Cash flow problems are said to have caused the collapse of Grimsby telecoms infrastructure firm Telec Networks Limited.
Trading has stopped at the provider of fibre optics connections as administrators from restructuring and insolvency specialist Quantuma were appointed to the firm. The £24m turnover business, which also operated from Ipswich and Norwich, was said to have suffered following the postponement of a major contract and a change in customer payment terms which had significantly impacted cash flow.
Latest accounts for Telec, for the period between April 1, 2021 and March 29, 2022. show that operating profits at the firm fell substantially from £3.1m in the year to the end of March 2021 to just over £759,000. The documents also include a sum of £7.5m owed by Telec to creditors within a year.
Andrew Watling and Duncan Beat of Quantuma were appointed to handle the company’s affairs and said there had been no option but to close the business. All staff – reported to be 54 people in the 2022 accounts – were said to have transferred to a new employer prior to the administration, avoiding the need for redundancies.
Andrew Watling, managing director at Quantuma, said: “It is unfortunate that Telec Networks has been forced to cease trading and enter administration, due to a combination of challenging circumstances that reflect the difficult trading climate for many businesses in a number of sectors, where delays in starting contracts and late payment by clients inevitably lead to a squeeze on cash, which may be terminal if not addressed. As joint administrators, our immediate priority is to establish the recoverability of sums due to the company in order to maximise asset realisations for the benefit of the administration estate and the company’s creditors.”
Original artice – https://business-live.co.uk/all-about/yorkshire-humber