Kent demolition firm acts in face of mounting debt.
Just as it seemed the UK demolition sector had turned a corner and was on the road to recovery, Kent-based Lee Demolition has entered into a Company Voluntary Arrangement to stave off action from a number of overdue creditors.
According to details obtained from business rescue specialists Begbies Traynor, Lee Demolition is seeking agreement from creditors to repay 23.6p in the pound over a five year period on debts on just over £3.5 million. Worst hit among creditors are likely to be NRC Plant Ltd which has debts of £98,000, City Security Guards which is owed £68,000, and Ashtead Plant which is out to the tune of £20,000. Also listed among creditors is Atlas Demolition which is owed £4,200.
According to the proposal document, the company saw profits nosedive between 2011 when it recorded profits of £1 million on a turnover of more than £11 million to last year when turnover rose to £19 million but profits fell to just £300,000. The proposal points to losses made on several key contracts including Farm Lane (£220,000), Able & Cleland (£181,000), and Turnmill (£240,000) as key factors in the company’s financial predicament.
“…The directors feel that they have become remote from the company’s operational activities and that the cost base has grown significantly as a result of the vast increase in turnover. The losses incurred recently are believed to be unusual and have been caused by inaccurate costing and poor project management…”
According to Begbies Traynor, the CVA will allow Lee Demolition to continue trading under its current name while the debts and paid off over the proposed five year period.
