It took just six months of loss making activity at East Yorkshire-based Sam Carmichael Logistics (SCL) for it to collapse into administration and can be blamed in part on the Russian invasion of Ukraine.
The company, which had 21 employees and operated 18 HGVs out of its North Ferriby base, was incorporated in 2021 and became profitable in its first seven months of trade, according to its administrator.
In a report to creditors, Interpath Advisory said the firm’s woes began when its two largest customers, one of which – Carmichael International - imported timber from Russia, started facing financial difficulties.
Both of these businesses were closely linked to SCL by virtue of having common shareholders and directors.
In addition, one of them held SCL’s operator licence and so when it also began to struggle it created cash flow problems for SCL.
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Interpath said SCL was consistently profit making in the seven months to June 2022, generating EBITDA of £116,000.
However, with the start of the Ukraine war in February 2022, the flow of Russian timber stopped overnight and Carmichael International’s subsequent insolvency had a knock on effect on SCL’s sales volumes.
It meant the Yorkshire haulier became loss making from July onwards, generating a loss before interest, tax and amortisation of £235,000 in the five months to November 2022.
“Unsecured trade creditors totalled £39,408 and related party creditors were £1.0m at the date of the joint administrators’ appointment per the directors’ statement of affairs,” said the report.
“Based on current estimates, we do not anticipate funds will be available to make a distribution to unsecured creditors.”
