A Birmingham contract haulier that entered administration earlier this year went from a £1m pre-tax profit to a £100,000 loss in just 20 months' trading.

Contact Transport was suffering from creditor pressures and had fallen behind with its time to pay arrangement with HMRC when RSM Restructuring Advisory was appointed on 20 April .

A report into the events leading up to the haulage company’s administration said the company reported steady profits for the years 2012-2014 and then a much higher profit of £929,000 for the year ending 30 June 2015 (pre-tax profit: £1.01m).

But it added: “Following a poor winter trade in 2015/16 management introduced changes to the business model, however sales were not as high as anticipated for 2016/2017 and substantial vehicle damage and insurance costs were incurred, which caused cashflow problems.”

Management account details provided by RSM showed that by the end of February 2017 the company was running at a pre-tax loss of £105,000 on an almost £14m turnover.

A winding up petition was filed on 30 March and secured charge holder Bibby Financial Services served notice of intention to appoint administrators on 13 April.

Prior to the administration, 79 employees were transferred to another company to enable continuity of service for one of its customers and the remaining 62 staff were made redundant.

It had a licence authorising 76 HGVs out of six depots in the Midlands.

The report added: “The company had acquired a number of pieces of sports memorabilia which is likely to be sold by auction or private treaty.”