Thu, 01 Aug 2024 | ADMINISTRATION
A £13 million-turnover builders merchant with sites across London has fallen into administration. The business has been trading as Hitchcock & King for more than 50 years but has now entered administration after facing difficult trading conditions over recent years.
The company is described as a well-known builders and timber merchant and operates from six sites across the capital, in Ashford, Burgh Heath, Fulham, Hammersmith, Streatham and Twickenham.
However, the firm has reportedly suffered due to difficult trading conditions in recent times, including rising costs and decreasing margins. Liquidators had previously been appointed to Hitchcock & King Limited in September 2020 and March 2023.
Over recent months, the company’s directors had explored options including a sale of the business but were unable to find a solvent solution. They subsequently took the decision to appoint administrators.
Steve Absolom and Nick Holloway of Interpath Advisory were appointed as joint administrators of Hitchcock & King Enterprises Limited on July 31. The joint administrators will continue to trade the company for a short period to explore options for the broader business and sell the remaining stock.
37 of the company’s staff have been retained to assist in trading the business, but a further 27 employees were made redundant upon the appointment of the joint administrators.
Joint administrator and Interpath Advisory Managing Director Steve Absolom commented: “Whilst Hitchcock & King will remain open for business in the short term to clear through the stocks of building supplies, there’s no doubt that this is an extremely sad day for this long-running family business and its team of hard-working, loyal employees.”
In the year to March 31 2023, the company reported turnover of £13.3 million, down from slightly over £16 million a year earlier, while falling from an operating profit of close to £1.2 million to a £1.1 million loss.
These results were attributed to a range of factors, including the ongoing effects of COVID-19, weak demand for building materials in the repair, maintenance and improvement (RMI) market as well as high inflation and interest rates, which discouraged homeowners from spending on their homes.
Directors added that turnover had been impacted by “branch specific issues” and that the company’s high fixed cost base and low net margin meant that “it was not possible to avoid the operating loss given the decline in turnover”, despite significant actions being taken to reduce costs.
At the time, its fixed assets were valued at slightly over £1 million and current assets at £5.5 million. However, the company’s debts meant that its net liabilities totalled close to £55,000.
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