The assets of collapsed logistics specialist Tuffnells were sold for £500,000, new documents can reveal.
Rick Harrison and Howard Smith, both from Interpath Advisory were appointed joint administrators to Tuffnells Parcels Express Limited on 12 June 2023.
Headquartered in Sheffield and with 33 depots across the UK, Tuffnells is a leading distributor of mixed freight, and is a specialist in handling items of irregular dimension and weight (IDW). The privately-owned business delivers both within the UK and internationally, handling the logistics to over 160 destinations worldwide.
The company returned to private ownership in 2020 when it was acquired by Palm Bidco Limited. Since then, the company has had to navigate a number of pressures which have impacted trading, including the impact of COVID-19, high-cost inflation and an increasingly competitive market.
More recently, the financial position of the business was such that the company needed to seek additional financial support. After a number of options were explored, the directors took the difficult decision to seek the appointment of administrators.
Ahead of entering administration, accounts for the five-month period ending 31 May 2023 saw sales at £64.7m with an operating loss of £4.4m. The prior period, over a 12-month timeframe, saw sales reach £178m with a pre-tax profit of £5.5m.
Upon appointment, the business owed secured creditor Leumi a sum of £7.6m, which is expected to receive some distribution, while Barclays Bank is owed £1.6m and is expected to be repaid in full due to holding a £2m cash deposit of direct debit cover.
Preferential creditor claims totalled over £11m, the majority of which is owed to the HMRC at a sum of £10.5m. A shortfall is anticipated. As for unsecured creditors, claims are estimated to be around £12.3m, which are expected to go unpaid.
Administrators retained 140 staff to assist with processes, resulting in over 2,000 redundancies. This further condensed to 36 staff at the date of the filed report.
With the business ceasing to trade and employees made redundant, only two groups moved forward in submitting interest in acquiring company assets. One party explored the option of a ‘restart’ plan but after short period of due diligence, this was withdrawn.
The second party, being the purchaser and logistics firm Shift IP Limited, acquired certain assets of the business for a sum of £500,000, of which £300,000 was paid on completion. The remaining balance is to be paid over a period of six months.
The deal included the IP, domain name, trademarks, software codes, website, phone numbers, social media accounts, records and signage.
A short statement said: “On 24th of June 2023, Shift acquired the Tuffnells brand, IP & selected assets out of administration with the intention to get Tufnells operations re-setup and back trading.”
Commenting on the administration, Rick Harrison, managing director at Interpath Advisory and joint administrator, said: “Tuffnells is one of the UK’s most recognisable logistics companies, providing delivery services to over 4,000 businesses across the UK under its ‘The Big Green Parcel Machine’ brand.
“Unfortunately, the highly competitive nature of the UK parcel delivery market, coupled with significant inflation across the Company’s fixed cost base in recent times, has resulted in the Company experiencing intense pressure on cashflow.”