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F Swain fails to recover from big contract losses
Page 6
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dominic.perryfarbi.co.uk CHESHIRE HAULIER F Swain & Sons has become one of the most high-profile casualties of the recession so far this year, after administrators from BDO Stoy Hayward were appointed to the lirrn earlier this week (17 May).
Around 110 staff were made redundant with immediate effect and all operations have ceased.
The firm, which has traded since 1922, had been struggling for the past 18 months, having lost two major contracts with Lafarge and Unilever, both of which went to Wincanton, as well as a general fall in business As a result, turnover fell from a high of £16m-£17m three years ago to about £10m this year, with a knock-on effect on profitability.
Former finance director Andy Powell says the operation had been loss-making over the past 12 months, with monthly losses ranging from 12,000 to £80,000.
The company reduced its fleet from 100 to 70 trucks and instituted an across-the-board 20% pay cut. ln addition, it sold its shares in operator consortium Jigsaw Solutions for £800,000 in a bid to reduce debts However, none of this proved
sufficient to save the business. Powell adds: -We made several efforts to cut costs, but all it did was buy us ti
Staff from BDO were brought in two weeks ago as the firm's management made a last-ditch bid to rescue it. But with "no appetite for further funding" from its bank. administration was the only option, says Powell.
BDO made attempts to sell the business as a going concern, but no buyers were forthcoming.
Powell adds: "A loss-making haulage business isn't high on anyone's shopping list."
Despite the sale of its shareholding in Jigsaw, F Swain remained a key member of the consortium. Its work has since been migrated to other operators.
Jigsaw's MD Andy Humpherson adds: "It's an unfortunate situation, but because of the strength of Jigsaw we have been able to transfer the work across to other partners."
Parent company F Swain & Sons (Holdings) and Milton Keynesbased sister firm Sibley Haulage are unaffected by the administration.
• For more on administrations, see Investigation, page 16