses estimated at £3.1 million.”
Sparkle Dental Labs Limited, which operated from state-of-the-art million-pound premises at the University of Bolton went in to liquidation owing £2,642,460 to 60 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, commented: “associated company Genix Healthcare Limited are owed £1,506,451.” Greg added: “Genix Healthcare Limited reported a near £5 million negative net worth and a £7 million working capital deficit in their most recently filed accounts.”
BLUE GROUP UK RETAIL LIMITED, trading under the Bensons for Beds brand went in to Administration owing £15,078,200 to 187 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, commented: “unsecured creditors will be having sleepless nights with no expectation of a dividend.” Greg added: “the Covid-19 enforced closure along with ongoing trading underperformance caused a breach of covenants in relation to lending facilities.”
Four separate Deltic Group companies significantly controlled by Nightclub operator Deltic Group, filed Notices to appoint an Administrator in the High Court on 17th December. Greg Connell, Managing Director of InfolinkGazette, commented: “it is difficult to think of an industry, closed by law since March 2020, with no prospective opening date that has received so little government support.”
Home improvement company G2SGroup Limited went in to liquidation owing £2,729,630 to 60 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, commented: “It was doubtful that this business was a going concern back in 2019 when it reported a negative net worth of £750,000 and £1,800,000 of disputed invoices with a supplier”.
Crowd funded affordable homes builder Eliot Design & Build Limited went in to liquidation owing £3,084,700 to 148 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, commented: “these unsecured creditor losses have occurred despite the fact that the company owned freehold land and buildings estimated to realise £450,000 against a book value of less than a £40,000.”
8th December 2020 Press Release from InfolinkGazette
2020 has been an eventful year: profit warnings have rocketed to unprecedented levels, more than doubling to 760; upmarket retailers and casual dining chains have collapsed in to insolvency; secured lending has fallen 25%; there has been a double digit decline in GDP; and yet 2020 corporate insolvencies are down below two thirds of 2019. However, in the last 2 days of November, 57 E&W companies filed insolvency applications in the High Court, compared with a recent run rate of 7 applicants a day; high court filings are a leading indicator of near term insolvencies. Some of the volume has been generated by the 1st December deadline on Crown Preference and some of it is the Arcadia collapse, but we are now seeing the beginnings of the insolvency surge. Corporate insolvencies in 2021 will include the unmaterialised insolvencies from 2020, the businesses that would have failed but for Government stimulus measures, plus the natural 2021 insolvencies and the insolvencies brought on by COVID-19; 2021 will probably be too early to see the insolvencies resulting from taking on too much debt, but we will see the insolvencies that are as a direct consequence of reduced trading during Covid-Countermeasures. Trade Suppliers who don’t have Credit Insurance will be bracing themselves for a period of unprecedented losses, exacerbated by the resumption of Crown Preference.
Final flurry to beat the Crown Preference deadline - Greg Connell, Managing Director of InfolinkGazette, commented: “we normally process around 4 or 5 Notices of Intent to Appoint an Administrator per day, but in a final rush to appoint, there have been 43 HMCourt filing since Friday and we’re expecting to see even more before the midnight deadline”. Greg added: ”these will be the final few insolvencies where HMRC stand inline with all of the other unsecured creditors, and from tomorrow onwards, the insolvency of a customer will become an altogether more painful and expensive experience.”
Audio conferencing platform LoopUp Group PLC warned on profits for the second time this year, blaming a lack of differentiation and increased competition.
Digital cinematography hire company Procam Television Limited went in to Administration owing £14,772,800 to 200 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, commented: “the company had been losing money since 2016 and due to the decline in demand resulting from the Covid-19 lockdown, were unable to raise funds to restructure.”
Upmarket retailers GUESS U.K. LIMITED, owned by Guess Inc and Aspinal of London Group Limited have both filed papers in HMCourts to enter a CVA. Aspinal of London Group Limited’s subsidiary ASPINAL OF LONDON LIMITED had already entered a CVA. Greg Connell, Managing Director of InfolinkGazette, commented: “year to date insolvencies are down more than a third on prior year, and that’s down to government stimulus measures, but no amount of stimulus will defy gravity indefinitely.”
Manchester based civil engineering contractor Bemus Construction Services Limited went in to Liquidation owing £4,872,750 to 250 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, commented: “the Government-backed temporary reinsurance scheme, which has been critical to the construction sectors ability to continue accessing trade credit insurance runs out on 31 December 2020; without an extension, there is a real risk of a construction credit crunch”.
