Mon, 11 Jul 2022 | BUSINESS SALE
Steelcraft Limited, an architectural metalwork firm based in Chester-le-Street, County Durham, is seeking a rescue buyer after being impacted by factors including Brexit and COVID-19. The firm’s managing director says it has a full order book and a strong base of longstanding customers.
The company has turnover of £1.4 million and gross profits of £370,000. However, its turnover has seen a sharp fall during the COVID-19 pandemic as a result of customers deferring jobs or closing. This situation has been exacerbated by the impact of Brexit and the ongoing war in Ukraine on the steel industry.
Founded in 1989, the company initially operated as a fabricator of security grills, before expanding into the supply of products including stairs, railings and gates. The company’s products are supplied to a customer base largely comprised of housebuilders and local authorities.
Northpoint has been appointed to oversee the sale of the business, which has reportedly already generated interest. This has raised hopes that the company could be sold as a going concern, although a sale out of administration is reported to be more likely.
In comments made to Business Live, Steelcraft Limited managing director Matthew Rodgers said: "We lost a huge amount of turnover through the two years of the pandemic, mainly through customers closing down or pushing jobs back.”
Rodgers added that, while the firm took advantage of resources including furlough and the Coronavirus Business Interruption Loan Scheme (CBILS), these did not cover its losses, while the need to pay back the loans with the economy yet to recover has created cash pressure. The firm’s margins and workflow have also been impacted by the current inflationary pressure.
If a buyer cannot be found, Rodgers said that the company faces closure. However, he added: “But we have a full order book, we have a good customer base and we have a lot of respect from our customers - so that it felt like completely the wrong thing to do. The hope is that someone comes along and picks up the business as a going concern, rescues the jobs, and grows it as the business deserves to do."
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