Loss of high margin work led to haulage firm's collapse

The sorry tale of a failed business deal, mounting CCJs and a competitor bagging their main client led eventually to the collapse of Stanian Transport in Manchester this autiumn.

Writing on Motor Transport’s website Chris Tindall said: “Stanian Transport’s insolvency can be traced back to the loss of a key customer 18 months ago, which set in motion a chain of events that led to its pre-packaged sale last month, according to administrators.

“The long-standing Manchester haulage business was sold for £35,000 on 18 November to the children of its directors, who run a much smaller transport firm called HNC Transport and traded out of the same premises as Stanian.

“In a report to creditors, administrators at Alvarez and Marsal Europe LLP (A&M) said the 38-year-old haulier had suffered in recent years due to declining margins in the sector.”

A&M said in their report the problems began 18 months ago of a strategically key customer they reported that: “As well as this customer providing material turnover to the company, it was also providing high margin work and although the company was able to replace the majority of the lost turnover, it was with lower margin work.”

Motor Transport reported the report also outlined Stanian’s failed attempt to buy another haulier: “The company also invested cash resources into the due diligence and acquisition of a third-party company that would have significantly complimented Stanian’s existing offering. This acquisition was unexpectedly aborted immediately prior to completion.”

The aborted deal led to cash flow problems and subsequently HMRC issuing a winding-up petition for approximately £245,000 in November. The bill was settled by HNC who bought the firm when it entered administration saving the 28 jobs and the business. Unsecured creditors are unlikely to receive any cash say A&M.

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