In 2008 the company’s biggest client announced that it would be closing its Dartford premises, resulting in our client losing 80% of its turnover. In July 2011 our client’s main customer, who had replaced much of the work of the previous large client went into voluntary liquidation leaving our client with a bad debt of approximately £100,000. The loss of work with HS Environmental also resulted in a loss of some £250,000 in work in progress.
Prior to this, the previous year’s turnover was circa £3 million.
As a direct consequence of the loss of a major contract and the demise of our client’s newest largest acquisition, the Company’s finances had been fully depleted and cash flow was under pressure. This also means that our client couldn’t take advantage of the considerable amount of work available. The company currently had work in progress of some £73,000 and a confirmed order book of £700,000.
In September 2011, the Directors sought the advice of Beer & Young Ltd who recommended that they make a proposal to creditors for a Company Voluntary Arrangement. Beer & Young Ltd were engaged to assist the Directors with the preparation of this proposal, which proposed payments over 5 years which anticipated a dividend at a rate of 96p in the £1. The CVA was duly approved by creditors.