Administrators’ report lays bare the failure of £100m-turnover group
LAIDLAW Interiors Group left behind debts of £16m that will remain unpaid following its collapse in December which resulted in the loss of 400 jobs.
The group, which had extensive operations in Willenhall and Birmingham, had nearly 1,000 employees and an annualised turnover of about £100m when it was forced to appoint Deloitte restructuring partners Richard Hawes and Clare Boardman as administrators a week before Christmas.
Their report, which has just been released, showed the group had been struggling for some time. Average monthly sales had fallen 16% in two years while its losses, before interest, tax, depreciation and amortisation, totalled more than £34m for the 37 months before the group’s failure.
The largest business in the group, Leaderflush Shapland, had secured substantial supply contracts in 2014, but delays to its start and progress put the entire group, which was financially interdependent, under greater pressure.
Attempts to improve the group’s financial position included the sale and leaseback of its Langley Mill site, the conversion of £27m of shareholder loans into share capital, the injection of a further £2m by owners Rutland and Lloyds Bank increased its facilities by £1m.
But Rutland and Lloyds Bank were unwilling to put in the £7m it was estimated to cover the next three months and a sales process was started last November. However on December 8 HMRC refused a time to pay agreement and the following day directors filed notices to appoint administrators.
Pre-pack deals for four of the group’s seven trading divisions and the sale of a fifth division saved 525 jobs.
On December 18, Valtegra paid £2.22m for three divisions of Interiors Manufacturing – Birmingham-based Komfort, along with Fitzpatrick and Cubicles – and Sheffield-based Longden, which was part of Leaderflush Shapland.
The £1.46m sale of Willenhall-based Laidlaw Ironmongery and Balustrading Solutions to Intrinsic was agreed on January 6.
The doors division, Leaderflush Shapland Doors, ceased trading when the administrators took control, with its IP and the plant and machinery held in its Mansfield factory sold for £650,000 on January 13 to Fire Doors Inspection Solutions.
Lloyds Bank had lent £8.2m through its corporate finance division – more than 90% of which was secured through invoice discounting facility – and a £6m loan, which was guaranteed by the group’s shareholder Rutland Partners.
Lloyds Bank is expected to recover all of its money, while Rutland will receive about two-thirds, about £3.87m, of its investment.
About £40,000 of the £104,000 owed to preferential creditors will be paid, and £48,000 of £14.2m owed to unsecured creditors.
Deloitte expects to draw two-thirds of its estimated £1.8m fees, which have been generated by hourly rates of up to £760. Other professional fees wil add up to another £500,000.
Laidlaw Interiors Group was created in July 2011 to combine companies which supplied interiors construction products and before it collapsed had been reorganised into two main parts.
Interiors Manufacturing (IML) had been created as the vehicle for the purchase of Laidlaw (UK) and for trade and assets from SIG Manufacturing Group. It manufactured and sold door sets, partitions, washrooms and glazing products.
Leaderflush Shapland, which had been bought in September 2011, also manufactured door sets, alongside woodworking products, and distributed ironmongery.