Bus and Coach operator Mike De Courcey Travel Limited went in to Administration owing £3,691,980 to 130 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, commented: “the fact that vehicles with a book value of almost £800,000 are only estimated to realise £65,000 is a good indication of the scale of damage that has been inflicting on this sector.”
The outlook is bleak at Nakama Group PLC, the AIM quoted recruitment consultancy working across the UK and Asia. In a recent profit warning, the board stated: “as the various government support schemes are ended, the Company will face a number of trading and cashflow challenges and without access to additional capital the Group's working capital situation may deteriorate. The Company's largest shareholder has made it clear to the Board that they would not support a fundraise and would vote against the necessary shareholder resolutions to issue new shares.” Greg Connell, Managing Director of InfolinkGazette, commented: “there are no persons, or entities with significant control, so there may be some hope, but suppliers should be looking to manage down exposure.”
Secured lending volumes collapses in the 6-month period 1st April to 30 September 2020, compared to 2019. The total number of secured charges registered at Companies House was down 25% on the same prior year (PY) period. Lloyds Banking Group remain the No. 1 secured lender, but with just 5,824 secured charges registered during the 6-month period versus 7,207 during the same PY period. HSBC leap frog Barclays in to 2nd place, and Nat West (RBS) fall from 2nd place to 4th. Bibby Financial Services Ltd drop out of the top 20 charge holders. Greg Connell, Managing Director of InfolinkGazette, commented: “the number of CBILS and BBLS granted during this peak period seems to be driving down the volume of new secured lending facilities across the majority of finance providers.”
Listed architect Aukett Swanke has warned it will slip back into the red this year. The board reported: “the Group returned to profitability in the first half. However, Covid-19 has impacted the second half year such that the Group now expects to report a small loss for the full year”. Greg Connell, Managing Director of InfolinkGazette, commented: “there is still a great deal of uncertainty over the size and timing of future construction projects”.
INGLEBY (1949) LIMITED the owners and operators airport lounges NO1 LOUNGES have filed papers in the High Court to enter a Company Voluntary Arrangement. Greg Connell, Managing Director of InfolinkGazette, commented: “Airport Lounges have been largely open, albeit with restricted services and reduced opening hours, but it is hardly surprising that they are facing financial difficulties with air passenger numbers down around 80%.”
Cruden Construction Ltd, went in to Administration owing £13,786,100 to 161 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, commented: “when you analyse the scale of the losses sustained by individual unsecured creditors, relative to their size, you have to hope the suppliers had secured trade credit insurance cover, because if not, many of them won’t be able to recover from their losses.”
Cote Restaurants Limited, the operator of 100 UK restaurants went in to Administration owing £7,193,450 to 264 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, commented: “Cote had been growing revenues and posting operating profits, and was undoubtedly a casualty of the nationwide lockdown; suppliers to the hospitality sector will continue to pay a heavy price, which will be further exacerbated by Lockdown 2.0.” Greg added: “where credit insurance is available, suppliers should seek cover and not rely on shrinking dividend pay outs from firms in Administration.”
Specialist engineering and defence contractor Pressure Technologies issued a profit warning blaming tougher trading conditions, Covid-19 disruption and the deferral of revenue and profit for a defence contract into FY21. Greg Connell, Managing Director of InfolinkGazette, commented: “Pressure Technologies warned on profits in April, unrelated to Covid-19 disruption.”
Clothing retailer J. Crew U.K. Limited went in to liquidation owing £2,915,910 to 22 unsecured creditors. Greg Connell, Managing Director of InfolinkGazette, commented: “the audit would have been signed off in October 2019 and based on the latest trading statement it is incomprehensible that there wasn’t an explicit material uncertainty report.” Greg added: “you wonder what it takes to trigger an Auditors material uncertainty report, but as we start to see audited financial statements that have been effected by Covid-19, creditors shouldn’t assume that the Auditors have tested the going concern basis with sufficient rigour”.
Revolution Bars Ltd applied to the courts for a Company Voluntary Arrangement on Monday 27th October. Greg Connell, Managing Director of InfolinkGazette, commented: “sales have halved since the imposition of the 22:00 curfew and multiple outlets are going to have to close permanently”.
