As a result of Portland’s involvement, the contracts that the company was working on when it went into administration were completed and the funds owed to GI Signage, including for the work in progress, has now been collected. The other assets which included £23,000 of plant and equipment were also sold on behalf of the Administrators. As a consequence of Portland’s work the secured creditors were paid in full and other creditors such as suppliers and sub-contractors will get some of their money back.
GI Signage, who’s customers included national companies such as Balfour Beatty, Skanska and also undertook work for Southampton City Council, ran into financial trouble after a huge expansion drive led to an increase in business.
The Administrator at Portland, Carl Faulds said:
“it’s a bit like buying a massive house when house prices are going up, but then not being able to pay the mortgage, or electricity or gas bill. A growing business needs more and more cashflow to pay the bigger bills. Unfortunately, in the construction industry there can be a long delay between doing the work and getting paid, which in turn can delay being able to pay your own bills on time and this puts real pressure on cashflow. This eventually led to HMRC trying to force the company into liquidation through the court, but Portland were able to step in and take control and manage the closure in a way that maximised the money realised for the creditors.”
Portland Associate Director Stewart Goldsmith commented:
“It is very unfortunate that a successful company, which had been growing at a rapid rate over the last 8 years, was forced to cease trading. GI Signage overtraded without the cashflow resources in place to meet the increase in costs at a time when there were delays in invoices being paid by its customers. This happens too often and highlights the importance of hiring an experienced and credible financial adviser to manage the finances, particularly in an expanding business.”