Lack of bank support shoots down Gunns
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CM COVER STORY
doro in ic.perry@rbi.co.uk G UNNS TRANSPORT. the Erithbased construction haulier. was pushed under after its bank withdrew support "at fairly short notice" reveals one of its joint administrators.
Andy Pear and tan Cadlock of RSM Tenon were appointed to the firm which is registered as Gunns International Transport & Shipping on 25 Januay.
Pear reveals that a management buyout (MBO) in 2008 left the company highly-geared and illequipped to survive the recession once its main market collapsed.
Accounts prepared for Lloyds TSB, the firm's bank, show the extent of the problem, says Pear. He points out that, in the eight months to December 2008 (after the MBO in April 2008), the firm made a pre-tax profit of £186,000 on turnover of .f.:6.8m. but in the 10 months to October 2009, turnover had fallen to £41.5m and it made a pre-tax loss of £182,000 against a budgeted profit of £350,000.
Pear adds: "The management had tried to reduce its dependency on the construction industry by taking on more general haulage and chemical transport, but they could not shift the emphasis of the business quickly enough."
Once the bank decided it was no longer willing to support the firm, there were few options other than to bring in the administrators in. says Pear. The debt to the bank is "well over flm", he adds. Approximately 100 staff were made redundant as a result of
the administration, but CM understands that several have since been taken on by Rochester, Kent firm R Swain, which has acquired some of Gunns' contracts through the administrator.
Two related firms, Gunns Logistics, which held the firm's 100-vehicle fleet, and holding company Gunns Group, have also ceased trading, with RSM Tenon likely to be appointed as the liquidator later this month.
Gunns' owner and managing director Mark Minors was unavailable for comment as CM closed for press.