Specialist engineering business Metalrax has suspended its shares on the Alternative Investment Market and is preparing to call in KPMG as administrators.
Following a period of what it describes as a ‘particularly difficult’ trading period, Metalrax has outlined plans to appoint KPMG as administrators.
UPDATE: At 2:10pm, Metalrax announced that that the administrators had sold the business and assets to a group of companies headed by Bowman Birmingham. The group will trade as Arc Specialist Engineering and is backed by private investors. The transaction has saved 400 jobs.
The firm, which manufactures bakeware and kitchen accessories, has found trading in its consumer durables division ‘challenging’.
This has meant that the company’s funding availability, which it says is linked to the sales and volumes and represents a ‘large proportion’ of its overall financing, has been ‘significantly’ lower than expected.
Metalrax first listed on the Alternative Investment Market (AIM) in June 2008, when it left the Official List of the London Stock Exchange.
For the 26-week period ending 1 July 2012, Metalrax reported revenues down from £31 million to £27.7 million and a profit loss of £1.2 million.
During 2012, it lost a contract it had with the Morrisons supermarket group, which announced it would not be renewing its supply agreement with the consumer durables division.
Metalrax appointed KPMG to assist with a review of the options available to the board which could include the sale of a number of its companies or assets.
More on recent administrations:
- Administrator moves in as HMV faces the music
- London taxi maker Manganese Bronze calls in the administrators
- Administration for discount department store TJ Hughes
The firm’s directors have, it says, sought further financing to allow the company to continue trading, but it has not been forthcoming. Administration has been deemed the ‘only course of action’ and the business will be making further announcements in due course.
The move to place Metalrax in administration will be the second process that non-executive chairman Andrew Walker has been involved in following London black taxi manufacturer Manganese Bronze’s decision to do the same in October 2012.