Albert & Michael Heath Limited (00903241): administration
- Status
- Administration ended
- Administration began
- 2017-01-03
- Administrators
- Tony Mitchell, Brett Barton
- Administrators' firm
- Cranfield Business Recovery
- Incorporated
- 1967-04-11
- Location
- Coventry
- Industry
- 46130 Agents involved in the sale of timber and building materials
Why it went into administration
- Sustained trading losses
- Credit insurance / supplier credit withdrawn
- Competition / price pressure
From the administrators' statement
The business was founded by Mr Albert Heath and commenced trading as Albert A. Heath Tiles & Co in 1965 before Albert's youngest son, Michael, joined the business and they commenced trading under the name Albert & Michael Heath in 1966. The Company was subsequently incorporated on 11 April 1967. The principal activity of the Company is that of suppliers of tiles. The Company moved from its former city centre site to its current location in 2003, which enabled the Company to incorporate a large showroom in conjunction with an expansion into the bathroom market. The retail showroom adopted the trading style “Tubs & Tiles”.
The Company initially traded successfully from its new premises, but its revenue was significantly affected from 2008 onwards following the onset of the recession. In addition to a marked drop in turnover between 2007 and 2010, the directors have advised that an intensely competitive market resulted in gross margins reducing from 31.2% to 26.5% during the same period. More recently, as a consequence of the Company sourcing a significant quantity of its products ftom Europe, the deterioration in the exchange rate has reduced further the gross profit margin.
Despite various cost saving measures, including the reduction of its workforce, the Company had suffered severe losses that contributed to a deterioration in the cash flow position. Suppliers reduced their credit terms, with the Company having to operate on a pro-forma basis with many. Whilst turnover had stabilised during 2009 — 2014, it subsequently fell from £1.9m in 2014 to £1.5m in 2015. The directors consider this to be primarily result of an ailing product range and the inability to refresh it because of the Company's credit limits and terms with its suppliers. In August 2015 the Company benefited from a significant injection of funds, but it proved insufficient to refresh the stock adequately. Therefore the directors considered the sale of the Company, but a willing buyer of its shares could not be identified despite some interest in the business and assets of the Company.
Administrators' statement of proposals (2017-01-19) · Companies House register