Further information has emerged regarding events at Leicester haulier AM Widdowson & Son ahead of a meeting of creditors of on 3 July ahead of a proposed CVA.
Insolvency practitioner Leonard Curtis has recommended that unsecured creditors are returned 36.12p in the pound as part of a CVA that has the backing of secured creditor Close Invoice Finance. It comes after HMRC issued a winding-up petition on 14 April – which was heard on 8 June – in respect of £2.46m in unpaid VAT, PAYE and corporation tax. That petition has been adjourned until 6 July.
The meeting is the culmination of a swift-moving series of events at the operator that has seen it slip into the red, lose major contracts and find a new shareholder within a matter of months.
According to the nominees’ report, seen by Motortransport.co.uk, the business had made significant losses since it last filed a report at Companies House. In the year-ending March 2015, it posted a loss of £1.4m (£1.2m attributable to its transport business and £200,000 to its warehousing division) and since then has incurred £470,000 of losses in April and May this year.
The report cites the loss of two profitable contracts (in March and September 2014 respectively) – which accounted for £5m of turnover and “good margins” – as one of the main reasons for such difficulties.
Furthermore, on 16 June the north-west-based investment company HLD Group acquired shares in the business. The directors are now MD Peter Stevenson and new owners The Widdowson Corporation, represented by Demis Ohandjanian of HLD Group.
HLD Group describes itself as an investor whose funding is “primarily sourced through our founder” and that it “will make acquisitions where business improvement is required to allow these companies to fulfil their potential”. Ohandjanian did not return calls.
The new owners and management said they have identified a number of areas where savings can be made and profit can be restored. As a result, it will vacate one of its units (it has 550,000ft2 of warehousing at three sites in Leicestershire – Glenfield, Bardon and Wembley Road). It will also remove 30 vehicles from its fleet and make the drivers redundant, with a further 20 redundancies to be made in admin and warehousing. Directors’ salaries will also be reduced.
Widdowson was not available for comment.
