Car transporter company Drive Force (UK) had only just returned to profitability after experiencing 18 months of cash flow difficulties, before Covid-19 forced it into administration.
The detail is included in a report to creditors explaining how the Avonmouth-based business, which had been trading since 1999, was forced to close its doors for the last time in June with the loss of 47 jobs, including 32 drivers.
Administrators Paul Wood and Simon Haskew at Begbies Traynor said that they had first been involved with the company in August 2018 when it was experiencing difficulties.
The report said its cash flow was stabilised and Drive Force entered into discussions with another company in January 2019 to sell the business.
The talks were unsuccessful, but the report said: “The directors spent a considerable amount of time and effort in getting the business aligned over the following year, which resulted in further losses.
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“However, the signing of new contracts and a reduction in the cost base resulted in profitable months in early 2020.”
But disaster struck in March when Drive Force stopped trading due to the UK lockdown: “The directors took every step to try to reduce costs and defer these as well as utilising the government’s furlough scheme for a number of months,” the report added.
“Sadly, the directors felt the business had no viable prospect of a return to future trading volume quickly enough to save the business.”
Unsecured creditor claims are estimated to top £1m, with around £230,000 of this owed to trade and expense creditors not including HM Revenue & Customs.
The administrators anticipate there will be insufficient funds to make a distribution to this class of creditor.
The company held a standard international licence covering three operating centres; two in Exeter and one at its main Bristol depot where it was authorised to run 25 HGVs.