Sephton Transport Limited (04081116): administration
- Status
- Administration ended
- Administration began
- 2018-10-05
- Administrators
- Michael Christian Kienlen, Robert David Adamson
- Administrators' firm
- Moorfields
- Incorporated
- 2000-09-29
- Location
- Leeds
- Industry
- 49410 Freight transport by road
Why it went into administration
- Creditor pressure / legal action
- Supply chain disruption
- Energy costs
- Funding withdrawn / unable to refinance
- Cash flow / liquidity pressure
- Loss of a key customer, supplier or contract
- Competition / price pressure
From the administrators' statement
The Company was incorporated on 29 September 2000 and operates as a freight transport business from leasehold premises owned by a connected company, Sephton Properties Limited. It employs 25 staff including the Director and his wife (also a former Director).
Trading has been profitable for a number of years however in November 2014 the Company’s existing landlords gave notice that they intended to develop the site and that they were not renewing the Company's lease. As the Company were unable to find a suitable alternative, the Director engaged a local Property Developer to build a new facility with the financial help of the Bank. In order to afford this project, the Company required a loan of 80% of the purchase price and the Bank offered 70% on a mortgage and a further 10% on a five year loan. This lending was provided to the Director's connected company, Sephton Properties Limited (“Properties”). Due to a less than favourable valuation caused by the lack of comparables in the area, the Company needed to transfer certain costs from the build and to fund. them outside of the mortgage, using higher interest short term finance, which were all funded through the Company rather than Properties.
This additional short term finance had an adverse impact on the Company’s cash flow position, which has gradually deteriorated over the following years. Although this was manageable in the first instance, it became an issue when the Company needed to renew its ageing fleet. Off the back of this, the Director sought advice from the Company’s accountants, who reviewed the cash flow forecasts. This identified that the position would deteriorate further before improving at the end of the year.
Administrators' statement of proposals (2018-10-25) · Companies House register