Gareth Roberts of KRE Corporate Recovery was appointed administrator this morning (Tuesday, 16 May). 24 of the firm's 63 staff were made redundant on appointment, including managing director Tony Chard, but the business continues to trade while a buyer is sought.
"The hope is that if we can get the customers on board, and we're already talking to them, then we would hope to complete the work in hand over the next couple of weeks, while we look for a buyer for the business," said Roberts.
According to Chard, the directors had no choice but to appoint administrators after the loss of a “major” contract that was due to be fulfilled in April/May, a tranche of work being pushed back and HMRC rejecting the company’s proposal for ‘Time to Pay’ in relation to PAYE payments.
“Up until Christmas trading was pretty strong, then we went into our traditional quiet first-quarter period, especially January/February, then we lost the major contract and at the same time we had the best part of £500,000 of booked-in jobs moving from May/June to August/September, so that all combined to create a cash gap from May to mid-August that we just couldn’t bridge,” said Chard.
“And then on top of all of that we had ongoing discussions with HMRC, who just wouldn’t play ball despite our best efforts.”
Chard said that business was up to date on HMRC payments for 2017, but had been trying to work with HMRC during the past few months on a repayment plan for outstanding payments for June to December 2016. However, HMRC rejected the application and was expected to issue a winding-up petition against Wheatons Exeter.
Polestar Stones-Wheatons was put into administration in April last year and was subsequently bought out in an MBO in June led by Richard Walsh and backed by private equity group Thames Valley Capital. The businesses were renamed Henry Stone and Wheatons Exeter. The same team subsequently bought Headley Brothers in a pre-pack administration in March this year, and the business was renamed Stones Ashford.
As separate legal entities, Henry Stone and Stones Ashford are completely unaffected by the collapse of Wheatons Exeter.
Chard praised the efforts of the Wheatons workforce in trying to overcome the “toxic legacy” of Polestar.
“We always knew it was going to be bloody tough, not helped by the fact that we lost our colour press in [last year’s] administration, so effectively we were one press, a cover press and one binding line – which we knew would make it difficult to getting the momentum going.”
Wheatons Exeter was targeting sales of £6m in the first 12 months after emerging from the shadow of Polestar. Having lost its 10-colour Manroland 700 HiPrint sheetfed press and four digital presses, including two Indigos, as part of the Polestar administration, the site is currently running a five-colour Speedmaster SM 74, 48pp Timsons ZMR book press and a 27-station Muller Martini Bolero PUR binder.
“It was always going to be a challenge, but the staff have been great, they gave it their all after the buyout last year and it was a bloody good effort by the whole team, especially after they came out of a 10-week administration. But when you get one or two bits of bad luck at the wrong time then it just runs away with you.”
The administrator took control of the site at 10am this morning, shortly after Chard spoke to staff before being made redundant.