The failure of a Stoke haulage operator was caused by soaring fuel prices, post-pandemic supply chain issues and a £100,000 bad debt after Kenyon Road Haulage collapsed, a report has revealed.
S&L Services (Stoke) called in the administrators on 25 October after attempts to negotiate a time to pay arrangement with HMRC stalled.
By this point, the haulier, which held a standard international licence authorising 60 HGVs and 50 trailers, was running at a £1.1m loss, according to Mazars LLP.
It said the company’s management attributed this loss to supply chain issues following the Covid-19 pandemic and the war in Ukraine, which resulted in significant fuel price inflation.
Mazars added that S&L Services had failed at first to implement effective fuel price escalator mechanisms, which impacted its margin: “The losses during the period to April 2023 were incurred despite the business achieving c. £10.9m of revenue,” the administrators said.
“Given the significant finance commitments of the business and the losses incurred, it began to suffer from cash flow difficulties, which were compounded by the failure of one of its customers, Kenyon Road Haulage during March 2023 resulting in a £100k bad debt.
“These cash flow challenges resulted in the directors having to provide funding to the business during 2022 and also in arrears being built up with HMRC.”
The report added that the termination of a contract by one of its customers in early October led to 10 employees being made redundant and the remaining 23 lost their jobs on the appointment of administrators.
Trade creditors are estimated to be owed £783,000: “Assuming the realisations and expenses are as anticipated, it is unlikely that there will be sufficient funds available to allow a distribution to unsecured creditors,” Mazars said.
The post S&L Services in administration with the loss of 33 jobs appeared first on Motor Transport.