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4th August, 2020
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Keith Steven

Written ByKeith Steven

Managing Director


07879 555349

Keith is the author of the content on this comprehensive rescue, turnaround and insolvency website. He has expert knowledge on the company voluntary arrangement (CVA) mechanism

Keith Steven
  • Having difficulty getting Construction Loans or Finance?

Having difficulty getting Construction Loans or Finance?

Every business is different, however there are particular issues that construction businesses face which are unique to the sector.

Often with low margins and tough trading conditions, cash flow can be a problem. Below is a list of problems we’ve seen happen in the industry:

  • Retention sums not released at agreed times
  • Delays in repayments from HMRC, regarding CIS deductions (which are connected to PAYE scheme). HMRC can be slow in making CIS refunds, leading to issues with cash flow.
  • Loss of large contracts
  • Issues with sub-contractors
  • Difficult customers
  • Lengthy contracts with prices agreed at beginning. I.e. quotes do not keep up with rising costs.
  • Less focus on financial accounts due to management being onsite
  • Hard to find new contracts if cash flow is tight, perhaps due to low credit rating

It might be that an additional loan is not what is required….  As turnaround practitioners, our specialists can help tackle these issues with you to get your construction business back on track. We can go through all the available options, like expert assessment of the issues your company faces, improved financial reporting,  Time to Pay deals, CVAs and pre-pack administrations.  We can also find finance for construction companies in distress.

We also have industry specific turnaround experts who can act as non executive directors, chairman or turnaround managers.  We have turned around construction companies from £500k to £25m sales.

Call us on 0800 9700539 for free expert advice and a talk through your options. We can visit you onsite to discuss your specific situation.

superdry logo

Superdry Maybe Looking At A CVA

Update : 15 April 2024It hits the news today that landlords of Superdry are considering a restructuring deal that would result in steep rent cuts at a large proportion of its 94 British shops. The scale of the rent cuts would be dependent on the financial performance of each site.According to City sources, the fashion retailer is not planning on any permanent closures, but landlords would have the option to terminate any leases if they were not satisfied with the terms of the deal.Superdry has been facing red for some time. Most recently there were talks with founder, Julian Dunkerton regarding a takeover, but such talks were then aborted.Sky News share more. Update : 29 January 2024In line with other retailers Superdry has been finding trading difficult due to the cost of living crisis.  It has also been cutting back its store count. The clothing brand has 104 stores in the UK and started closing some back in July 2023.  The company also announced that it was looking at costs savings of some £40m.  This is an increase from the £35m they announced recently.  There are now rumours circulating that the company is looking at a Company Voluntary Arrangement (CVA) as a way of cutting costs.The CVA is a powerful rescue tool that is particularly favoured by retailers due to is ability to allow companies to vacate properties and determine their lease obligations.  The cost of high rent shops on long leases can be a heavy burden on retailers.The following case law has been used for some years now to terminate leases with no cash cost to the company.Re: Doorbar v Alltime Securities Ltd (1995) BCC 1149 stated that landlords can be bound by voluntary arrangements for future obligations under a lease.Re: Cancol Ltd (1995) BCC 1133 that the word ‘creditor’ in r1.17(1) IR 86 was wide enough to include a landlord with a right to future rent i.e. the ability to include future rent extends to CVAs as well as Individual Voluntary Arrangements.Furthermore, where the unliquidated or unascertained claim in a CVA involves future rents accruing to a landlord, the case of Re Park Air Services [1996] BCC 556) gives the CVA meeting   chairman some considerable guidance as to quantifying the claim at the meeting.Another reason that Superdry is finding itself in difficulty is that it rapidly expanded to try and become a global super brand.  No doubt much of this expanision was fueled by cheap debt and as many companies are now finding out when interest rates rise and customers pull back the going gets very tough.  As such the shares have lost almost 90% of their value in the last 12 monthsSky News has reported that PWC are the advisors that are looking at restructuring options.It is quite standard practice to put out stories about a possible CVA as this does prepare the ground for negotiations with landlords.  They will be asking the landlords for substantial rent reductions in order for them to survive.  If landlords refuse then they can usually get other suppliers and trade creditors to support a CVA proposal and out vote them.Landlords have tried to challenge CVAs in the courts on the grounds that they unfairly prejudice their position but have so far failed to succeed. 

