Television post-production business Sumner’s Media City has entered into company liquidation, with an estimated eleven individuals believed to have subsequently loss their jobs.
Sumner have undergone a progressive decline in their financial fortunes over the past few years, after its direct competition strengthened and the BBC decided to move production provider to MediaCityUK.
The impact of this on the finances of Sumner was immediate and in December 2013 they entered into a Company Voluntary Arrangement after defaulting on £17,000 worth of debt with its supply and equipment providers.
The company was set up back in 1992 by partners Andy and Janet Sumner and had previously enjoyed the status as the UK’s biggest post-production business outside of the capital. At its highest point, the company is believed to have had an annual turnover exceeding £4 million.
However, Manchester-located company rescue experts, The Business Debt Advisor, have now been officially assigned the role of liquidators for the business and will now provide guidance to its directors and stakeholders about the best measures to take to try and secure its future and achieve a sale.
Bev Budsworth, managing director of The Business Debt Advisor, said: “SMCL acquired the majority of the equipment and set-up operations at The Pie Factory. However, higher than expected set-up costs and delays, meant that the company had to fund overheads with no significant income for three months.
“Turnover for the first year of trading was £800,000, with the business making a loss of £30,000, which was actually really good, given the circumstances. However, this year has seen income decline due mainly to increased competition and the slow drift of Manchester post production work back to London.”
Budsworth added: “The Sumners name has been largely synonymous with the post production sector in the North West over the last 25 years.
“Unfortunately, Sumners seems to have been a victim of funding issues and ultimately stricter invoice discounting terms made it impossible to continue trading. Even more unfortunate is the fact that eleven staff have lost their jobs as a result.”
Bucking the Trend
Despite Sumner’s recent financial struggles, news of their liquidation has seemingly bucked the insolvency trend displayed by the UK’s businesses in 2014 thus far, with the latest Experian figures describing insolvency rates displaying that it had fallen during the first half of this year to 0.44%, compared to 0.47% during the same period the year before.
Experian identified that the North-West, the Midlands and Wales represented Britain’s most improved business landscapes, with the former witnessing a drop in total insolvencies to just 0.46% – down from the 0.56% the year before.
And the study also revealed that it is company liquidations which have fallen in usage over the past year, with statistics indicating that just 0.51% of medium-sized companies have decided to use this insolvency measure during the first six months of this year- down considerably from last year’s 0.72%.
Only smaller companies (who employ one or two members of staff) were identified to have retained the same 0.32% insolvency rate as the year before, whilst Scotland and the South East were highlighted as the only areas in which company liquidation rates rose, from 0.1% to 0.28% and 0.41% to 0.42% respectively.
Experian’s managing director, Max Firth, has described the findings of the study as ‘great news’ and has argued that the recent figures clearly illustrate the positive impact that the country’s recent economic upturn has had on its business landscape.
Mr Firth said:“The fall in insolvencies is in line with the more positive economic backdrop. Improving business confidence and rising market demand is underpinning a greater willingness among firms to employ more people, which is good news across the UK.
“Insolvencies among the UK’s smallest firms – one and two man bands – did not worsen, but did not improve either. A key component to surviving as a small business is to keep an eye on the fortunes of their biggest customers and key suppliers. If either of these go out of business then the impact will reach them too.”