Safestyle administration: Suppliers, staff and taxpayers set to lose millions from window firm's collapse

Administrator Interpath has now published proposals on potential financial returns to those owed money after revealing earlier this month that the group had owed more than £30m to various parties at the time of its collapse.

Reports have published in regard to three related companies within the Safestyle group – HPAS Limited, Style Group Holdings Limited and Style Group UK Limited.

The report on HPAS said the company’s creditor Aurelius is likely to receive £4m it is owed in full but unsecured creditors collectively owed £13.5m are “unlikely” to receive any money back.

This includes £9.7m owed to business suppliers, as well as £3.6m of unsecured employee claims is understood to relate to areas such as redundancy payouts.

A further £7.8m owed to HMRC is “likely” to be subject to some return but the precise amount is dependent on asset realisations.

The same position applies to £400,000 of ‘preferential’ employee claims relating to wage arrears, unclaimed holiday pay and certain pension benefits.

Returns will depend on what sales of assets are possible.

Manufacturing facilities in Wombwell, Barnsley, have been put on the market for a combined £8.75m, with the hope of sales being completed by March.

Two head office properties in Bradford are to be sold at auction, one with a reserve price of £400,000 and the other of £200,000.

In addition, “state-of-the-art equipment” for manufacturing windows and doors which was in place at its Wombwell factory is to be sold, in part via auction. It is hoped the sales could raise in the region of £1.4m.

Administrators also revealed that at the time of the firm’s collapse, it had £18m worth of unfulfilled customer jobs on its order book. That has been sold to fellow window installation firm Anglian for £2m.

They have also revealed further details about the circumstances of the firm’s collapse, stating it was “significantly loss-making” by summer 2023 after being hit by factors including higher inflation on raw materials, softening demand from consumers and a 2022 cyberattack.

It said the firm’s trading losses and high operational leverage resulted in an effort to seek further investment from shareholders which was unsuccessful.

Interpath was engaged by the company in September to seek a potential sale of the business and despite 22 interested parties signing non-disclosure agreements to receive further information no deal was struck. Of the 22, five parties received presentations from Safestyle’s management team.

Administrators said: “Whilst significant interest was received and discussions with interested parties reached advanced stages, ultimately by October 27 there were no offers that could be proceeded within the timeframe available, given the company’s cash position. As such, the directors resolved to appoint administrators.”