Redundancies as steel foundry goes into administration

30 JOBS have been made redundant at a steel casting foundry after a buyer could not be found for the Doncaster-based, Finance Yorkshire-backed business.

Director Noel Village (Steel Founder) Limited, which said it was “world-leading” in weld-free castings, appointed joint administrators Howard Smith and Jonny Marston on 15 December 2016.

The decision was made on 19 December 2016 to cease trading at Noel Village.

Eight employees have been retained to assist administrators with a controlled wind down of the business and to assist with realising the Company’s assets. 30 employees were made redundant.

In its most recent accounts for the year to 31 March 2015, which were published in January 2016, the company said that their industry had been challenging since the Deep Water Horizon disaster in 2011, exacerbated by the downturn in the oil and gas sector.

It turned over £5.6m that year, nearly half the £10.9m it had made in the preceding year due to a reduction in order intake.

Losses had declined slightly to £1.1m from £1.4m the year before. Corporation tax had more than tripled in 2015 to £732,275, from £155,000 the year before. 

By September 2015 the company had made 15 employees redundant.

However at the time it said that it was researching new markets and that it was in a stronger position that it had been the year before, having built up “sufficient resilience” to withstand the challenges in its industry.

It was backed by a £750,000 investment from Finance Yorkshire in January 2014 which it planned to spend on new heat treatment facilities

Joint administrator Howard Smith said: “A lack of capital investment in the oil and gas industry has reduced demand for steel products in recent years and put significant cashflow pressure on steel foundries like Noel Village. Excess capacity in the steel market has created challenging trading conditions and limited options to sell the business or maintain it as a going concern.

“We are working closely with the employees affected by the administration to help them through this difficult time.”

 Finance Yorkshire invested in Noel Village from its Equity Linked Fund.

Alex McWhirter, chief executive of Finance Yorkshire, said: “It is unfortunate to see Noel Village in this position. We invested in the company at a time when it was an established business showing further growth potential.

“We have worked with the management team to preserve the business which has struggled against the continued fall in oil prices and a decline in orders.

“All of our investments carry an element of risk and it is inevitable that a small number of businesses will run into difficulties.

“In terms of our investments overall, Finance Yorkshire continues to make healthy returns.”