Dodd’s: what really happened?
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CM examines the events behind the group’s unexpected administration at the end of the summer, which Left 90 staff without a job
Words: Christopher Walton AS SUMMER ended, 21st Century Logistics, trading as Dodd’s Group,went into administration. It was unexpected, particularly as it had recently been taken over by a Swedish investor with big plans to use it as a springboard for buying and consolidating more hauliers in the UK.
When insolvency practice MCR was appointed on Friday 26 August, some 90 staff at Dodd’s depots in Sittingbourne and Shefield found themselves out of work. Administrator Jason Godefroy issued a statement that Dodd’s had been “suffering from a lack of working capital as a result of severe cashlow problems heightened by the economic climate”. He also blamed the dificult trading environment in the wider economy.
“The administrator has had no choice but to wind down operations with immediate effect and actively market such assets, which are available to maximise a return for creditors,” he added – a swift and brutal end for a haulier that could trace its roots back more than 100 years.
Godefroy’s statements barely covered what had happened at Dodd’s since May 2010 when the irm was approached by MillMax Ventures, headed by Swedish businessman Fredrik Helander, who became the owner of Dodd’s a year later.
According to documents seen by CM, MillMax Ventures (which was incorporated at Companies House on 29 March 2010) describes itself as a “newly established, privately-owned conglomerate” specialising in “investing in turnaround projects and changing processes in mature SME companies within international industries such as transport and logistics”.
Proposal documents
Helander describes himself as a chartered accountant and management consultant who has worked with clients such as Ryder, Stena and Ericsson, and SMEs in the Nordics. He says he served as inance director at several portfolio companies for venture capital and private equity irms. While Helander is the sole director at Millmax, the proposal documents outline the involvement of three others in the development of Dodd’s in the UK: Claus Stoby (described as having owned and operated Swedish clothing retailer Nordiska Kompaniet); Lars Simonssen (identiied as the owner and MD of Scandinavian haulier Vastra Gotaland Transport, which operates 220 vehicles and subcontracts for DHL), and Karl-Anders Torbrant (described as a chartered accountant with interests in Volvo truck dealerships in Scandinavia).
MillMax offered Dodd’s a proposal based on a maturing and consolidating market for haulage in the UK. It says the UK transport market has a window of opportunity with “a lot of business owners stepping into retirement age and wanting to hand over their business”.
It also says it had conducted due diligence on Dodd’s and identiied it as “a platform or a springboard to be able to take our aspirations and strategies further” . Strengths of the business include large property assets, a new and up-to-date truck leet, and experience in the forestry market. It adds that it had identiied two to three additional acquisitions in Kent, Essex, Sussex and Surrey that will “be able to immediately realise synergies within property, administration and trafic management by moving operations to Sittingbourne” .
Clive Squire, group director at Mercedes-Benz dealer Rygor Commercials, with dealerships in the South-East and South-West, said in September that Helander had made an approach to buy the company, which he was “glad to say did not get beyond exploratory discussions”.
Helander bought Dodd’s on 21 April this year and was registered as director on 20 May. That same day former directors David Pink and Carole Dodd terminated their directorships. Director Jim Dodd followed on 26 May. David Pink was retained during May, and six days in June before the handover. After the deal, CM spoke to Helander who conirmed the plans MillMax had outlined in its proposal. He told us: “Dodd’s is the irst in a number of acquisitions we are planning in England and Wales,” adding that he had another two acquisition targets under due diligence. “We are looking to acquire some midsized haulage companies and create a new group of 200 to 250 trucks. Our intentions are not to move in and create a quick buck.” Helander now refuses to answer his phone or return our calls.
One former Dodd’s subcontractor says Helander refused to meet him despite his concerns over the future of his contracts, concerns echoed last month by Palletforce chief executive Michael Conroy (CM 8 September). Dodd’s was a member of the network, covering the ME postcode, but Conroy was forced to put in place a contingency plan for the area after failing to arrange a meeting with the new owners.
Pink tells CM he believed that before the appointment of the administrators, Dodd’s had been running to budget, and was due to break even for the last six months of this year. He explains that for the irst eight months of the 2011 inancial year (as of the end of May) it was making a loss of £150,000 – but £105,000 of that occurred during December when bad weather hit its Kent and Yorkshire depots. A £51,000 loss was posted in April following the effect of bank holidays at the time of the royal wedding.
Pink had retained contact with Isreali bank Leumi Bank, which inanced MillMax’s purchase of Dodd’s. He says 21st Century Logistics had a inancial covenant with Leumi that the net asset value of the company could not fall below £850,000. Pink offered £100,000 to the bank to keep Dodd’s out of administration.
Banking arrangements
Pink says Helander sought alterna tive banking arrangements, but Pink insists his offer was still on the table.
He says MCR contacted him on the morning of 26 August, explaining that Paul Williams and Jason Godefroy, partners at MCR, had been appointed joint administrators. Pink asked for the decision to be reversed because his offer to Leumi was still available. Leumi Bank has refused to respond to Pink’s allegations.
Pink believes MCR’s insistence that Dodd’s lacked working capital was not the case, as the company had more than enough cash for the £165,000 wage bill. He believes Dodd’s should not have been put into administration. “I believe a viable business has been put into administration by the bank using the small print because it fell out with the lender.
“This has caused 90 people to lose their jobs, some of whom had been with the business since leaving school. It will also lead to a possible loss of at least £500,000 to suppliers.”
MCR is yet to ile a statement of affairs for 21st Century Logistics at Companies House. MillMax Ventures is still registered as a trading business at Dodd’s former depot at Eurolink Park, Sittingbourne. ■
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