Irish furniture design and manufacturing business Gola Wood Works suffered reduced demand and growing losses in the build up to its administration.
James Neill and John Donaldson, both of KPMG, were appointed as joint administrators of Gola Wood Works Ltd on 19 April 2023.
Detailed in newly filed documents on Companies House, the business, located in Downpatrick, Co. Down, Northern Ireland as well as operating from a manufacturing facility in Emyvale, Co. Monaghan, Ireland, experienced a significant reduction in demand following the Covid-19 pandemic.
This saw challenges to its main customer sectors – the hospitality and tourism industries, as well as being impacted by rising material costs, which ultimately saw sales slip 45% from £3.3m in FY20 to £1.8m in FY21. Losses also widened from £147,000 to £433,000 over the same period.
Despite sales picking up the following year to £2.2m and losses being narrowed to £134,000, the war in Ukraine caused further challenges in relation to utilities, which resulted in significant margin pressures.
During FY22, the business became reliant on supplying one key customer with assembly and fit out of furniture, however, this work failed to materialise and as such the company became no longer viable.
Ahead of entering administration, a short marketing period was conducted with the goal to find a buyer as a going concern. Despite a number of parties expressing an interest, a buyer was unable to be secured.
Following the appointment of administrators, an agreement was reached to sell the premises and the plant and machinery in situ at the Emyvale site. A deposit of €100,000 was received with a view of completing the sale to be within six weeks of the administrators report. As part of this agreement, permission has been granted to the buyer to occupy the premises under a short-term lease.
Furthermore, bailiffs acting on behalf of the Irish Revenue commissioners attended the premises on 11 May 2023 and seized goods on foot of a warrant against the company.