Thu, 10 Dec 2020 | ADMINISTRATION
Rhys Davies & Sons, one of the biggest haulage firms in Wales and a member of the Cathay Group, has fallen into administration citing “unsustainable losses” accrued as a result of COVID-19. Administrators say they are open to serious offers from parties interested in acquiring its business or assets, but added that a wind-down of the company has begun.
FRP Advisory’s Ian Vickers and Phillip Harris have been appointed as joint administrators for the firm. The administrators said that Rhys Davies & Sons “had been acquired by Cathay Group after a long period of losses and despite significant investment from its owners since acquisition, the COVID-19 pandemic has resulted in significant and unsustainable losses of revenue.”
The administrators added that the wider Cathay Group was not impacted by the administration and that a number of redundancies had been made, with the remaining staff staying on in order to assist in the company’s wind-down.
The company’s acquisition by Cathay came after it lost two major contracts in 2017 and suffered significant operational disruption as a result of the “Beast from the East” storms in March 2018.
In the 18 months to February 28 2019, it reported losses of £7.8 million from £55.3 million turnover. It was acquired by Cathay in October 2019 for an undisclosed sum as part of the group’s strategy to expand across the UK’s logistics sector.
FRP Advisory’s Steve Baluchi commented: “The impact of the pandemic has resulted in unsustainable losses for the company and left the directors with no option but to place the business into administration.”
“We will now be focused on the orderly wind-down of the business and returning customers’ goods to them as quickly as possible. We are also working with staff to support them and help make any claims to the Redundancy Payments Service during what we recognise will be a difficult time.”
At the time of its February 2019 filing, Rhys Davies & Sons reported fixed assets of £5.9 million, down from £6.7 million in August 2017. Current assets were valued at £8.3 million, down from £17.4 million.
The company owed creditors £11.1 million within one year, as well as £2.1 million due after more than one year. Its total assets were valued at slightly over £3 million, down from £12.8 million, with net assets standing at £971,225, down from £8.8 million.
Rhys Davies & Sons owns a fleet of 170 vehicles, including 150 articulated trailers, and has over 560,000 square feet of warehouse space across nine sites around the UK.
Commenting on the administration, Pontypridd MS Mick Antoniw said: "This is very concerning news. I am aware that Welsh Government officials are in touch with the company to offer what support they can, including the potential for discussions with the Development Bank of Wales to explore potential financial support or alternative buyers.”
"Rhys Davies is a major local employer and has a long history in Taff's Well dating back over many decades, so I know that this news will come as a terrible shock to many local people.”
"I will offer any help I can to help support those affected and if job losses do result then support will be available form Welsh Government through Careers Wales advice, ReAct and helping to facilitate DWP support."
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