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Superdry Maybe Looking At A CVA

Administration for Torquay United

in News

Devon based, Torquay United, of the National League South, have formally gone into administration. This comes following the deadline which passed on Thursday for any potential bidders to bring some saviour capital. Clarke Osborne, owner, announced his intention to appoint administrators for the club in February, two months later and the intention was made a reality. In March the Gulls faced a 10 point deduction so there will be no further sanction. This paves a more positive outlook despite the situation, particularly as administrators are said to be in talks with interested parties already. Begbies Traynor', Scott Kippax, Neil Vinnicombe and Simon Haskew, will be handling the administration process. In the meantime, the club will be run by directors, George Edwards and Mel Hayman, on a voluntary basis. As for any creditors, the club secretary is contactable directly. "A further announcement is anticipated within the next two weeks when the administrators hope to confirm that the club's future has been secured." Will it be the final whistle? Devon Live shares more and Torquay United answer FAQs for fans, on their website.

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Administration for Torquay United

Notts County Administration Threat

Article Originally published in February 2019 The worlds oldest football league club, Notts County, risk going into administration, according to an exclusive Sky Sports News report. The club are five points from safety of the league, with a financial crisis giving their future many red cards. Chairman, Alan Hardy brought the club in January 2017, and put it up for sale just last month. To purchase the club, it has been revealed that Hardy used a loan from his interior design company, Paragon. The recent accounts posted on Companies House in June 2017, refer to a ‘related party debt’, of £7m, for Paragon Interiors Group – the value of the funds used to buy the club. Paragons business situation stresses administration, with the company already stopping work on numerous projects, advising customers they will hope to catch up in March. If the business call in administrators, the debt from Notts County is likely to be demanded, leaving huge doubt for the football clubs finances and future. Supporters to the club have watched them loose their league two play-off semi final to Coventry in May…thinking that was bad, they now watch them face relegation for the first time of the 157-years of existence. Will the final whistle be blown? Is this the end?

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Notts County Administration Threat
ted baker

15 UK Stores to Close and 245 Jobs Lost for Ted Baker

08th April 2024Administrators announce that Ted Baker is to close 15 UK stores (of which ''have no prospect of being returned to profitability, even with material rent reductions") and cut 245 jobs.Of this, 11 stores will close by 19 April, resulting in the loss of 120 jobs.Then 25 roles from head office will go along with a further 4 stores, impacting the remaining 100 jobs.For the full list of closing stores:Birmingham Bullring Bristol Bromley Cambridge Exeter Leeds Liverpool One London Bridge Milton Keynes Nottingham Oxford Bicester London Brompton Road London Floral Street Manchester Trafford 22nd March 2024Teneo has been appointed as administrator of No Ordinary Designer Label (NODL) Limited - the company of which runs 46 Ted Baker stores in the UK along with a website and concessions.NODL has approx. 975 employees.Authentic Brands, which licenses the Ted Baker brand to the NODL, is in advanced discussions with potential buyers for the company.Reported reasons for the appointment of administrators are the struggles the firm faced following damage done during a partnership and a high level of arrears built up during a partnership with AARC Group. At the end of January 2024 AARC and NODL cut ties. 19th March 2024 It has been reported that Ted Baker, the clothing retailer, has filed a Notice of Intention to Appoint Administrators. This move is designed to give it a chance of recovery by protecting it from creditors legal actions for a 10 day period.  An injection of capital or a sale is hoped to be achieved during this period.A filed winding up petition (subsequently withdrawn) forced Ted Baker's hand.This latest move comes after the company delisted from the Stock Exchange and was sold to US-based Authentic Brands Group (ABG) for a knockdown price of £210m.  This follows a similar pattern to The Body Shop that was also bought out by private equity and then months later went into administration. Why don't these companies consider using a CVA to lower their debt? The likely reason is that these companies have been loaded with lots of secure debt which cannot be compromised by a CVA.  Property costs, HMRC, and suppliers are unsecured and can be bound by the terms of a CVA.  So, in essence, it wasn't expensive shop premises that have caused problems but indebtness.Ted Baker has suffered, like many other retailers, by the lockdowns, cost of living crisis and has borrowed money to try and survive.John McNamara, chief strategy officer for Authentic Brands Group, said: “We wish that there could have been a better outcome for the Ted Baker employees and stakeholders. We remain focused on securing a new partner to uphold and grow the Ted Baker brand in the UK and Europe where it began.”The company employs more than 900 staff and currently operates 46 stores across the country, as well as online and through department store concessions.There has not been an announcement on any redundancies yet.

