Engineering group appoints administrators at trading subsidiaries
Tue, 28 May 2024 | ADMINISTRATION
West Midlands-based specialist castings and engineering group Chamberlin Plc has appointed administrators to its two trading subsidiaries. Chamberlin & Hill Castings Ltd and Russell Ductile Castings Ltd have been placed into administration after the group failed to secure rescue funding in the wake of deteriorating trading.
Raj Mittal and Benjamin Jones of FRP Advisory have been appointed as joint administrators to the subsidiaries, which employ 129 staff across sites in Walsall and Scunthorpe, with the businesses now set to be wound down.
The group was subject to a winding-up petition from its main power supplier earlier this year, resulting in its shares being suspended from trading on AIM in early May. The following week, the company said it had been unable to secure the required funding to continue operating.
Chamberlin experienced lower than expected underlying demand during Q3 2023, while its profitability and working capital were impacted by lower sales. As a result, the company instituted a cost-cutting strategy and price increases.
However, these measures failed to generate the necessary liquidity and led to the group’s share price dropping. Administrators were appointed amid growing pressure from creditors and the company’s bank, with the majority of the workforce made redundant and a small number retained to assist in an orderly wind-down of the business.
CEO Kevin Price commented: “Following the company’s announcement on 7 May and the subsequent discussions with creditors, customers and shareholders, we do not have a funding solution that provides the necessary liquidity in the time we have available.”
“On behalf of the Board, I express to our staff, shareholders and all other affected stakeholders our deepest regret that we are having to take the very difficult decision to commence an insolvency process.”
In the year to May 31 2023, Chamberlin & Hill Castings Limited reported turnover of £6.8 million, compared to £5.6 million a year earlier, but fell to a £95,628 post-tax loss, down from a profit of close to £800,000 a year earlier. At the time, its net liabilities amounted to £7.5 million.
During the same period, Russell Ductile Castings Limited saw its turnover grow from £7.9 million to £10 million, but post-tax profits dropped from nearly £1.1 million to under £660,000. At the time, its net assets were valued at £2.3 million.
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