At the meetings of members and creditors on 16th February 2017 the company was placed in to creditors voluntary liquidation and Mike Fortune and Carl Faulds of Portland Business & Financial Solutions were appointed joint liquidators.
The company took over the running of The Mill Arms public house in Romsey, Hampshire in June 2014. The first year of trading was difficult and although the company’s business plan predicted that it would make a loss in the first year, the losses were larger than expected due to higher than anticipated overheads. Unfortunately during the second year of trading the company experienced issues, bad weather resulted in significantly lower summer trade than was anticipated. Also in the second year of trading, accommodation income fell which resulted in the company experiencing financial issues.
The director attempted to increase sales by implementing various promotions to entice new customers but this had limited success. By early 2016 the company had accrued PAYE and VAT liabilities that it was unable to settle and so the director arranged for third party loans to assist cash flow. In the summer of 2016 the director was able to agree a time to pay arrangement with HM Revenue & Customs (HMRC) to settle the historic liabilities.
The director continued to believe that the company could be rescued and arranged for additional third party loans to support trading whilst he tried to increase turnover to a profitable level. Efforts appeared to be paying off but by November 2016 the company was still struggling financially. The director approached the landlord, Enterprise Inns, who agreed that the pub could be marketed for sale. It was anticipated that this would result in a better return for creditors, however a purchaser could not be found in time.
The director approached Portland for insolvency advice in December 2016 as the company was quickly running out of funds to continue trading. The director concluded that the company should cease trading in early 2017 after the busier Christmas period and formally instructed Portland to assist with placing the company in to liquidation.
The first report to creditors is available here