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15 UK Stores to Close and 245 Jobs Lost for Ted Baker

Monthly Insolvency Statistics: February 2024

in Research and Statistics

The second monthly insolvency statistics have been released for 2024, focusing on February. Here we provide a detailed overview. Company Insolvencies February 2024 saw 2,102 registered company insolvencies through England and Wales. This is an increase of 17% when compared to the amount registered in the same month of 2023. It is also higher compared to January 2024 figures and that when Government support measures were in place in response to the COVID-19 pandemic.The company insolvencies for February 2024 consisted of:1,707 Creditors Voluntary Liquidations (CVLs) – 12% higher than in February 2023 217 Compulsory Liquidations – 35% higher than in February 2023 166 Administrations – 54% higher than in February 2023 12 Company Voluntary Arrangements (CVAs) – identical to the amount in February 2023There were no receiverships registered.A higher number of Compulsory Liquidations, CVLs and Administrations seem to be the driving force of the increase in company insolvency statistics compared to February 2023.It is important to note that now, company insolvency numbers have returned to and exceeded pre-pandemic levels.Between 26 June 2020 and 29 February 2024, 52 moratoriums were obtained in England & Wales, along with 22 companies having a restructuring plan registered at Companies House.Moving on to the statistics for Scotland and February 2024 saw 94 registered company insolvencies – quite similar to the levels noted in January 2024. Compared to February 2023 figures, the same month of 2024 saw an increase of 9% in registered company insolvencies. February 2024 figures are made up of 58 CVLs, 33 compulsory liquidations and 3 administrations. No CVAs or receiverships were recorded.Historically, compulsory liquidations have led the way for the company insolvencies in Scotland. But since April 2020, CVL numbers remained higher than compulsory liquidation numbers.Between 26 June 2020 and 29 February 2024, no moratoriums were obtained for companies in Scotland. Two companies did register a restructuring plan at Companies House.For Northern Ireland, 26 company insolvencies were registered in February 2024 – this being twice as many as recorded in February 2024. Registrations consisted of 14 compulsory liquidations, 9 CVLs, 3 administrations. No receiverships or CVAs were recorded for this period. Individual Insolvencies England and Wales had 10,136 Individual Insolvencies registered in February 2024. This is 23% more than what was registered in February 2023 and also a significant rise compared to January 2024. It is thought that the reason for the increase is the all tools; DROs, bankruptcies and IVAs, saw an increase in this period.Delving deeper, the registrations are broken up into:3,007 Debt Relief Orders (DROs) – 44% higher than in February 2023 6,420 Individual Voluntary Arrangements (IVAs) – 16% higher than in February 2023 – an unusually high amount due to some IVAs being registered only now, but approved 2 or more months earlier 709 Bankruptcies (split as 594 debtor applications and 115 creditor petitions) – 16% higher than in February 2023Northern Ireland had 112 Individual Insolvencies registered in February 2024 – identical to the amount noted in January 2024. Numbers are made up of 90 IVAs, 11 DROs and 21 bankruptcies. Total numbers are 13% lower than the same month a year previous. Comparing to pre-pandemic levels, since March 2020, levels of individual insolvencies have been lower in Northern Ireland.You can refer to the full report here.

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Monthly Insolvency Statistics: February 2024

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