Hull-based Trans 2 Logistics was sold to Clugston Distribution Services (CDS) for £30,000 after its main contractor hit financial problems and then Covid struck its bottom line, a new report has revealed.
Administrators at Leonard Curtis said the pre-pack sale of the company, which specialised in abnormal load transport, saved all 18 jobs at the firm who transferred over to CDS under TUPE on the day it entered administration, 9 June.
Trans 2 Logistics started trading in 2015 and it held an international licence authorising 12 HGVs and 12 trailers.
According to Leonard Curtis, during the financial year ending 31 May 2019, the company traded well and secured the largest contract it had ever bid for, generating a year-end retained profit of around £118,000.
The report said: “However, the directors advised that in late 2019 site problems and adverse weather conditions resulted in the main contractor on the aforementioned contract suffering losses which left it unable to pay the company for the work it had completed.
“The directors advised that as a consequence of this the company suffered a significant loss, however, at the time it was considered that the company could survive and therefore continued trading.”
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Significant difficulties then arose due to the pandemic and Trans 2 Logistics chose to place some of its staff on furlough.
“Although the company was able to maintain trading throughout 2020, by February 2021 the directors recognised that the company’s financial position had significantly declined, and it was struggling to maintain payments to its creditors,” the report said.
Trading results for the company showed that in the year ending 31 May 2020, Trans 2 Logistics made a pre-tax loss of £192,000 on a turnover of £3.2m, compared to a pre-tax profit of £135,000 the year before.
Leonard Curtis then marketed the business for sale and it said this resulted in 11 requests for a non-disclosure agreement.
All subsequent offers were declined except for Clugston’s, which was made up of £5,000 for the goodwill, intellectual property and customer lists; £7,500 for customer contracts, forward order books and work in progress; and £17,500 for fixtures, leased assets, stock and vehicles.
“At the date of the joint administrators’ appointment unsecured creditor claims were estimated to total £502,738,” the report added.
“At present, it is considered unlikely that there will be sufficient funds available to enable any form of distribution to unsecured creditors.”
