Tue, 24 Sep 2024 | ADMINISTRATION
ESS Modular, an offsite specialist based in Hull, has fallen into administration and ceased trading. Tim Vance, Charles King and Andrew Dolliver of EY-Parthenon have been appointed as joint administrators of trading company Extraspace Solutions (UK) Limited.
Vance and King were also appointed as joint administrators of its subsidiary Spatial Initiative Limited. Upon the appointment of the joint administrators, the majority of the companies' approximately 100 staff were made redundant.
ESS, which designed, manufactured and installed modular buildings, was acquired in 2022 by ISG, the construction giant that also entered administration earlier this week. Shortly after the takeover, the company was hived off, with ownership transferred to ISG parent company Cathexis Holdings.
Despite occurring so soon after the collapse of ISG, the administrators stated that Extraspace Solutions (UK) Limited and Spatial Initiative Limited operated under a separate corporate structure and that the administration of ISG was not the catalyst for their collapse.
According to EY, the companies had experienced significant losses on legacy contracts, subsequently placing them under severe liquidity pressures.
EY continued: “Up to now this has been alleviated by continued shareholder funding however, material further cash funding was required to enable the businesses to continue to trade.”
“Despite exploring options to safeguard the future of the businesses and secure additional funding, it has not been possible to raise the funding required to continue trading. As a result, the Directors applied to place the Companies into administration.”
In accounts for the six month period ending December 31 2022, Extraspace Solutions (UK) reported turnover of approximately £14.1 million, compared to £31.5 million in the year to June 30 2022, but fell to a pre-tax loss of more than £14.6 million.
At the time, its fixed assets were valued at £1.7 million and current assets at £13.6 million. However, its net liabilities amounted to nearly £26.2 million.
In accounts for the year to December 31 2022, Spatial Initiative Limited reported turnover of around £25.3 million, up from £18.1 million a year earlier, but fell from a pre-tax profit of nearly £670,000 to a loss of approximately £20.3 million. Its total assets at the time were valued at around £11.6 million, but net liabilities totalled close to £18.1 million.
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