Accounting mistakes sent timber firm into administration

A timber firm which could trace its roots back 120 years collapsed into administration just before Christmas after it was discovered that accounting mistakes were made and two key sales personnel left to join rivals, it has emerged.

Snows Timber, which has a factory in Huthwaite, Nottinghamshire and a sales office in Towcester, Northamptonshire, slipped into administration on 18 November when Matthew Haw and Matthew Wild of RSM Restructuring Advisory were called in to oversee the day-to-day running of the firm.

The company underwent a management buyout in March last year, hailing “the start of of an exciting future”. The MBO was led by Ian Church, managing director, alongside Craig Willoughby, supply chain director and Adam Cray, finance director.

However, say administrators’ documents, it soon became apparent that things were not well with the company, which had been loss-making for some time. Key personnel left and a newly-installed finance boss found errors in the financial reporting of the company and “significant shortfalls” in its cash flow position.

Management accounts show that Snows made a loss of almost £920,000 for the six months to October 2019.

Administrators tried to find a buyer but it became apparent that the company’s cash flow was in such a parlous state that it wouldn’t have been able to trade for long enough to find one. Meanwhile, the administrators offered the “mothballed” company for sale and it is still running, albeit with a much reduced workforce as administrators look to sell off the remaining stock of the company.

Snows Timber’s secured creditor, Leumi ABL, has been paid in full, while RSM says that it expects preferential creditors to also receive the full amount owed, while unsecured creditors will receive part payment.