The notice to appoint administrators Sam Woodward, Alex Williams and Hunter Kelly of EY restructuring, was filed yesterday, and they have taken over the financial running of the business while they seek a buyer or work out a recovery plan.
Hawk Plant Hire - which makes up around 80 percent of the group - reported revenues of £75.4 million for the year to the end of 2017, with a pre-tax loss of £734,000. It had total assets of £141.9 million against liabilities of £136.6 million. But current liabilities make up £98.8 million of this against current assets of £46.9 million! And this for the period before Carillion went into administration.
In spite of this no warning was given by the company or its auditors KPMG of the seriousness of the situation when the parent company Hawk Plant (UK) Ltd - which also includes Hawk Hire and a small sales operation - filed the group accounts less than three months ago. It posted revenues of £93.5 million with a pre-tax profit of £515,000. Its working capital situation however was similar to its largest operating business, being negative to the tune of £46.2 million.
The group employed around 420 staff, but 83 have been let go on appointment of the administrators. The business is owned by members of the senior management team along with Business Growth Fund.
Joint administrator Sam Woodward said: “The group’s cash flow has been impacted by a number of historical problematic contracts and a delay in the commencement of anticipated projects. Coupled with this, the group’s funding structure, with significant hire purchase and finance lease commitments put pressure on the cash flow at a time that asset utilisation was comparatively low.”