Fri, 17 Mar 2023 | ADMINISTRATION
Administrators are seeking to secure the assets of a COVID-19 testing provider to maximise returns for creditors following the company’s collapse. Circular 1 Health Limited was founded in June 2020 amid the initial wave of the COVID-19 pandemic and capitalised on the “unprecedented demand” for testing to become one of the UK’s largest providers.
In its accounts from its founding on June 26 2020 to November 30 2021, Circular 1 Health Limited reported turnover of £35.4 million, a gross profit margin of 50 per cent and operating profits of £6.4 million.
Despite these strong results, the company acknowledged that its trading performance was “intrinsically linked to the ongoing coronavirus pandemic”. The directors added that, while they recognised that the pandemic “could come to an end in subsequent financial periods”, it was “already securing contracts that will diversify the company activities into areas such as wellbeing, training and the sustainable economy” and believed it was “in an excellent position to grow in the subsequent financial year and beyond”.
Reflecting this strategy, the company, which was based in Carlisle and had further operations in Manchester and Cumbria, had sought to expand away from COVID-19 testing over recent months. In December 2022, the firm opened a health hub in Barrow-in-Furness under the Me and My Health brand.
However, in January of this year, staff at the Me and My Health facility were informed that it would be unable to pay their salaries as a result of a deal with an investor in the business “changing”. Staff were also subsequently not paid in February.
The company has now appointed Gary Lee and Kenneth Pattullo of Begbies Traynor as joint administrators, citing a lack of new contracts and funding. Prior to the appointment of the administrators, the company employed 40 people across its operations.
Joint administrator Gary Lee commented: "The directors have worked closely with the company’s stakeholders and have explored all options to address the long-term viability of the business.”
"Unfortunately, new contracts and an injection of funding have not materialised and reluctantly, the directors have had no option but to place the company into administration. We are now taking steps to secure the company’s assets to maximise the outcome for creditors and staff and provide assistance to the employees in making claims.”
In the company’s accounts for the 17 months to November 30 2021, its fixed assets were valued at £2.3 million and current assets at £7.6 million. Net assets at the time amounted to £5.1 million.
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