Public-funded firm goes bust leaving staff redundant and apprentices in the dark
PUBLISHED: 11:17 02 May 2019 | UPDATED: 18:01 02 May 2019
A company which had received hundreds of thousands from the public purse has gone into liquidation - despite saying it was "confident" about its activities only four months ago.
Construction Training Specialists is an independent training provider based in Norwich's Hellesdon Park Road.
Now 16 members of staff have been made redundant as well as apprentices being left in the dark about how their studies will continue.
The company had received a number of grants from both the European Social Fund and the government – its latest public funding grant totalling around £487,000.
The firm, which provides apprenticeship training in the construction industry, is a subsidiary of Peterborough Regional College.
Greg Hanrahan, director of CTS, said: “CTS has today ceased training and is working with professional advisers to liquidate the company. The directors of CTS over the last few months have been working with a number of parties in order to avail today's decision but unfortunately this was not possible.
“The welfare of our apprentices is at the forefront of our minds and we are working closely with the Education and Skills Funding Agency and other parties to find alternative providers to support apprentices and their employers in completing their studies.”
Despite the director's report saying the board were “confident of returning to a profit”, the company had reported a tough year in the run up to the news.
CTS had swung to a loss in excess of £77,000 for 2018 compared to a profit of £9,642 the previous year.
According to the company's accounts turnover rose to more than half a million in 2018 compared to £332,000 in 2017.
However this pot was drained by increasing costs of sales; £157,355 for 2018 compared to £106,372 in 2017.
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Margins were further squeezed by an increase in administrative expenses which more than doubled for the year.
In 2017 expenses totalled £214,028 but in 2018 this rose to £447,643.
This pushed loss before tax to £92,333 before a reimbursement of £15,000 from a debtor.
The business was also reliant on its creditors paying up to maintain a healthy cash flow, with its reports published to Companies House showing the business had no cash in the bank or in hand.
Instead of having money in its accounts, the firm was relying on £167,375 in debt to be paid to stay afloat.
But on top of this, it had to pay out in excess of £200,000 to debtors over the next 12 months – leaving it in the red.