An administrators’ report has revealed the millions of pounds owed by a company that just last year was on a list of the fastest growing firms in Wales.
NWP Electrical & Mechanical Ltd had traded for over 25 years and business was booming - which saw them on the Wales Fast Growth 50 list for 2021.
The St Asaph based business provided electrical and mechanical services for the design and build, commercial and residential industries and its last set of annual figures showed a positive outlook - with a circa £55m order book lined up from 2021 to early 2023.
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The accounts up to March 31 2021 showed turnover of nearly £38m - with a gross profit of nearly £4m. It did report that they were moving to an employee ownership trust model to address potential succession issues. They said there were one off costs to deal with this.
Dividends were paid out by the company that totalled just over £3.7m. This saw the cash or cash equivalent held by the company fall from £4.4m to £479,842.
With a positive order book this didn’t appear an issue at the time but in July administrators FRP were called in. They found that the ongoing economic conditions impacting the sector had placed significant pressure on the cashflow and profitability of the company, leading to its insolvency.
This saw the company cease trading and 59 workers made redundant.
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A statement of affairs was released this week outlining the assets and liabilities of the company. It showed potential assets of £9.6m - including £2.8m in cash. However there is uncertainty over reclaiming all the assets - like money owed from trade debtors - with the current secured total standing at £3.28m.
In the liabilities column there is around £340,000 owed to preferential - employee pay and holiday leave owed - and second preferential creditors, in this case the VAT, PAYE and National Insurance contributions owed to HMRC.
There is £9.27m owed to unsecured creditors - with a list of the businesses affected. In addition there is £575K in unsecured employee claims. These can be claims for arrears of wages exceeding £800, and pay in lieu of notice and redundancy. There is a further £355K owed to HMRC. Based on calculations using the £3.28m asset figure the company would leave a deficiency of £7.27m.
However additional money is expected to be collected from debtors to go towards reducing that figure - with a potential of £5.6m extra in funds that could be obtained.
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