The company poised to purchase Home Delivery Solutions pulled out of the deal after the haulage firm’s customers said their existing business wasn’t guaranteed, according to its administrator.
The Chesterfield business collapsed into administration in July after attempts to sell it fell through.
Begbies Traynor said in the year ending 31 December 2022, turnover at Home Delivery Solutions was £9.6m, but it reported a pre-tax loss of £292,000.
Draft accounts for the following 12-month period showed revenue was £8.9m but operating losses were now £286,000.
In the four months to 30 April 2024, management accounts showed its operating loss was £192,000.
“We understand this loss has been attributed to the increasingly competitive nature of the logistics industry, challenges with cost base inflation and associated pricing challenges in passing this through to the company’s customer base,” Begbies Traynor added in a report.
The administrator said the haulier, which was incorporated in 2009 and employed 97 staff, was a specialist in handling items of irregular dimensions, weight and fragility and was known for its excellent reputation in the marketplace.
It said the customer base was built on personal long-standing relationships and that the company traded with customers with no formal contracts in place.
However, following a difficult period of trading during 2022 and 2023 and an increase in cash flow pressure, the company sought a company voluntary arrangement.
This was eventually rejected by HMRC and so Begbies Traynor was approached to try and sell the business.
It said “significant interest” was generated and an unnamed preferred bidder stepped forward offering £337,000.
But following due diligence, the deal fell through: “The preferred bidder withdrew their offer following confirmation from the main customers that the existing business provided to the company would not be guaranteed,” the report said.
“This was primarily due to the main customers implementing contingency plans due to the ongoing uncertainty around the insolvency process and the anticipated impact on service provision.”
Begbies Traynor is now focusing on collecting book debts for the benefit of creditors.