13th October 2020 Press Release from InfolinkGazette
Three recent UK Administrations highlight the value of trade credit insurance. New research from InfolinkGazette has identified that just three recent Administrations have resulted in 851 creditors being owed nearly £105 million. All three businesses are well-known, established names: TML Realisations Limited - formerly menswear retailer T.M Lewin & Sons (£19,990,000 owed to 446 unsecured creditors), the Casual Dining Group of Companies (£39 million owed to 300 unsecured creditors), and Wigan Athletic A.F.C Limited (£45,695,700 owed to 105 unsecured creditors). Greg Connell, Managing Director of InfolinkGazette, commented: “The UK Government-backed Trade Credit support Scheme has been helping to ensure continuity of trade insurance cover in the UK; and, it isn’t just existing policyholders that benefit. With insolvencies set to spike, uninsured trade supplier looking for increased peace of mind might want to take another look at trade credit insurance”.
Jaeger Retail Limited, ultimately owned by The Edinburgh Woollen Mill (Group) Limited has filed a Notice of Intention to appoint an administrator in the High Court. InfolinkGazette's Managing Director, Greg Connell said: "trade suppliers should be wary of costly pre-pack”.
Parent company Paintbox Group Limited allowed Paintbox Birmingham Limited to enter Administration with 30 unsecured creditors owed £9,696,950, which includes £6.7 million owed to Group Companies. InfolinkGazette's managing director, Greg Connell said: "Paintbox Group look very vulnerable”.
Multinational medical equipment manufacturing company Smith & Nephew announced a third quarter underlying revenue decline of approximately -4% but a strong recovery on the second quarter when declines were running at -29.3%. InfolinkGazette's managing director, Greg Connell said: "the results continue to reflect a Covid-19 impact but point to a recovery in global levels of elective surgery.”
Dividends paid to unsecured creditors from insolvent companies will shrink next year, partly due to HMRC becoming a preferential creditor but also the collapse in business asset values that have become stranded assets (assets that can't be fully utilised under Covid-Countermeasures). InfolinkGazette's managing director, Greg Connell said: "it is easy to see how a £300 million cruise ship, or an airliner becomes worth next to nothing when it is no longer possible to operate them profitably, and the same is happening with expensive fit outs in restaurant kitchens and with high end retail leasehold improvements.
Wigan Athletic A.F.C Limited went in to Administration owing £45,695,700 to 105 UK unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “there are 9 football clubs listed amongst the creditors, including Barnsley Football Club, who are owed £1,500,000 and Everton Football Club Ltd, who are owed £1,268,136.”
Luxurious Shoreditch members club, AL Curtain Tenant Limited, t/a The Curtain went in to liquidation owing £7,043,860 to 156 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “the company was incorporated in July 2018, but by using the old trick of once extending, and twice shortening the accounting period, they managed to avoid ever filing any accounts”.
Building services company Ilec Ltd went in to Administration owing £2,738,730 to 103 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “the Administrators report blames Brexit and Covid, at InfolinkGazette, we think it might have more to do with paying out more in dividends than the profits that had been generated”.
Declines related to Covid-Countermeasure in the global casinos and gaming sector are having a knock-on-effect in other sectors. Security and surveillance system experts, Synectics plc issued a profit warning today, stating that the anticipated recovery in financial performance is unlikely to take place in the 2nd half of the year. InfolinkGazette's Managing Director, Greg Connell, said: “the Synectics board believe the vast majority of planned surveillance system projects and upgrades in the sector will now be delayed beyond 2020, because of ongoing interruption to gaming activity around the world”.
TML REALISATIONS LIMITED, formerly menswear retailer T.M.LEWIN & SONS LIMITED, established in 1898 went in to Administration owing £19,990,000 to 446 UK unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “in common with many retailers with a nationwide network of stores, the introduction of Covid-countermeasures has accelerated T M Lewin’s move to online-only”. Greg added: “in an uncertain trading environment, retailers will continue to close out their bets on a store network and restructure around online-only”.
The Casual Dining Group of Companies went in to Administration owing over £39 million to over 300 UK unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “the group, which includes Bella Italia and Café Rouge was sold to Epiris LLP, an independent private equity firm for an initial consideration of £9 million, with a further £9 million deferred until assignment of the leasehold portfolio”.
