Wirral steel company ceases trading with loss of majority of jobs
A £67m-turnover Wirral steel company has closed with most of the 41 staff losing their jobs.
Richard Goodall and Martyn Rickels of FRP Advisory were appointed as Joint Administrators of Atlantic Steel Processing on May 3, 2024.
Based at Vittoria Dock, Birkenhead, the company specialised in hot rolled steel and reversing mill plate processing across the North West of England.
It faced challenging trading conditions, primarily due to a reduction in demand which resulted in cash flow difficulties and impacted its ability to operate.
After an accelerated M&A process yielded no transacting partners for a going concern sale, the company ceased trading and was placed into administration as part of an orderly wind down.
The majority of employees were made redundant shortly following appointment with a small number retained temporarily to assist the Joint Administrators with the wind down process.
Richard Goodall, Director at FRP, said: “Unfortunately, mounting external pressures, most notably a reduction in demand and movements in commodity prices, resulted in the business being unable to meet its financial obligations.
“Regrettably, this meant the necessary closure of the business.
“We are now supporting the employees affected to file claims with the Redundancy Payments Services and would encourage any parties with an interest in acquiring the assets to make contact with us as soon as possible.”
The asset sale will be led by Sanderson Weatherall.
In its last accounts filed for the year ending December 31, 2022, the company revealed turnover had fallen from £71.471m in 2021 to £67.257m.
Pre-tax profits of £10.957m were compared with £15.602m the previous year.
The company described its 2022 figures as a “year of two halves”, although it said underlying demand was still “strong”.
The directors’ report revealed that most of the profit for the year was made in the first half, with prices surging in March and April as a result of uncertainties on steel availability due to the war in Ukraine.
However, shortages, never surfaced, the company said, meaning that overstocking in Q2 along with falling prices led to a “major drop off in demand into Q3”.
The report said: “Since the turn of the year mills have pushed prices up considerably as they still battle with higher energy costs and an increase to raw materials cost.
“A lot will depend on an increase to demand across all sectors as to whether these prices stick and there is a growing consensus that price stability with small, stepped increases is needed for profitable trading through 2023.”
It said it would focus on building up its balance sheet, added that, so far, customers had accepted price increases and “contracts have been completed to ensure a margin going forward”.
