Stanian Transport’s insolvency can be traced back to the loss of a key customer 18 months ago, which set in motion a chain of events that led to its pre-packaged sale last month, according to administrators.

The long-standing Manchester haulage business was sold for £35,000 on 18 November to the children of its directors, who run a much smaller transport firm called HNC Transport and traded out of the same premises as Stanian.

In a report to creditors, administrators at Alvarez and Marsal Europe LLP (A&M) said the 38-year-old haulier had suffered in recent years due to declining margins in the sector.

However, the loss of “a strategically important key customer” to a competitor caused the company problems:

“As well as this customer providing material turnover to the company, it was also providing high margin work and although the company was able to replace the majority of the lost turnover, it was with lower margin work.”

The report also outlined Stanian’s failed attempt to buy another haulier: “The company also invested cash resources into the due diligence and acquisition of a third-party company that would have significantly complimented Stanian’s existing offering.

“This acquisition was unexpectedly aborted immediately prior to completion.”

This led to cash flow problems and subsequently HMRC issuing a winding-up petition for approximately £245,000.

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A&M said this was settled in full by a third party, but Stanian’s cash flow problems remained and a number of CCJs were registered against it.

Consequently, it entered administration and was sold to HNC on the same day, saving 28 jobs and preserving the business.

HNC previously held a licence for just five HGVs and the report said it applied to the DVSA for an increase to 20 lorries, as well as a change in operating centre: “This application became somewhat elongated and took longer than a normal extension where solely it is an increase in HGV numbers,” it said.

“The extension granted to date has been for 17 vehicles, with HNC looking to increase to 20 vehicles in due course.”

Based on current estimates, A&M added that it is “highly unlikely” unsecured creditors will receive a distribution.