Wed, 08 May 2024 | ADMINISTRATION
A steel processing business based in the Liverpool City Region has ceased trading after falling into administration. Atlantic Steel Processing Limited specialised in hot rolled steel and reversing mill plate processing.
The Birkenhead-based firm had faced challenging trading conditions, primarily arising from a reduction in demand. This resulted in the company experiencing cash flow difficulties that impacted its ability to operate.
An accelerated M&A process was undertaken in an attempt to secure a sale of the business as a going concern. However, the process did not yield a rescue deal and the company subsequently fell into administration at the beginning of May 2024, with Richard Goodall and Martyn Rickels of FRP Advisory appointed as joint administrators.
The company has now ceased trading, with the majority of employees made redundant shortly after the appointment of the joint administrators and a small number retained to assist in an orderly wind-down of the business.
Joint administrator Richard Goodall said: "Unfortunately, mounting external pressures, most notably a reduction in demand and movements in commodity prices, resulted in the business being unable to meet its financial obligations.”
"Regrettably, this meant the necessary closure of the business. We are now supporting the employees affected to file claims with the Redundancy Payments Services and would encourage any parties with an interest in acquiring the assets to make contact with us as soon as possible."
In its accounts for the year ending December 31 2022, Atlantic Steel Processing reported turnover of £67.2 million, down from £71.4 million a year earlier, and operating profits of £11.4 million, down from £15.8 million.
The company stated at the time that 2022 “was very much a year of two halves” with most of its profits generated during the first half of the year. However, steel prices began to surge following Russia’s war in Ukraine, while overstocking during Q2 2022 and subsequent falling prices led to a major drop off in demand in Q3.
After this, the company stated that steel mills sought to raise prices as a result of higher energy and transport costs, but that these increases “never stuck”, leading to December 2022 being “the low point on pricing”.
At the time, the company’s fixed assets were valued at £2.2 million and current assets at £47.8 million, with total equity standing at £26.6 million, compared to £18.2 million a year earlier.
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