Canute Group has been forced to reassure staff that the business will endure after a delay in paying wages earlier this month.
In a letter to employees, seen by MT, Canute director Noel Marshall attributed staff payment delays to problems arising from the company’s decision to switch banks earlier this year, which “proved to be the wrong choice”.
The subsequent move to a new lender to address this is understood to have resulted in a delay in staff being paid, albeit only by a few hours.
In the letter Marshall added that the first bank had “failed to correctly understand the nature of our workflow and the cash management processes”.
He said that the move had, at the time, caused “considerable disruption to both staff and suppliers” and “resulted in unwarranted speculation” about the company’s stability.
The letter comes after MT became aware that eight O-licence applications have been made by recently formed company Almtone. The applications give Canute’s Gamston depot as the company’s address and list Canute director Glenn Marshall as transport manager.
Addressing this, Marshall said in the letter that the company’s previous funder had obliged Canute to apply for “a number of changes to be made to our O-licences and structures.
“This has now come out into the public domain and nobody should be alarmed about this process.”
Marshall added that the transition between funders meant Canute was still experiencing “some temporary supplier disruption” but he assured staff there would be no further delays to wages.
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Canute’s most recently published accounts, for the year to 31 July 2016, show an annual turnover of £106m (2015: £100m) but a pre-tax loss of £442,000 (2015: loss of £236,000).
Speaking to MT, Canute Group sales director David Emslie conceded that the past two months had been “a particular difficult period”.
He added that the group’s choice of a previous funding partner resulted in “a damaging change that affected many long-term supplier relationships and brought about unwarranted speculation about our stability”.
Emslie said that the new funder “understands the nuances of the business and will work with us to provide a meaningful strategy for the future, leaving our team to focus on continuity of service and meaningful growth”.
Referring to “current damaging rumours about the group”, he said that speculation of a take-over by Eddie Stobart is “unfounded”.
In its full-year results released last week, Eddie Stobart revealed that it had bought Canute’s building materials division for £1, taking on £12m of debt and assets in the process. The deal, completed in August 2017, saw 38 tractors and tankers, 53 trailers, approximately 50 employees and the licence to occupy a Brentwood, Essex address, transfer to Eddie Stobart.
Last year, Canute ended its 29-year relationship with national retailer Wilko after Wincanton won a five-year deal to manage its transport operations.
