Thu, 18 Jul 2024 | ADMINISTRATION
Administrators have been appointed at a major West Midlands packaging company. Sirane, which is based in Telford, filed a notice of intention (NOI) to appoint administrators earlier this month, which it said was done to protect the position of the business during discussions with potential investors.
In accounts for the year to December 31 2022, the firm said it had struggled with energy and material cost increases that had affected its operating margin, as well as seeing its revenue streams impacted by the end of the government’s COVID-19 testing programme, leaving it with “significant labour and material legacy costs”.
When the NOI was filed, a spokesperson for the group said it had been “working with our advisors and stakeholders to bring additional investment into the business which will put in place a stable financial platform upon which the business can move forward.”
However, following a review of its strategic options, a solvent solution could not be found and the company has now fallen into administration, with Chris Pole and Ryan Grant of Interpath Advisory appointed as joint administrators on July 15.
Upon the appointment of the joint administrators, 172 of the company’s 194 staff have been made redundant, with the remaining 22 employees retained to assist in the realisation of the company’s assets and the undertaking of statutory duties.
The joint administrators said that they would explore a number of options, including seeking a buyer for the business, exploring interest in its plant and machinery and realising its remaining assets.
Joint administrator and Interpath Managing Director Chris Pole commented: "Unfortunately, the significant financial difficulties faced by Sirane due to rising raw material costs, increasing energy prices, and supply chain constraints have left the company in an unsustainable position.”
Sirane operated across three sites in Telford and had four core divisions: medical and healthcare, lab supplies and services, food packaging and horticulture. The group's product offerings focused on absorbency, board, and flexible materials.
In its 2022 accounts, the company reported turnover of £29.7 million, down from £38.5 million the previous year, while falling from a pre-tax profit of £9.7 million to a loss of £5.1 million. Its fixed assets were valued at £3.8 million and current assets at £13.3 million, while net assets stood at £8.8 million.
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