Mark Cobb Installations has been sold to WT Parker, saving the jobs of around 30 members of staff, after the business entered into administration in August.
Mark Cobb Installations, which provides mechanical, electrical and plumbing contracting to developments nationwide from its base in Lincoln, began to experience trading difficulties after a sustained period of growth, during which the company’s turnover increased from circa £1m in June 2010 to £4m in June 2012.
This increased working capital requirement; put extensive pressure on cash flow and led the business to become distressed.
Chris Stirland and Nathan Jones, partners at FRP Advisory, the specialist restructuring, recovery and insolvency firm who secured the sale, acted as Joint Administrators.
WT Parker, based primarily in Burton upon Trent, provides electrical and mechanical building services as well specialising in Solar PV.
Stirland said: “Mark Cobb Installations has experienced rapid growth during the past three years, owing to a good pipeline of clients and an expansion of services. Although the company planned for growth, the number and size of contracts exceeded forecasts and working capital requirements. Consequently the business ran into difficulty maintaining supplier payments whilst waiting for payments from contractors.
“Following a short marketing period with assistance from turnaround practitioners The Blenheim Partnership, the business tightened controls and gained interest from third parties looking to invest in the company. It soon became apparent that the profitability of the contracts had decreased to a level that left the company in an unmanageable cash flow situation. In order to safeguard the jobs of around 30 employees and the value of the business, it was decided by directors to place the company into administration with the help of FRP Advisor, whilst seeking a buyer for the business.”
As part of the deal, all 30 employees have transferred under TUPE to the new company, which will continue to trade under the name of Mark Cobb Installations, which has been purchased along with other assets.