Arctic Circle Ltd. (01857001): administration
- Status
- Administration ended
- Administration began
- 2023-02-07
- Administrators' firm
- FRP Advisory
- Formerly
- Majorspeed Limited
- Incorporated
- 1984-10-19
- Location
- Birmingham
- Industry
- 28990 Manufacture of other special-purpose machinery n.e.c.
Why it went into administration
- Creditor pressure / legal action
- Rising costs / inflation
- Loss of a key customer, supplier or contract
- Loss-making contracts / project overruns
- Management failings / irregularities
From the administrators' statement
Although the Company had built up retained earnings to March 2021 of c£2.8m, it had started to experience some difficulties through 2022 as a result of inflationary pressures, excessive stock build up due to project delays, stock control issues and the effects of a dispute with a supplier which had a material adverse impact on key customer projects which led to customer payments being withheld.
The Company had been undertaking several projects where the ultimate customer had set a maximum noise level output for the Company’s refrigeration units. The completed units did not meet the customer’s noise level requirements resulting in the customer withholding payments. Management has attributed this issue to the housing units supplied to the Company by a third-party supplier.
We are advised that the Company initially engaged with the third-party supplier to identify modifications to the design and manufacture of the housing units so that the completed units could achieve the requisite noise levels, however, the proposed approach did not achieve the required sound level results — the customer continued to withhold payments to the Company resulting in the Company, in turn, withholding payments to the supplier.
Administrators' statement of proposals (2023-04-03) · Companies House register