Procurement outsourcing firm bought out of administration
Optimum Procurement Group, a procurement outsourcing and consulting company with clients across the UK, Europe and the Middle East, has been sold out of administration to its former directors.
Administrators Paul Flint, David Costley-Wood and Paul Dumbell of KPMG were appointed to the Wythenshawe-based company on January 31.
Immediately following the appointment of administrators, the business and certain assets of the company were sold to Optimum Procurement Ltd, whose directors Peter Rushton and Mike Jones were also the directors of previous company. All 15 employees have transferred via TUPE to Optimum Procurement Ltd.
The company manages more than 200 categories of expenditure and is responsible for over $1bn of annualised client spend, according to its website.
Services include independent vehicle fleet management outsourcing and energy saving services for businesses, with more than 200 energy procurement and management clients.
Optimum Procurement began to face financial difficulties in late 2015 and early 2016 after losing two significant client contracts, its administrators said.
In a statement they added: “It attempted to cut costs and secure new work to replace the lost contracts but despite having a strong pipeline, was unable to convert these opportunities into revenue generating work quickly enough to replace the lost revenue.
“In addition, payments that were due from the company’s existing client base were delayed, and a substantial contractual payment was withheld, further exacerbating the pressure on the company’s cashflow, ultimately resulting in its failure.”
Paul Flint, associate partner at KPMG and joint administrator, added: “The administration demonstrates the financial vulnerability that some businesses face if contracts are lost and the subsequent cashflow pressures that such a scenario can bring. This transaction has saved jobs and realises value of the business and its assets for creditors.”
Optimum Procurement Group was set up in 2007 by Rushton, chief executive, and managing director Jones, with each holding a 50% share.
Rushton was previously the co-founder and managing director of Xchanging Procurement Services (XPS), responsible for an international team of 200 staff and annual revenues of £170m, and has also headed the procurement function at both Caradon and British Sugar.
Jones, meanwhile, has 28 years’ business experience in delivering cost reduction and process improvement and has held senior posts in industry, at another outsourcing company and a Big Four consultancy.
The company’s 2015 accounts have not been filed and the last available abbreviated accounts for the year to the end of December 2014, showed the company to have net assets of around £500,000.
