Premier Logistics (UK) made £2m loss after CVA

Premier Logistics (UK) made a £2m loss in the months following its company voluntary agreement (CVA), according to its most recent financial results.

The struggling haulier restructured its finances in 2018 via a CVA in the face of a £5.7m shortfall to its creditors.

Under the terms of the agreement, Premier Logistics (UK) will make monthly contributions for up to five years, totalling £2,040,000.

For the 10-month period ending 31 October 2018, the company’s turnover was almost £10m, but it made a pre-tax loss of £2m.

This compared with a £9.6m turnover and a £191,000 pre-tax profit in the eight months ending 31 December 2017.

In its review of the business, the company explained that the losses were caused in part as a result of the closure and subsequent liquidation of subsidiary MWC Logistics.

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“The company had to write off amounts owed to MWC Logistics in the amount of £451,842,” it said.

“This bad debt together with guarantees given by the company to MWC Logistics meant that the company was unable to service its creditors and as such requested support from its creditors in July 2018 and formally entered into a CVA on 30 July 2018.”

It added: “During the negotiations with creditors the company took the decision, as part of restructuring the business to enable the sustainability of the company going forward, to cancel certain supplier contracts for which the company incurred additional costs and penalties, which compounded losses even further.”

Premier Logistics (UK) said that service to customers was unaffected during the period and they continued to be supportive to the business.

It added that its forecasts showed the company could continue to trade profitably and in accordance with its obligations of the CVA.

The company did not respond as we went to press.