On 17/09/2020 Trainline PLC issued a Profit Warning stating: Government measures to curb the spread of COVID-19 resulted in a significant slowdown in all the markets in which Trainline operates. The impact was particularly marked in the first quarter of the financial year, when industry passenger volumes in the UK fell to c.5% of the same period in the prior year through April and May, with similar declines across International markets. Trainline also processed a significantly higher number of refund requests (more than 2 million in the UK alone). InfolinkGazette's Managing Director, Greg Connell, said: “Trainline was the largest IPO in 2019, when it’s shares soared on their first day of trading after the tech giant made its £1.7bn stock market debut”.
Preventing Landlords from taking legal remedies for 2020's unpaid rent until after 31st December 2020 (extended from 30th September 2020) is far too blunt an instrument. Some of the uncollected rent is due from solvent tenants who are taking advantage of the moratorium to either not pay rent or seek lower contractual terms and the insolvent tenants will owe as much as 9 months’ rent when they eventually yield to the inevitable insolvency.
Designer outlet AQUASCUTUM (1851) LIMITED have filed a “Notice of Appointment to appoint an administrator” at HM Courts. InfolinkGazette's Managing Director, Greg Connell, said: “this is a document that is filed in court signalling the company’s intention to go into administration. It is often used as a way of restructuring a failing business to stop it from being liquidated and can also be used as part of the pre-pack administration process. Greg added: “the court records provide a vital early warning for creditors because nothing has been filed at Companies House, or published in the Gazette.”
Technology Company CDI Group Limited went in to Administration owing £3,297,090 to 74 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “at the time of the insolvency, the accounts were overdue, despite a long history of shortening, and extending the accounting period between filing dates”.
8th September 2020 Press Release from InfolinkGazette
Forthcoming service aims to reduce the critical time delay between the actual decision to appoint Administrators and unsecured creditors being aware of the fact. InfolinkGazette has advised that it soon intends to begin offering a new service to clients which aims to reduce the critical time delay between the actual decision to appoint Administrators and unsecured creditors being aware of the fact. Greg Connell, Managing Director or InfolinkGazette notes that occasionally the filing of a notice to appoint Administrators is picked up solely due to the fact that they form part of a Listed Company and are required by the Regulator to inform the Market of such events. When there is no such obligation, unsecured creditors are generally blindsided until the notice appears in the Gazette or is filed at Companies House. As Mr Connell stresses: "Clearly such a delay can make a huge difference to the quantum of any subsequent Creditor claim."
Arlington Engineered Systems Limited went in to Administration owing £17,294,300 to 630 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “Arlington were very late filing 2019 accounts, which not surprisingly resulted in the withdrawal of credit insurance; unable to secure credit terms, it looks like the group ran out of cash.”
Expensive burger chain, Byron Hamburgers Limited went in to Administration owing £15,378,000 to 139 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “the Byron management had already realised that selling expensive burgers from 51 sites was unlikely to turn a profit and 19 or more locations would need to close, but when they all had to close as part of the Governments Covid-Countermeasures, Byron ran out of time.” Greg added: “Byron wouldn’t have qualified for access to CBILS because accumulated losses exceeded 50% of capital”.
FOUR SEASONS HEALTH CARE LIMITED (Company number 05165301), the UK's largest, but financially troubled independent health care providers filed an Administrator Appointed document at Companies House today. InfolinkGazette's Managing Director, Greg Connell, said: “the company filed a Notice of Intention to appoint an administrator at HM Courts on 04/08/2020, almost a full month before the official appointment.” Greg added: “Four Seasons Health Care Group Limited filed the notice of intent at the same time, but the Administrator Appointment was confirmed on 20/08/20.”
Archant Community Media Holdings Limited, part of the Norwich based Archant newspaper and magazine publishing group filed a Notice of Intention to appoint an administrator ahead of the bank holiday weekend. The group publishes four daily newspapers, around 50 weekly newspapers, and 80 consumer and contract magazines. InfolinkGazette's Managing Director, Greg Connell, said: “Archant appear to have been purchased by a private equity firm; the outlook for creditors is not yet know, but Archant’s defined benefit scheme had a £25 million deficit in 2018, and that deficit is likely to have grown since then”.
Suppliers are about to be hit by a Quadruple whammy: HMRC as a preferential creditor; the deferred insolvencies that have simply been delayed for the past 5 months; the insolvency growth of companies in at least 80 sectors that are no longer viable under Covid-Countermeasures; and, the collapse in asset values from what will become stranded assets (assets that can't be fully utilised under Covid-Countermeasures). The situation will be made even worse by the knock-on effect, whereby previously viable companies will fail as a consequence of mounting unsecured and uninsured losses from corporate failures.
