Roanza, the Mercedes truck dealer that entered into administration last month, had been racking up losses for several years, according to insolvency practitioners.
The company operated across eight leasehold sites predominantly in the north west of England and employed 441 staff, including at subsidiary Premier Vehicle Rental – which entered administration on the same day, 8 September.
In a report to creditors, Jason Bell and Sarah O’Toole at Grant Thornton, said a deterioration in trading performance was driven by a reduction in bonus receipts as a result of Roanza not achieving volume sale targets.
“Whilst profit in new vehicle sales was marginal, Roanza was reliant on its bonuses to support trading performance,” the report said.
The administrators said Roanza reported a trading loss of £0.1m in 2018, which increased to a loss of £1.9m in 2019.
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“The management accounts for the five month period to 31 May 2020 indicated trading losses of c£1.3m,” it added.
Covid-19 then forced the business to close with only after sales remaining open, which was the key driver of losses during 2020.
The directors had sought to pursue a turnaround plan, but with mounting debts owed to Mercedes, HMRC and former owner and landlord RSG, it instead engaged Grant Thornton to undertake an accelerated sale.
This was achieved on the same day as the administration, after eStar Truck and Van offered to buy the business and assets of five of the trading sites, at Warrington, Stoke, Trafford Park, Wavertree and Deeside for £210,000.
The purchaser paid £110,000 on completion for plant and equipment and the remaining balance is to be paid in six months.
The administrators added that the sale was the best result for creditors, resulting in the retention of staff, continuity of trade and an agreement by eStar that it would assist with book debt collections and vehicle stock realisations.
