A Devon haulier’s collapse into administration has been blamed on spiralling fuel prices, high financing costs and loans, as well as a VAT error in its accounts that added £280,000 to its debts.
Opus Restructuring is now attempting to sell property owned by South Molton Transport in order to raise money owed to creditors, following the firm’s closure at the end of last year.
Opus said the haulier had primary contracts with Holcim – formerly Aggregate Industries – and Heidelberg Materials and some of its difficulties arose because prices were regulated by its primary clients, with income from franchised vehicles determined by clients rather than the haulier.
“Further, agreements on guaranteed daily rates have been retracted when deemed unsustainable by customers,” Opus explained in a report to creditors.
During Covid-19, vehicle costs surged, leading to a rapid depreciation in value and resulted in negative equity in a number of South Molton Transport’s finance agreements.
“Furthermore, in order to sustain operations, the company has faced high financing costs and loans,” the report said.
“These issues have been ongoing since the pandemic, which have progressively worsened due to external circumstances and costly borrowing.”
Compounding the company’s financial problems was a finding that there had been an error in accounting for VAT historically, which led to an additional liability of £280k. Opus said the haulier already had in place a time to pay agreement with HMRC and it was not in a position to renegotiate a further agreement with the additional VAT owed.
South Molton’s directors tried selling their personal properties to help reduce the overdrawn director’s loan account, but when this failed they realised they would also not be able to meet a £485,000 liability on a bridging loan taken out in June 2025.
The company, which was established in 1999, eventually collapsed into administration on 15 December.