Celine Group Holdings Limited, the parent Company of Debenhams Retail Ltd (in Administration) have filed a Notice of Intention to Appoint an Administrator and a further Notice of Appointment to appoint an administrator at the High Court. InfolinkGazette's Managing Director, Greg Connell, said: “Celine is controlled by Debenhams’ lenders and only took control of Debenhams on the 04/04/2020. Greg added: “we only see these types of High Court filings when companies are about to formally enter Administration, and a moratorium will already be in force.”
In the latest profit warning from Lookers PLC, the board reported that the temporary closure of the Group's dealerships throughout the lockdown period had made a significant impact on the Group's revenue and expects to report H1 revenue of approximately £1.6bn (2019: £2.6bn). In addition to the revenue decline, the Group also experienced margin pressure in both new and used vehicles with the former impacted by reduced levels of manufacturer volume bonus receipts. The Group expects to report a material underlying PBT loss for H1, after receiving c£29m from the Government's Job Retention Scheme. InfolinkGazette's Managing Director, Greg Connell, said: “the company has now issued 4 profit warnings in a little over 12 months and has also widened the scope of its audit into a £19m black hole in its 2019 financial results.”
CATH KIDSTON LIMITED (now CKL Realisations Limited) went in to Administration owing £6,874,509 to 430 UK unsecured creditors, plus £68,398,991 to unsecured group company Cath Kidston Acquisitions Ltd. InfolinkGazette's Managing Director, Greg Connell, said: “the private equity owners of the business held a secured charge, so it looks like they will come out OK, and dividends to unsecured creditors will be negligible”.
Chartered Surveyors, Fletcher King plc issued a profit warning today; the company had announced that performance to 30 April 2020 was not materially affected by the COVID-19 virus outbreak. However, the huge uncertainty and market dislocation caused by the current situation has had a material adverse impact on transaction-based fees. The Company has also been impacted by a severe contraction in the Professional Indemnity insurance market, particularly with regard to property valuation work, with the renewal premium more than doubled, increasing by just over £200,000 for the financial year. InfolinkGazette's Managing Director, Greg Connell, said: “property valuations are set to become extremely contentious; if The Trafford Centre was valued at £1.7 billion when it had an annual income of £85.3 million, what's it worth today if the annual income drops to £60 million, or £40 million.
Hammerson PLC continues to top the FCA Short Seller list with a total net short position in its stock of 14.29%. Eleven companies have taken a position shorting Hammerson’s stock with net short positions ranging in size from 0.6% to 4.33%. InfolinkGazette's Managing Director, Greg Connell, said: “Hammerson's rights issue should enable it to avoid breaching its banking covenants in the short term.”
Construction firm SQ-M2 Ltd went in to Administration owing £3,817,020 to 244 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “the company’s problems stem from a project involving cladding issues, arising from a cladding supplier that ultimately went in to liquidation”. Greg added: “unfortunately, insolvencies like these have a serious knock-on effect and several of SQ-M2’s unsecured creditors will be forced in to Insolvency themselves”.
Logistics firm Amco Services (International) Limited went in to Administration owing £2,561,080 to 364 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “Amco was highly leveraged but seemed to be part way through a turnaround, which was snubbed out by the widespread economic decline caused by the effects of Covid-Countermeasures.”
This is not a normal cyclical recession, it has nothing to do with interest rates/inflation, or asset bubbles, it is a recession brought about by the government shutting down the economy as part of a package of Covid-Counter measures. Normal recessions end after around 11 months as part of the same cyclical process that caused the recession to begin in the first place, or after a period of expansionary macroeconomic policy. This recession is different, it won’t end as part of a cyclical process, or after a sustained period of expansionary macroeconomic policy, it will only end when the Covid-Countermeasures cease to be in force, such as lockdowns, closures, social distancing measures etc. If the Covid-Countermeasures end soon, the recovery will more closely resemble the much hoped for V-shape, but if the Covid-Countermeasures continue to be the norm, then the recovery will be disappointingly L-shaped.
Efecte Plc issued a Positive profit warning updating its guidance for 2020 expecting SaaS net sales to grow 20-25% during 2020, instead of 15-25% as per previous guidance. InfolinkGazette's Managing Director, Greg Connell, said: “at a time when profit warning numbers are still soaring, it is good to see some positive announcements. Companies that help organisations digitalise, automate, reduce costs and improve client experiences, still have the opportunity to buck the current trend”.
