What is Company Administration (video)

A Chesterfield machine tool manufacturer, which supplies to the global automotive industry, has been bought out of administration by sister-company, Peak Toolmakers (Assets) Ltd and managed by two of its current directors, saving all 46 jobs.

Peak Toolmakers Limited, based on Chesterfield Trading Centre on Smeckley Wood Close, had enjoyed a profitable trading history since 2004 and had significantly grown to become a recognised name in the sector.

However, a lack of working capital following a combination of factors together with a number of loss-making contracts with principal customers, competition from overseas, namely the Far East, undercutting prices, and extremely fast and tight timescales to allow its customers to meet contractual supply arrangements, had caused recent cash flow problems.

Insolvency practitioners Joanne Wright and Lisa Hogg from Wilson Field were appointed Administrators on 2 September 2015 to handle the sale out of administration.

The business and assets bought by Peak Toolmakers (Assets) Ltd managed by two of the existing directors, Geoff Bacon and John Buxton.

Joanne Wright from Wilson Field, said:

“Peak Toolmakers Limited had experienced financial difficulties after seeing a drop in demand from a major customer, a loss of more than £500,000 on a contract and was being threatened by enforcement action from HMRC due to arrears.

“The pre-pack deal has meant all 46 employees’ jobs have been saved and ensures a continuity of trading under new ownership.

“We are delighted to have secured a swift sale of this established Chesterfield-based manufacturing business to deliver the best long term solution for the business ensuring it can continue to serve its established customer base.”

Peak Toolmakers Limited’s main business was the production of mould tooling, jigs and fixtures and robot heads which were used in the injection moulding and die casting industries, principally the automotive industry, for internal and external trims together with under bonnet components.

Its customers produce products for a range of automotive manufacturers including Jaguar Land Rover, Nissan, Toyota, BMW and similar manufacturers.

Director Geoff Bacon said:

“Having gone through difficult times, we are very happy to have secured the loyal service of our staff through the help of Wilson Field.”

Wilson Field worked closely with solicitor Neil Kelly from MD Law in Sheffield and valuer and asset management consultant David Smith of Charterfields.

A Middlesex postal service company, whose facilities could handle around 30 tonnes of post a day, has been bought out of administration saving all 25 jobs.

The 13-year-old business, which initially traded as a consultancy service supplying postal services to UK-based wholesale mail companies, has been acquired by an associated company Direct Entry Solutions Worldwide Ltd and will be operated by the existing management team.

Joint administrators Kelly Burton and Lisa Hogg of insolvency and business turnaround specialist Wilson Field were appointed to Direct Entry Solutions on 25 January.

The company had experienced a difficult trading period after diversifying from its core offering to incorporate the physical sorting of post along with returned mail management and various other mail processing services. This resulted in possible enforcement action by creditors including HMRC and the Austrian postal company Osterreichische Post.

The total value of the pre-pack administration deal is undisclosed but it includes the business and the assets of the company based on Stockley Close in West Drayton.

Kelly Burton, director and insolvency practitioner at Wilson Field in Leeds, said;

“The consequences of switching from a consultancy to processing mail involved significant investment and consequential increased ongoing costs.

“The company required a large boost in the staffing levels, a bigger premises in a more suitable location, relevant machinery and equipment for the warehouse operatives, in addition to large injections of cash.

“A number of onerous contracts also caused a pressure on cash flow and a build-up of historical debt.

“Our actions have secured all 25 jobs and brought about a better return to creditors. As the jobs were transferred to Direct Entry Solutions Worldwide, this alone saved over £27,000 in redundancy and wages.

“From what was a difficult situation has emerged a better result for creditors and staff.”

Sheffield administrators Wilson Field has helped save all 14 jobs at a Lancashire packaging supplier and manufacturer after it was bought out of administration.

Administrators Kelly Burton and Joanne Wright from business turnaround experts Wilson Field were appointed joint administrators on 17 February after Principal Packaging Ltd suffered cash flow problems.

The company, based at Pit Hey Place in Skelmersdale, was one of the main independent providers of quality packaging for the retail food industry, and major food and dairy suppliers.

Directors Tracy and Richard Sharratt took early advice and the business was sold to new company Surepac Ltd as a going concern saving all 14 employees’ jobs.

Kelly Burton from Wilson Field said:

“Historically, the company offered a holding service to its customers. This meant that it held a significant amount of stock at any one time, which tied up a substantial amount of cash.

“This created cash flow problems and was exacerbated in the early part of 2016 when the amount available on the company’s funding facility was reduced.

“Directors took early advice from Wilson Field with the business sold to Surepac Ltd as a going concern, safeguarding all 14 employees’ jobs. The new company will offer the same service and standards and will operate under the same management team”.

Principal Packaging, started in 2006, served packaging needs for meat, fish, horticulture and poultry sectors throughout the United Kingdom and Ireland and traded successfully in the early years.

It gained a reputation for being one of the most professional, yet affordable, companies in a competitive market with its high-quality paper, plastic or board packaging, custom print services and high customer service levels.