A long-established company owed over £1 million when it collapsed, a statement of affairs has revealed.
As we reported earlier this year, a petition to wind up Wharf Plumbing and Heating Supplies, trading as Wharf Design and Wharf Plumbing, was heard on 25th March.
The petition was presented in the High Court of Justice by the Commissioners for HM Revenue and Customs, a creditor of the company.
Now a statement of affairs has shown that HMRC was owed VAT of £349,649, and PAYE and employees’ national insurance of £205,242, totalling more than £550,000.
The statement shows that the company had assets approaching £1.5 million, with freehold land and property valued at £1.3 million, fixtures, fittings, plant and machinery of £163,977 and trade debtors £7,738.
However, as well as HMRC, its secured debts or preferential creditors included Together Commercial Finance, which was owed £550,000, Barclays Bank, owed £97,565, and employees, owed £18,654 in arrears and holiday pay.
This left £86,103 for unsecured creditors – including £63,389.97 owed to customers. The assets will be sold to repay the secured creditors ahead of unsecured.
The latter included £205,242 owed to staff and £170,391 to trade suppliers. Its directors were owed £246,495, leaving a total shortfall of £618,950.
The company was a plumbing and DIY supplies specialist covering the Stoke-on-Trent, Newcastle, Crewe, Alsager, Biddulph, and Congleton areas. Through Wharf Designs, it also designs high-end kitchens, bedrooms and bathrooms.
It was founded more than 56 years ago, in February 1970, and had a showroom at Scholar Green and a depot by Congleton station, which it closed last year.
Callers to the company after the HMRC petition were told in an answering machine message that Wharf was currently closed “while we review the business and are unable to take any new orders or payments at this time”.
The message added: “If your enquiry relates to an existing order we will be in contact with you as soon as we have more information. Thank you for your patience and understanding.”
The company’s last filed abridged accounts show that shareholders’ funds fell from £738,000 to £391,000, suggesting it was losing money. The company’s level of stock fell from £516,630 to £304,056, possibly a reflection of the closure of its branch at Congleton station.
Its net current liabilities (assets that will be used or sold within 12 months against debts that must be paid within 12 months) rose from £30,631 to £172,208, suggesting it had borrowed money to stay afloat, which might include money loaned by directors.
A survey last year found that more than half (52%) of UK plumbers had raised their rates in the previous year. The data showed the impact the cost-of-living crisis was continuing to have on the plumbing industry. Rising costs were revealed as the biggest impact of the crisis on the industry, highlighted by 61% of plumbers surveyed by plumbing and drainage manufacturer Wavin, with increases in materials, tools, and labour costs, the latter imposed by the Government as it hiked national insurance and minimum wage. After higher costs, customers cancelling or delaying jobs was chosen by 58% of plumbers as the biggest problem.
“The results show a market where plumbers are having to deal with both rising costs and lost revenue – sometimes at the flip of a switch,” said Wavin.
Almost half of plumbers (48%) said they had absorbed costs to win work rather than charging higher rates.