Profit warnings today from Bellway p.l.c and Cairn Homes plc warning of the impact of incremental costs. InfolinkGazette's Managing Director, Greg Connell, said: “both builders would have been adversely effected by extended site durations due to reduced productivity, enhanced health and safety requirements, and additional costs associated with site closures”.
50-year-old furniture store H & H (Retail) Limited t/a Alan Ward Furniture went in to liquidation owing £2,827,670 to 183 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “traditional furniture retailers were already facing challenging market conditions from having to deal with cost pressures resulting from the weakness of Sterling and a margin squeeze from online retailers; the effects of the Covid Countermeasures will be terminal for many companies in this vulnerable sector”.
Sanderson Contracts Limited, fitted out pubs and restaurants for Premier Inns, J D Wetherspoons, and Miller and Carters but went in to Administration owing £10,325,700 to 430 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “the surviving pub and restaurant chains are putting refits on hold to conserve cash, which will be used to help deal with the fallout from Covid countermeasures”.
In a profit warning issued today, Fulham Shore PLC the operators of Franco Manca and The Real Greek restaurants, announced that 9% of the Group's restaurants will not be re-opened to dine-in customers until office workers and theatre-goers return to the City and the West End. The Board estimates that the re-opened restaurants will only be capable of operating at 60 to 70 per cent of their previous dine-in capacity due to social distancing rules. InfolinkGazette's Managing Director, Greg Connell, said: “all restaurant groups will need to make up a considerable proportion of sales lost to dine-in capacity, with takeaway deliveries if they are to remain profitable.”
Construction Partnership UK Limited, the main Contractor working on failed student development The Rise went in to Administration owing £9,911,510 to 815 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “The aged debtor analysis for Construction Partnerships reveals over £3 million owed by the main developer Hill Top Rise Ltd, who were wound up by the court on 10th June”. Greg added: “this example demonstrates the catastrophic consequences of unsecured creditor losses, whereby trade suppliers are forced out of business when a customer becomes insolvent. At InfolinkGazette, we estimate that at least 25 of Construction Partnerships sub-contractors will be forced in to insolvency by the knock-on effect of their unsecured loss. If limits are available, trade suppliers and contractors are well advised to take out credit insurance in the current environment.”
Pandemic control measures could mean it is game over for buffet style restaurant chains. HJ Tenger Holdings Limited, the operator of a chain of buffet-style Chinese restaurants went in to liquidation owing £2,932,180 to 42 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “some will adapt to the table service all you can eat style buffet but for many it will be too disruptive to their low-cost business model”.
There is a lot not to like about the controversial Go Outdoors Ltd Pre-Pack, which after being renamed GOL Realisations Ltd went in to Administration owing £27,999,000 to 590 unsecured creditors, including £15,539,239 to parent company JD Sports Fashion PLC. InfolinkGazette's Managing Director, Greg Connell, said: “Jd Sports Fashion Plc were the first charge holder and ultimate owner of Go Outdoors Ltd and as a charge holder, they were able to force their subsidiary Go Outdoors Ltd in to Insolvency by demanding repayment of loan they would have known couldn’t be repaid and effectively dump all of the restructuring costs on to creditors. Greg added: the Administrators proposal makes some vague commitment to pay suppliers of branded good in full, but go on to say that dividends to unsecured creditors will be low and paid out of the prescribed part, which would be a distribution of around £600,000”. Greg concluded by suggesting that trade suppliers to other Jd Sports subsidiaries might want to seek suitable guarantees from JD Sports before dealing on open credit terms”.
Luggage brand Antler Ltd went in to Administration owing over £1,697,010 to 89 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “The biggest losers would have been the Chinese manufacturers, with losses of over £4 million”.
Top-100 firm McMillan Williams went into administration owing £15,485,500 to 154 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “any law firm that is heavily dependent on high volume residential conveyancing work is likely to be facing severe difficulties, and those that are already highly geared are unlikely to qualify for CBILS”. Greg added: “McMillan Williams was probably number 5 in the residential conveyancing market, meaning there will be other highly exposed law firms out there”.
