Steep sales decline caused Ascot’s demise

THE failure of Radcliffe-based green technology firm Ascot Environmental has been blamed on “a reduction in contracting revenue”, which led to pressure for payment being demanded from creditors.

A new report into the affairs of the collapsed firm’s parent company, UK Capital Ventures Holdings, showed that its sales had fallen from a peak of almost £69m in the year to March 2009 to £39.3m in 2010 and £29.1m in 2011. Pro-forma accounts for the 10 months to January 2012 showed sales of £23.7m.

Both the company’s bank, Barclays, and its owner, Jim, Hennessy, had injected cash into the business in September 2011, but the company continued to experience trading problems.

Restructuring experts from Deloitte who had been called in by the bank to review the business stated that the company needed a further £3m “to fund the group’s medium-term stability”.

However, although they considered pumping more money into the business, the report states that “additional creditor pressure” and a requirement for more funding from its Scotgen waste-to-energy plant in Dumfries meant they decided against it.

Ascot Environmental was set up by Mr Hennessy in 1999. A growing demand for the company’s expertise in building waste-to-energy plants saw sales climb rapidly, peaking at £64.8m in 2009, when it made a pre-tax profit of £1.9m. The company’s parent firm, UK Capital Ventures, also owned the Scotgen waste-to-energy plant in Dumfries.

Administrators said that marketing of both Scotgen and Ascot Environmental were attempted prior to administration. Although a buyer was found for Scotgen – it was sold to a company run by its the same directors in a £1m deal – no offers were received for Ascot Environmental. This meant that the firm was closed on appointment, with all 59 members of staff laid off.

Contracts had also largely been wound down prior to Deloitte’s appoiment as administrators on May 18, and an inter-company debt of £27m owed by Scotgen to Ascot Environmental was waived to allow for the business to continue trading.

Early indications are that Barclays, which was owed £6.8m by UK Capital Ventures Holdings, is facing a loss of £5.8m. Unsecured creditors are not expected to receive anything.