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The cost of late payments

The news that that one of the largest UK packaging machinery agencies, Sussex and Berkshire, could crash came as a shock to the industry last month.

The 22-year-old company, which includes subsidiary Stick-pack Europe, was spared from voluntary liquidation at the eleventh hour after the courts decided S&B could continue trading under administration. Appointed administrator Begbies Traynor of Bristol will run the business as normal until it can be either sold as a going concern or an agreement with creditors is made to settle debts, enabling S&B to regain control. Meanwhile a 24-strong team from the original 50+ plus will hold the fort.

Managing director Derek Moore attributes the situation to a cash flow problem caused by late payments by UK customers who hold on to S&B money for as long as possible and machinery suppliers overseas who pay S&B commission on machinery sales. Mr Moore believes that this is part of a bigger picture affecting the UK packaging machinery industry.

“The downturn in industry over the last 18 months, along with the habit of machinery buyers to sit on a percentage of payments after delivery, and the undercutting of prices by smaller manufacturers are all contributing factors to S&B’s current crisis,” says Mr Moore.

“We have not been paid by one of our largest debtors due to delays on delivery of machinery which has now exceeded six months!”

S&B made £10M in machinery sales last year and was on target to reach £14M this year.

Any would be investors or indeed purchasers, interested in a company like Sussex & Berkshire should contact Andrew Beckingham or Simon Haskew, Begbies Traynor, 58 Queen Square, Bristol BS1 4LF [tel: 0117 929 4800].