A Plymouth-based building materials supplier that collapsed into administration had been acquired, saving a number of jobs.
CMO Group Ltd filed a notice of intention to appoint an administrator at court but, Lords Builders Merchants, one of the º£½ÇÊÓƵ's largest specialist distributors of building materials, has stepped in to acquire its valuable trade and assets following a pre-pack process.
This move will preserve jobs in Plymouth but will affect creditors. All trading activities will continue uninterrupted under the new ownership.
Customers, suppliers, and partners are being contacted directly.
CMO, based on Burrington Way, was established as Construction Materials Online in 2008 by four men over a meal in a Plymouth Chinese restaurant. It grew to become the º£½ÇÊÓƵ's largest online building materials seller and one of Plymouth's most significant companies, reports .
CMO sells building products directly to customers with a catalogue containing more than 140,000 items and operating specialist websites.
Last year, the construction materials trade brought in £54m in revenue to CMO. However, none of CMOs' liabilities or obligations have been transferred to Lords under the pre-pack deal.
Lords said the acquisition combined its infrastructure and merchanting expertise with CMO's digital-first online model.
Lords has recognised the events surrounding the acquisition have affected various stakeholders, including creditors and suppliers.
The company emphasised the pre-pack administration was conducted with thorough deliberation and in close consultation with legal and financial advisers, aiming to maintain as much business continuity, employment, and value as possible.
Shanker Patel, chief executive of Lords, said: "We are delighted to welcome CMO into the Lords family. CMO brings a well-established digital platform, strong customer reach, and a specialist product-led approach that complements our own. This partnership allows us to blend traditional merchanting strengths with cutting-edge digital capabilities."
However, he acknowledged the consequences of the pre-pack administration process, adding: "We are also mindful of the impact of the pre-pack administration process on affected parties and are committed to conducting the transition with respect. Our focus now is on ensuring a stable and successful future for the CMO business and all its stakeholders."
Dean Murray, chief executive of CMO, said: "This marks a new and exciting chapter for CMO. We have built a strong, digitally-led business over the past 15 years, and in Lords we have found a partner that not only understands our model but shares our ambition. I am incredibly proud of what the CMO team has achieved and excited about what is next."
The acquisition by Lords only encompassed the construction materials, plumbing and heating trading operations of CMO, excluding its tiles business. The latter has been separately sold to another firm by the administrator.
CMO was conceived over a Chinese meal by four roofers nearing retirement. It started as a modest venture based at Plymouth's Airport Business Park, where its offices lacked even an external window.
The company grew into a massive success, generating about £83m in turnover in 2022 and employing most of its 200-strong workforce in Plymouth. However, the subsequent year saw some job cuts and a more than £11m drop in sales as the construction sector grappled with economic difficulties.
The latest interim results for the six months ending June 2024 described the period as "tough" and the market as "the market remains uncertain", albeit with signs of recovery. Revenue fell from £36.9m in the first half of 2023 to £30.3m, resulting in a pre-tax loss of £1.6m.
In January, CMO informed investors that its net debt was projected to have increased from £600,000 to £5m during 2024 and that it had received additional funding from its bank to cover working capital requirements. The directors were negotiating with the bank for further loans to sustain the company through the year and were contemplating soliciting cash from shareholders and other investors.
However, just a month later, CMO announced its departure from the London Stock Exchange's Alternative Investment Market (AIM), merely four years after its floatation, meaning it would no longer be a Plc. The company stated that it had been unable to secure the necessary funds and believed it would be better positioned to raise capital if it re-registered as a private limited company.
CMO reported a 15% drop in sales in January compared to the previous year. The share price plummeted from 14.2p in December 2024 to a low of £1.15p in March this year, just before its AIM exit.
As of Friday, it stood at 5.5p.
Like this story? Why not sign up to get the latest South West business news straight to your inbox.
