Mon, 29 Jan 2024 | BUSINESS SALE
Four Financial Recruitment, a recruitment firm with offices in Bolton and Manchester, has been acquired in a pre-pack administration. The company’s founder, Philip Sofield, has put up a personal guarantee to acquire the business, its trademarks, website and goodwill from administrators for £26,000.
The company was established in 2007 and specialised in the recruitment of accountancy and finance specialists. The firm saw a record-breaking year in 2021, claiming to have increased turnover by 72 per cent and headcount by 45 per cent.
As a result, it sought to support its ongoing growth trajectory and internal recruitment drive and strengthen its city centre presence with the opening of its second office in central Manchester. However, the company subsequently ran into difficulties arising from high staff turnover and liabilities dating from the COVID-19 pandemic.
Cowgills Business Recovery were appointed as administrators in December 2023 at the request of accountants Sedulo. At this time, Four Financial Recruitment owed a total of £445,178 to creditors, including £193,555 to HMRC for PAYE, £67,000 to HMRC for corporation tax, £124,000 to lender Funding Circle and £25,000 to an unspecified landlord.
In a statement, the administrators said: “During 2023 however, the Company began to suffer a downturn in their business as a result of the following: High turnover of staff, including the loss of key members to direct market competitors, in addition to increased salary expectations, due to the market position; and fallout from liabilities incurred during the COVID-19 pandemic, which resulted in significant HMRC arrears and a subsequent time-to-pay arrangement being agreed.”
“Draft accounts for the year ending 31 December 2023 have yet to be prepared; however, due to recent events, the company directors realised that the recent staff turnover and the terms of the time-to-pay arrangement with HMRC meant that the Company was likely to encounter further financial difficulties.”
Following the pre-pack sale, nine jobs have been transferred over by TUPE to FFR Limited, the new company owned by Philip Sofield alongside his sister and business partner Claire Sofield.
Find out more about M&A in the UK recruitment sector
Read about the impact of 2021 reforms to regulations on pre-pack sales to connected parties
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