The company was placed in to creditors voluntary liquidation on 5th September 2016 and Mike Fortune and Carl Faulds of Portland Business and Financial Solutions were appointed joint liquidators.
The company was incorporated in 2009 to purchase a business from a third party. The company initially operated from leasehold premises in Blacknest, Surrey, producing high quality bicycle components. The company grew, however due to the highly competitive marketplace significant discounts had to be offered and profit margins were tight.
The director continually tried to develop the company’s products to ensure the designs were up to date and worked well with components from the large bike parts manufacturers. The director also reviewed other areas of the marketplace that could be exploited to help improve the company’s profitability.
Due to the tight profit margins and cost of development, the company experienced cashflow issues and required financial support from the director.
The director undertook a review of the company’s products to establish if some less profitable products could be discontinued and where costs could be saved. In June 2015, the company moved to a smaller rented premises in Waterlooville, Hampshire in order to reduce overheads.
The director’s efforts to improve the company’s profitability appeared to be working and the director remained confident that the business could be a success. The director sought advice from business professionals and implemented changes to marketing strategies expecting this to help increase turnover and profitability.
Recently the company has experienced issues with raw materials and parts being delivered damaged. The company had to work with the materials that had been delivered in order to complete its orders on time. This meant additional man hours were required to produce the high quality products that customers had grown to expect.
The director had run out of personal funds to invest in the company, which continued to experience cashflow issues, and he tried to arrange for third party investment in order to recover the company. Despite some initial interest, no investment was made.
The director concluded that without the investment, the company could not be rescued in a timescale acceptable to creditors and accordingly steps were taken to wind the company up.
Creditors can access the first report here