Hundreds of businesses owed more than £26m when Devon’s British Ceramic Tile went bust will only receive 1.2p in the pound, it has been revealed. Administrators wrapping up the affairs of the company, which was based next to the A38 at Newton Abbot, ended up with less than £300,000 to share out among 500 unsecured creditors.
British Ceramic Tile fell into administration in January 2019, making nearly 400 staff redundant. It blamed international competition, rising costs and skills shortages for its demise.
Administrators from London’s FRP Advisory LLP have now completed the administration of British Ceramic Tile Ltd and although they were able to claw back millions of pounds owed to the company, including more than £16m in book debts and sales, it was not enough to pay off all the debts.
Its 400,000sq ft factory building on the Heathfield Industrial Estate was sold in September 2019 to a trio of international property firms.This brought in £4,632,996 but all this cash went to a fixed charge holder. Documents filed at Companies House reveal a secured creditor, thought to be majority shareholder Warren Stephens Trust, was owed about £33m and suffered “a significant shortfall”.
The documents also reveal that there were funds to pay a preferential creditor the £97,035 it was owed. But there was just £358,625 available for unsecured creditors - and £62,286 of that was eaten up in costs of distributing the funds.
The administrators’ final report said a total of 500 creditors lodged claims amounting to £26,155,244. It said: “The funds were sufficient for a dividend of 1.2p in the pound.” The money has now been paid to those creditors.
Among those owed the most when British Ceramic Tile collapsed was Devon firm Gregory Distribution, which was £2.6m short. That company moved into the 75,500sq ft high bay warehouse at the Newton Abbot site site, now called PowerPark 38 in 2020. HMRC was owed £1.8million in tax and Sibelco, which supplied clay from Preston Manor Works in Kingsteignton, lost £147,000.
Plymouth’s Applied Automation, owed £11,867, stood to receive about £142, under the 1.2p in the pounds pay out. Other Plymouth firms owed cash from the collapse of the tile manufacturer included Alpha Logic, GMD Eurotool Ltd, Protective Wear Supplies Ltd, South West Hire and Sales Ltd, SSG Training and Consultancy and Yealm Investments Ltd.
Insolvency practitioners had been called in at British Ceramic Tile as early as September 2018 when majority shareholder Warren A Stephens Trust, started a discreet sales process to sell its shares so a new owner could provide further investment in the company. The Warren Stephens Trust ended up being owed £33m.
In January 2019, a key BCT customer gave notice that it intended to reduce future orders. HMRC also threatened wind-up proceedings over an unpaid bill. Despite refinancing, the company suffered sustained losses in the face of international competition, increased utility and material costs, a difficulty in recruiting high-skilled staff and a general decline in UK manufacturing.
The British Ceramic Tile name was acquired by Al Murad DIY in August 2019. It is now owned by Leeds-based Ceramic Tile (Group) Ltd, and it trades online.
Read more from BusinessLive:
