Misco UK Ltd, a computer reseller business has gone into administration after HMRC applied for a winding-up order over unpaid taxes, with the loss of around 300 jobs
Geoff Rowley, Tom MacLennan and John Lowe, partners at FRP Advisory, have been appointed as joint administrators.
Misco UK’s annual report and accounts for the period ended 2 January 2016, the most recent filed with Companies House in October 2016, the reseller reported turnover of £219.4m, down by 23.2% on the previous year, and an operating loss of over £8m.
The UK arm has been in business for over 20 years and was headquartered in Wellingborough, Northamptonshire, and with a sales office in Weybridge, Surrey, and a warehouse in Greenock, near Glasgow, Scotland.
Misco UK is part of Misco Europe, which is not affected by the collapse of the UK business, continues to trade with operations in Italy, Spain, Netherlands and Sweden.
The company went under just seven months after US parent company Systemax sold off most of its European operations to a management buyout in March this year. That buyout had been supported by private equity firm Hilco Capital.
Despite an effective turnaround plan being in place to improve cash-flow, credit insurers significantly tightened their terms which put further pressure on working capital at a time when competition from other global online retailers began to increase, the administrators said.
As part of efforts to recapitalise the company, the directors initiated a marketing process to protect the UK business as a going concern and engaged in constructive discussions, but once firm offers failed to materialise, the pressure on cash-flow was unsustainable. Following the receipt of winding-up petition from HMRC, the company said it was left no viable option other than to seek the protection of administration.
Geoff Rowley, joint administrator, and partner at FRP Advisory, said: ‘Misco UK had made great progress since the change of ownership and new investment in March this year but the company’s turnaround plans could not deal sufficiently with the rapidly deterioration in cash-flow after the sudden tightening of credit insurance terms.
‘The UK business had moved to a system of supply chain outsourcing of stock, with increasing levels of automation to enable greater efficiencies with suppliers and distributions and overall lower cost, however these efforts came at a time of heightened competition from other globalised online retailers which have eaten heavily into the margins of even established IT resellers like Misco.’
Report by Pat Sweet