SPECIALIST LEISURE GROUP, known as Shearings and comprising of 8 Group companies, including Wallace Arnold went in to Administration owing over £332 million to 1021 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell, said: “travel companies have been severely impacted by the pandemic control measures, but unfortunately the loss making Group did not qualify for the Coronavirus Large Business Interruption Loan Scheme (CLBILS) ”.
No sign of positive improvement - Hays plc the UK based recruitment and human resources services provider operating across 33 countries issued a profit warning in a trading update yesterday. The company confirmed that Group fees were down 34%. InfolinkGazette's Managing Director, Greg Connell, said: “recruitment firms are a barometer for business confidence and the mercury isn’t rising, dashing hopes of a return to growth”.
The curtain has come down permanently at the Southampton Nuffield Theatre Trust t/as NST. The 50 year old theatre went in to Administration, owing £630,983 to 112 unsecured creditors InfolinkGazette's Managing Director, Greg Connell said: “NST was a major cultural institution in the region and its closure comes as result of a severe drop in ticket sales resulting from the pandemic control measures, and ongoing uncertainty over when theatres will be able to open again”.
The next big hit for the airlines will be aircraft asset impairment charges; the relatively high value of aircraft assets on the balance sheet coupled with a sharp reductions in earnings, together with a likely surplus of aircraft will result in sharp reductions in the recoverable value of aircraft. In an insolvency situation, how much is an Administrator going to be able to recover for a fleet of aircraft in the current market?
Digital Healthcare specialist Now Healthcare Group Limited went in to liquidation owing £2,921,570 to 29 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell said: “at the time of the liquidators appointment, the company was late filing its accounts and the accumulated losses in the last accounts had grown to 85% of capital”.
The government could improve supply chain resilience by being more open and transparent: HMRC keep to themselves all of the payment data on VAT and CT returns etc, only releasing a miniscule amount of their data, such as basic VAT registration details, and the deliberate tax defaulters list. Unfortunately, the government doesn’t release the abundance of useful data they own, or allow it to be shared, such as the plaintiffs in CCJ’s, late or skipped filings of VAT/CT returns and payments etc. A company may have filed its VAT return, or CT return but been unable to make the payment, and nobody other than HMRC has any visibility on the missed payment until HMRC issue a WUP. The ROI government makes all this information available, so why does the UK have to be kept at a competitive disadvantage.
Skoda and Suzuki dealer Progress Bedford Limited went in to liquidation owing £2,163,120 to 125 unsecured creditors. InfolinkGazette's Managing Director, Greg Connell said: in the accounts filing, the company paid a dividend of £500,000, five times the pre-tax profits”. Greg added: “Metro Bank appointed a Receiver to the parent company PROGRESS BEDFORD (HOLDINGS) LIMITED”.
Debenhams Retail Limited followed Debenhams PLC in to Administration, owing 1,001 UK unsecured creditors £98,306,700. InfolinkGazette's Managing Director, Greg Connell said: this will have been the third insolvency process, for Debenhams long suffering creditors. Debenhams used a controversial pre-pack in 2019, which resulted in its shares being delisted; followed by a CVA; and the present light touch Administration”.
8th July 2020 Press Release from InfolinkGazette
Delays to the UK government's £10 billion trade credit insurance scheme create a real risk to supply chains. InfolinkGazette has advised that between the furlough scheme, CIBLS, bounce back loans and the forthcoming UK government's £10 billion trade credit insurance scheme, there are sufficient government stimulus measures in place to delay the day of reckoning, in terms of rising insolvencies, at least until October or November 2020. However, all of these measures are time-critical. Whether the trade credit insurance guarantee is being delayed by EU state aid objections, or for any other reason, InfolinkGazette's Managing Director, Greg Connell, stressed that: "the delay creates a very real risk to supply chains because businesses won't be able to get the cover they need." Initially, this hit the retail and hospitality sector hardest.
8 July: A sharp increase in UK insolvencies - but not straight away. InfolinkGazette has warned that the constraints put in place by the UK government to manage the pandemic will have a significant impact on profitability and cash flow for the majority of companies in the UK, and ultimately, this will lead to a sharp increase in Insolvencies - but not necessarily straight away. Greg Connell, Managing Director of InfolinkGazette, commented: "It is likely that UK banks will demonstrate a degree of forbearance, creditors are generally less keen to force businesses into insolvency during a crisis that is likely to pass, and government stimulus measures have the potential to make a big difference." These measures will delay "the day of reckoning, in terms of rising insolvencies, at least until October or November 2020.
