Sinks and taps supplier Astracast has blamed a broken tenancy agreement for its decision to enter administration last month with the loss of 42 jobs.
Speaking exclusively to kbbreview, owner Darren Cooper (pictured), who acquired the business last August, said an unnamed new tenant that was due to take over the company’s former site in Bradford reneged on the deal at the eleventh hour.
Astracast has also been hit with a “downturn in trading” in recent months, which Cooper said had added to its financial woes.
“We expected to surrender our lease in November and had invested a significant six-figure sum into dilapidations,” he explained. “A new tenant from the same industry that was due to take the site over pulled out at the last moment. With a moderate downturn in business levels during Q4 2017 and a very slow start to 2018 this stretched our cash flow to the point that we had to seek some specialist advice. We are now moving to a new site in Bradford that will cost approximately £110k a month less in rent and rates.”
A reported 103 jobs have been safeguarded in the administration that follows “the sale of certain assets” to a new company – Astracast International Holdings Limited – which was set up by Cooper when he first bought the business.
However, Cooper rejected industry claims that this latest prepack administration has been in the pipeline since the day he took over.
“No, [the administration] was not part of the plan,” he insisted. “We anticipated a well-structured move to a more cost-effective site that would have enabled a well-planned, medium-term restructuring of the business to take place. AIH was set up as the acquisition company to sit as the new group holding company. When I acquired the business last year, I had to set up a company as the acquisition vehicle. This is the only reason that AIH was incorporated. It was in no way at all predetermined.”
Cooper also confirmed that all UK manufacturing has now ceased with production switching to a site in Malta.
He added that no further cuts or closures to parts of the Astracast business were anticipated.
- For the full interview with Darren Cooper, see the May issue of kbbreview