Haulier’s financial crash causes 61 redundancies

Logistics group Contact Transport has crashed into administration, with 61 staff made redundant.

However 79 staff have been transferred over to an agency acting for a single customer as part of the alternative arrangements made following the company’s collapse.

The third-party logistics business operated nationally from its headquarters in Garretts Green, Birmingham. It was founded in 1980 and grew to a fleet of more than 600 vehicles, with about 250 direct employees in 2015.

However it was forced to appoint Diana Frangou and Guy Mander from RSM as joint administrators on Thursday.

Contact Transport had previously been through a company voluntary arrangement (CVA) which hampered its attempts to keep the business running.

The administrators said the company suffered losses following a drop in turnover volumes, high vehicle damage and insurance costs, and costs incurred in restructuring the business.

It was unable to raise additional working capital or funding to meet its creditors, and had been served with a winding-up petition by one of its suppliers.

“With cash flow constraints impacting upon the company’s trade, steps have been taken to protect its assets by way of an Administration Order,” said Frangou.

Contact Transport has endured a difficult few years, having spent four years repaying creditors through a company voluntary arrangement (CVA).

It entered the CVA in September 2011 and agreed to pay back £1.5m – split £25,000 a month for five years – which was reduced in November 2013 to £10,000 a month.

A further variation, in March 2015, agreed a final one-off payment of £200,000. The company exited the CVA in July 2015, having paid £930,000.

At that point, the company believed its performance would “continue to improve in the medium to long term” and was focusing on its final mile offering.

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