Circle Express was on the verge of becoming profitable following a major restructure when two of its business tenants announced they were moving out, making operations unsustainable according to its administrator.
The leading logistics company, which specialised in next-day and same-day deliveries of air and sea freight as well as distribution of heavy, awkward and dangerous consignments, had made significant efficiencies following its acquisition by new owners in 2023.
Begbies Traynor said at that time it was losing in excess of £500,000 a month, but costs were stripped back and redundancies made and by September 2024 its losses had reduced to £3.4m.
Further efficiencies were made, its Leeds site was closed and 12 months later its loss was £1.9m, with a forecast that it would return to profit despite the detrimental impact of increases in NI and minimum wages.
However, in a report to creditors Begbies Traynor said its largest tenant at the Polar Park logistics site in West Drayton then gave notice it was vacating the premises, which would have a profit and loss impact of £1.4m per year.
Circle Express, which was incorporated in 1968, then received notice from a second tenant that it was also moving out of Polar Park, which would cost it an additional £200,000 a year.
In addition, rent increases at the logistics park were due to kick in: “The demands for payments from some of our landlords and suppliers has been excessive and generating enough cash to ensure payments were made on time was becoming ever increasingly difficult,” the report quoted the haulier as saying.
However, the administrator considered a pre-packaged sale of Circle Express’ business and certain assets would provide continuity to trade debtors and work in progress and preserve around 158 jobs and so a sale was agreed to Trilogy Logistics just before Christmas for £63,000.
The report added: “As part of the sale and assets, the purchaser has been granted a licence to occupy five out of the six locations (the Manchester location was not required by the purchaser) for a period of six months until such time the purchaser can enter into a new lease with the respective landlord or vacate the premises.”
