Wed, 24 May 2023 | ADMINISTRATION
A home improvement firm based in the North East has been acquired out of administration by its sister company. Kitchens Plus Limited, which is based in Gateshead and also has showrooms in Durham, North Tyneside and Hexham, fell into administration on May 9 2023.
In its most recent accounts, for the year ending April 30 2021, Kitchens Plus said that it had seen a strong recovery from the initial fallout from the COVID-19 pandemic, with the resulting boom in demand for home improvement seeing the business report a 9.7 per cent increase in turnover to £20 million, while its gross margin improved from 24 per cent to 33 per cent.
The firm reported post-tax profits of £877,061 compared to £187,434 a year earlier and EBITDA increased from £228,929 in 2020 to £1.3 million. Amid these strong results, the company targeted further growth, implementing a new marketing strategy and increasing its number of showrooms across the North East from 5 to 7.
However, the firm subsequently ran into financial difficulties in the increasingly adverse economic environment, as it was hit by inflationary pressures, falling demand among consumers and the increasing cost of finance for its customers, which took a significant toll on its trade.
As a result, the company was forced to appoint Iain Nairn and Rochelle Schofield of Leonard Curtis as joint administrators. With assistance from Cerberus Asset Management and St James Square Law, the joint administrators subsequently secured a sale of the business and assets to Kitchen Plus’ sister company Windows Plus Roofs, with all 77 of the company’s jobs transferred to the buyer under TUPE.
Joint administrator Ian Nairn commented that the deal was a “positive outcome for the company’s management team and workforce in the NE region”. He added: "The sale achieved represents the best outcome for the company's creditors as a whole, minimising the effect on consumers and has resulted in the successful transfer of all jobs to the purchaser."
In Kitchen Plus’ 2021 accounts, its fixed assets were valued at £730,709 and current assets at £3.3 million, while the firm’s total equity amounted to £121,884.
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