Facilities management firm assets saved

Employees of facilities management firm KDE are looking to the future after management used the business recovery services of SFP.

KDE was an electrical goods contractor based in Alcester in Warwickshire and was a specialist in providing lighting for commercial, domestic and emergency use, as well as fire detection equiopment.

However, the weak economic climate had pressed the company hard and it ran into difficulties in recent times, running up debts of £1.2 million, as compared with its annual turnover of £3.5 million.

Such a level of debt was unsustainable and the firm was forced to seek insolvency and restructuring help, with the result being that SFP partners Daniel and Simon Plant were jointly appointed administrators on November 21st.

Daniel Plant noted: "Despite working with a number of significant customers KDE had substantial cashflow issues due to cutbacks in customer budgets." This had led the company to cease trading.

However, the expertise of the SFP administrators has helped save the company, with a substantial restructuring taking place, followed by a sale.

"Following discussions with a number of interested parties, a sale of the business and assets was completed to KD Electrical Maintenance Services Limited on 25th November," Daniel stated.

And, he noted, over 40 jobs have been saved through this action, ensuring that the assets of the firm are used and the skills of its workforce retained. KD Electrical Maintenance will benefit from these and many people will be able to look forward to Christmas in a far better mood than would have been the case had KDE simply folded.

The case is a clear example of how swift action can lead to a solution to what may seem an insurmountable problem being found within days, not least where a company has debts but also retains substantial assets in terms of property, goods or a skilled workforce.

A number of other companies may be facing such a fate, including larger enterprises like Blacks.

The outdoor leisure company has endured poor trading results in recent years and recent months have seen a succession of potential buyers for the company pulling out.

Among these are rival Go Outdoors – which has been expanding with new stores opening across the UK in recent years, plus Sports Direct, which was linked with a  takeover this month but then announced publicly that it would not be proceeding with a  sale.

Blacks, which includes stores under its company name and also that of Millets, has closed a number of UK stores but has continued to struggle, despite the fact that many consumers might wish to buy items such as walking boots for a staycation in Britain, swapping sunny foreign beaches for a cheaper trip in the UK. 

The firm continues to look for a buyer, but if this does not happen, it is possible that at some point soon it could be requiring help with insolvency and restructuring operations.

Having entered the recession while trading at a loss in 2008, efforts made to turn round the company so far have included the closing of a head office and warehouse as part of an £8 million cost-saving measure, as well as offloading its unsuccessful boardwear business and starting up concept stores.

But as the experience of KDE has shown, harsh economic times may catch up even with hitherto successful firms.