Covid hit to automotive sector contributed to Amco administration

Amco Services (International) Ltd, which operated from sites in Telford, Redditch and Worcester, had 75 per cent of its customer base in the automotive sector, which was severely hit following lockdown in March.

Amco, which has since had its operations sold to CBW Resources, saving more than 150 jobs, had already been struggling and had lost £1 million in the financial year. But its management was hopeful it could trade its way through its cash problems.

However when lockdown began, the £25 million-turnover business forecast it would miss out on £5.7 million of expected revenue between March and July, new documents have revealed.

Documents on the Companies House website say: "The company has faced a challenging period with losses totalling £1 million incurred in FY20, together with Covid-19 significantly impacting the business this calendar year.

"Unfortunately, the impact of the Covid-19 pandemic materially altered both trading and uncertainty, and the extent of the company's liabilities and its ability to deal with them.

"The company was heavily reliant on the automotive industry with 75 per cent of its customer base operating in the sector. The automotive industry has been significantly impacted by Covid-19 with much of the industry mothballed following lockdown in March. Management forecasted a £5.7 million reduction in turnover between March and July 2020 as a result, which equated to 23 per cent of the total revenue originally forecasted for the nine months to September 2020."

Eddie Williams and Jon Roden of Grant Thornton UK LLP were appointed as joint administrators to Amco who sought interest in the company, but the only bid came from CBW Resources, a company created by three Amco directors.

The deal was completed through a pre-pack earlier this month.

A pre-pack sale involves the sale of the assets of the insolvent company prior to the company going into formal administration.

Chief executive Paul Andrews, managing director Don Mucci and David Careless paid £143,000 for the business and have also invested personal funds to support trading and satisfied new funders to provide working capital.

Mr Andrews said: “Essentially, the business has been restructured and refinanced to give both customers and suppliers confidence and peace of mind that Amco are still the right partner for the future, especially as we begin to emerge from lockdown and flex to meet the needs of business today in the new norm.

“We have retained all of the staff and we are going forward with the same management team supported by the existing dedicated planners and administration team, warehouse operatives and frontline drivers.”