11:01 am, December 21, 2023
Troubled franchised car dealer CMS Kidderminster has laid bare the full extent of its financial woes after the firm began making staff redundant.
Car Dealer reported earlier this year that employees were being let go after the Vauxhall dealer fell into administration back in August.
That came after bosses were forced to call in professional advisers due to an unexplained discrepancy of £3,689,292 in company accounts.
The irregularity, which bosses were unable to reconcile, was in relation to a stock contra account at the new and used Vauxhall dealer.
More details of the firm’s finances have now been made public in a pair of bleak submissions to Companies House.
The documents, published last month, reveal that, as of August 16, the business had £3.8m in assets, which can be made available to pay preferred creditors.
The statement of affairs also shows that the firm had £3.06m in the bank despite carrying book debts of £2.16m.
Meanwhile, administrators Tony Wright and Rajnesh Mittal, of specialist firm FRP Advisory, have confirmed that the dealer owes a combined £4.9m to a total of 126 creditors.
The sums range from £2.07 owed to ASMF Car Parts all the way up to £3.4m owed to Vauxhall Motors Ltd.
Elsewhere, in a separate document, it has also been confirmed that the firm’s creditors have agreed to a number of proposals put forward by the administrators.
In a meeting, the creditors agreed they wouldn’t form a ‘creditors committee’ and approved payment of the joint administrators’ fees and expenses, totalling £17,908.50.
They also agreed to pay administrators on a ‘time cost’ basis, which is estimated to be £856,670, plus VAT.
CMS’s issues began with the publication of its annual accounts for the year ending December 31, 2021.
The documents state that the Vauxhall dealer made a pre-tax profit of £487,475 following a £79,295 loss the year before.
That was on a turnover of £94.3m versus £83.5m in 2020. It received £36,794 and £195,838 in government grants in 2021 and 2020 respectively.
But in the accompanying strategic report, under a section entitled ‘Stock discrepancy’, the board says that before the 2021 year-end audit, the directors found ‘un unexplained discrepancy of £3,689,292 in the accounts in relation to a stock contra account that they were unable to reconcile as at 31 December 2021’.
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