The collapse of a haulage firm in Herefordshire came after “significant discrepancies” were found on the sales ledger, which led to its invoice discounting facility being overdrawn by more than £1m.
According to administrators at Grant Thornton, 107 employees at WSH Logistics lost their jobs following the discovery that the haulier’s record of money owed to the company had been significantly overstated.
The firm, which held an international operator licence authorising 60 HGVs and 86 trailers running out of two bases in Ledbury, plus another in Hull, was incorporated in 2018 and was split into two divisions: haulage and logistics and workshop vehicle repair.
In a report to creditors, the administrator said that prior to its appointment, it had been identified that the overstatement on the debtors ledger had resulted in an overpayment on the invoice discounting facility of approximately £1.3m.
“Given the overpaid position, the available funding was insufficient to meet ongoing trading costs and to repay the overpaid position in the short or medium term,” Grant Thornton said.
“In addition, the company was significantly leveraged in respect of additional financing liabilities and without a significant and immediate cash injection, it was unable to meet ongoing debt servicing obligations in addition to ongoing working capital, which had not been previously identified given the overstatement of the debtors’ ledger.”
Grant Thornton also attributed WSH Logistics’ insolvency to significant capital expenditure in 2024 when the business relocated to a new head office and it was unable to surrender existing leases due to parking capacity constraints.
It added that a shortage of drivers meant it had to rely on agency drivers and incur additional costs and it was also battling an underutilised fleet, high rental charges and interest rates, as well as the national insurance increase.
The haulier’s management attempted a share sale of the business to one of its customers; however, when the sale fell through and creditor pressure increased Grant Thornton was appointed to take control of the company on 8 October.
The administrator added that so far it had received unsecured claims totalling £2.4m and based on its current understanding there would be no dividend payable to these creditors.
