Northumberland company Boiler Plan owed more than £3.1m to creditors when it went into administration in July, new documents show.
TheCramlington-based firm, which had attracted £4.65m investment in recent years, had seen fast growth until it closed last month with the loss of 62 jobs. Founder and director Ian Henderson, who owned about 19% of the company, told Business Live that a critical shortage of new boilers brought on by supply chain issues had seriously hampered Boiler Plan's ability to fulfil orders and drove losses.
Administrators at Interpath Advisory were appointed to the firm after sale attempts failed and its main backer Maven Capital Partners - which had invested the £4.65m over several years - withdrew support. Documents from Interpath now show that Boiler Plan owed more than £55,000 to former customers and £138,000 to staff, of which there is £86,146 owed to seven employees classed as unsecured creditors.
Read more: Property companies behind Newcastle Glassworks student block sold out of administration
Other sums of £810,407 and £715,577 were owed to HMRC and trade creditors respectively - including more than £403,000 owed to supplier Wolseley. The statement of affairs prepared by the administrators also shows shareholders, including Maven, are unlikely to see any return on their £4.5m invested in the business.
At the time Boiler Plan went into administration, Mr Henderson said the business had been strong before the pandemic and boiler manufacturing shortages took their toll. He said: "The business was absolutely flying before Covid - we were hitting all of our numbers, we were growing rapidly, hiring new staff and we'd moved into new premises. It was all going really well.
"Covid hit us hard because we relied on going across the customers' threshold and we had all the challenges business faced during Covid on top of that. But we were well capitalised and we made it through.
"We won new contracts last year, business-to-business contracts that were really strong, with the likes of E.ON and Domestic and General and we had orders in quarter one for 600-700 boilers per month, which was worth about £1m revenue per month. And then the boiler supply crisis hit us."
Mr Henderson warned the UK was facing a significant challenge going into the final quarter of 2022 as widespread semiconductor chip shortages had severely cut the number of new boilers available. He said manufacturers were only producing about 20% of previous years' output, a trend that meant Boiler Plan missed out on the minimum of 300 boilers it needed to install each month just to break even.
The firm had sought assurances from manufacturers that production would return in full but it was told there was no certainties until next year. Mr Henderson said the disruption, along with Boiler Plan's debt structure, meant a sale to save the business was impossible.
Boiler Plan customers were advised to cancel direct debits to the company and make alternative arrangements for any installation or remedial work needed.
READ NEXT
High Street Group administration could take six years to resolve, report says
Second bid for levelling up cash to support Tyne offshore and subsea sectors
Conveyancing hold-ups hold back profits at estate agency group LSL Property Services
Sales soar at Greggs as customers seek value in cost-of-living crisis
