Manufacturer and distributor of office furniture across the corporate, health, education and retail sectors, Southernsbroadstock, has been sold in a pre-pack deal after entering administration.

Michael Magnay and Mark Firmin, both of Alvarez & Marsal Europe LLP, were appointed as joint administrators of Southerns Broadstock Limited on 20 January 2025.

In the build up to its administration, the company suffered lowered than expected sales during the first quarter of FY25. The reduced sales were attributed to the financial issues faced by many higher education institutions during 2024.

Due to the depressed sales, the company struggled to manage its liquidity position, while delays in projects put additional pressure on cash flow into the second quarter.

In the five months to November 2024, sales were tracking around 35% behind the same period and an operating loss of £1.2m was incurred. This result led the company to require around £3.5m in forecast funding, and although it received a cash injection of £300,000 from its shareholder, no further funds could be secured.

Upon entering administration, the company was sold in a pre-pack deal to Southerns Broadstock Interiors Limited, a connected party incorporated on 9 January 2025, for a sum of £240,000, which was paid in full. Due to the sale, 79 employees were transferred under TUPE.

As for creditors, preferential creditor, the HMRC, is owed £320,000, while unsecured creditors are owed a combined sum of £3.8m. Administrators said that at this stage it looks like creditors will suffer a shortfall of the entire amount owed.