Chrome (Services) Limited went in to liquidation owing £2,719,410 to 300 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “there was a floating charge to a company associated with one of the directors. Creditors trading on open credit terms should always be aware of who is entitled to preferential claims in the event of an insolvency”. Greg added: “if companies associated through the directors are not lending on open terms should 3rd party creditors be granting open credit”.
Analysts assessing the Covid-19 risk by industry need to look beyond the most obvious hard hit sectors - British multinational medical equipment manufacturing company headquartered in Watford, SMITH & NEPHEW PLC issued a profit warning today confirming that trading performance across the first and second quarters was substantially down on the prior year. Greg Connell, MD of InfolinkGazette said: “in common with many companies in the medical and pharmaceutical sector, Smith and Nephew are suffering the consequences of an unprecedented decline in elective surgery”.
Unsecured Creditors of NMC Health PLC got away relatively lightly when the former FTSE 100 Group went in to Administration with losses of £2,111,410, but up to 80 international banks look set to be big losers after NMC Health’s debt ballooned from $2.1 Billion to $6.6 Billion in the space of 9 months. Greg Connell, MD of InfolinkGazette said: “if we are going to expect audit firms to detect accounting fraud, maybe we need them to have the capital buffers to be able to cover the losses associated with their errors and omissions rather than relying entirely on professional indemnity cover”.
Casual dining chain Carluccio’s went in to Administration owing £6,756,920 to 304 UK unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the ownership details were very opaque in Companies House filings, but the ultimate owner was Dubai based Landmark Group, which is one of the largest retail and hospitality organizations in the Middle East, Africa and India. What remains of Carluccio’s is now owned by Boparan Restaurant Group (BRG), who also own the Giraffe and Ed’s chains. A subsidiary of BRG paid £3.2 for the UK restaurant and another £125K for the 1 restaurant based in Dublin”.
NHS Nightingale joinery firm J & P Carpentry and Joinery Limited went in to Administration owing £2,655,860 to 120 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “possibly with an eye on a future that involved a pre-pack, a previously dormant company, with common directors, changed its name to JPC CONSTRUCTION (MIDLANDS) LTD on 4th April 2020. Greg added: despite the extra time to file, resulting from a 6 month extension to the accounting period, J & P Carpentry and Joinery Limited were 5 months overdue on their accounts filing by the time Administrators were appointed and also had faced a First Gazette notice for compulsory strike-off”.
The punishing cost of High St failure falls on Unsecured Creditors – Eponymous retailer Laura Ashley Limited went in to Administration owing £68,405,100 to 549 UK unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the brand, which began in the 1950s, quickly becoming famous for its unique printed fabrics, but will now be opening its doors for one final sale; if there is to be a future, it will be on-line only”.
Oasis Fashions Limited went in to Administration owing £7,117,970 to 227 UK Unsecured Creditors. Greg Connell, MD of InfolinkGazette said: “the online businesses of Oasis and Warehouse has been purchased by Boohoo, who raised nearly £200 million in May through a share placing, stating that company planned to use the proceeds to take advantage of any suitable merger and acquisition opportunities that may arise in the coming months”.
Environmental Consultants HOLMES ENVIRONMENTAL SERVICES LIMITED went in to liquidation owing £2,234,730 to 120 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “The company had debts of almost £1.5 million from a 2015 CVA; continuing to trade on open credit terms with a company subject to a CVA is fraught with risk for trade suppliers”.
Celebrity Chef backed Cookeze Ltd T/A Patisserie by Nigel Smith, the Lancashire based event catering business went in to Administration owing £1,486,250 to 67 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the events industry has been one of the worst effected sectors of the Covid-19 pandemic control measures, due to the complete suspension of sporting events.” Greg added: “this sector will see a second wave of failures when the government stimulus measures are withdrawn.”
High Speed 2 (HS2) bidder Van Elle issued a profit warning – such is the adverse impact of the Covid-19 outbreak on the final six weeks of the year the Van Elle board expects to report an underlying pre-tax loss for the year. Greg Connell, MD of InfolinkGazette said: “Balfour Beatty, HS2 Engineers with a combined total contract value of £5 Billion also issued a profit warning earlier this week”.
Plastic product manufacturer Braitrim (UK) Limited went in to liquidation owing £2,264,090 to 72 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “Braitrim UK was owned by Braitrim Group Limited, who are late filing their accounts”.