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Businesses in financial trouble

fiza

By fiza
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6Foot2

6Foot2

Posted
Posted

Link: Cazoo: Online used car retailer close to collapse - BBC News

 

Troubled online used car retailer Cazoo is close to entering administration, putting about 1,000 jobs at risk.

 

The move marks a fall from grace for a company that became one of the darlings of the pandemic, when car buyers were forced to make their purchases online.

 

The firm was launched in 2018 by Alex Chesterman, who also founded the property website Zoopla and LoveFilm, a predecessor of Netflix.

 

Its popularity during lockdown meant that when it listed its shares on the New York Stock Exchange in 2021 it was valued at $7bn (£5bn). That has now dropped to just $30m.

 

Cazoo's filing with the US Securities and Exchange Commission, external means it must find a buyer or appoint administrators within 10 days.

 

It came shortly after the company admitted, external it was struggling to raise money from investors, and said it would miss the deadline to file its annual accounts.

 

In March, Cazoo said it had sold off its remaining stock and switched to an online marketplace model, allowing car dealers to list their own stock on its platform. It also wound down its European business.

 

Despite its valuation in 2021, it has never made a profit. In 2022 its losses rose to £704m, external from £544m the year before, and in December it restructured $630m of debt, external. It said it had sold 120,000 cars in the UK.

 

The company said it had explored "strategic alternatives" to insolvency, including selling off parts of its business, but a buyer has so far not come forward.

 

The number of people working for Cazoo has dropped sharply in recent years, from 4,500 in 2021 to about 1,000 today.

 

In January 2023, Mr Chesterman stepped down as chief executive, becoming Cazoo’s chairman, then left the business altogether in December. His replacement as chief executive, Paul Whitehead, stepped down in March.

Homer

Homer

Posted
Posted
How the hell did they manage to blow Cazoo so badly. Greed! That should have made money, and gone for a long time.
  • 2 weeks later...
6Foot2

6Foot2

Posted
Posted

 

Update:

 

Link: Cazoo: What went wrong for the online used car retailer? - BBC News

 

Online used car retailer Cazoo has fallen into administration, after cutting hundreds of jobs as part of a big restructuring.

 

Cazoo became popular during the Covid pandemic when restrictions forced car buyers to browse and make their purchases online.

 

But the loss-making company has been struggling to raise money from investors, and in March changed its model from being a dealer, where it bought and sold cars itself, to a marketplace where consumers can buy and sell cars.

 

That move has led to 728 redundancies, administrators Teneo said, after being appointed to try to find a buyer for the business.

 

Teneo said the firm's 208 remaining staff would be retained for the time being during the administration process.

 

It is a dramatic fall from grace for the business, which surged in popularity during the pandemic and subsequent lockdowns.

 

Back in 2021, if you hadn't used Cazoo, you probably would have seen or heard of it. Its branding was splashed everywhere, with the company sponsoring Premier League football teams Aston Villa and Everton, as well as a host of other major sporting events like darts and snooker.

 

Cazoo was different to other more traditional car dealers - it was a tech business trying to shake up a well-established order.

 

The platform allowed shoppers to buy, part-exchange and finance vehicles entirely online. People could order while sitting on the sofa, and the vehicle would be delivered to their home in as little as 72 hours, with a seven-day returns policy.

 

Launched in late 2019, the pandemic massively boosted the firm's fortunes. As well as Covid restrictions meaning people could only buy second-hand cars online, a worldwide microchip shortage that disrupted new vehicle manufacturing also played into Cazoo's hands as used car prices soared.

 

The environment fuelled an astonishing increase in the company's value. When it listed on the New York Stock Exchange in September 2021, it was valued at a whopping $7bn (£5bn). Now, its valuation has dropped to just $30m.

 

In November 2021, Cazoo's founder Alex Chesterman - who also launched property website Zoopla and LoveFilm, a predecessor of Netflix - told the BBC that gaining just a small percentage of the market would create an "enormous business", arguing that Cazoo offered customers a simpler experience, greater choice and transparency on price.

 

The platform went on to launch in France, Germany, Spain and Portugal. At its peak, Cazoo employed 4,500 people in 2021.

 

But despite the mission to transform the car-selling industry, the feel-good factor surrounding Cazoo began to fade.

 

'Cars are fundamentally different'

 

The business has never made a profit. While this is not unusual for a start-up - in fact, Mr Chesterman said he expected this to be the case for two or three years after going public - its losses grew,

 

In 2022 it posted a loss of £704m, up from £544m the year before, and in December last year it restructured debts of $630m.

 

According to Catherine Faiers, chief operating officer at car marketplace giant Auto Trader, while Covid saw a shift to online purchasing becoming the norm for many goods, "cars are just fundamentally different to other things you buy".

 

She says the majority of UK consumers prefer a blended approach of researching online, but then seeing the car and speaking to a dealer in person before handing over their cash.

 

"Buying a car is a bit like buying a house. It's the second-most valuable thing that most people buy. We name our cars. When you ask people why they own a car it reads a bit like the American constitution - 'I own a car because it gives me freedom, it gives me independence, it's empowering,'" Ms Faiers says.

 

Kevin Gaskell, former managing director of Porsche, Lamborghini and BMW, says Cazoo's problems were down to a "simple fact of trying to get a foothold in a very sophisticated, very established market".

 

"They believed that they could come in and become an online retail business and provide a full service but car dealers are already doing that. There's nothing new in the model that they developed," he told the BBC's Today programme.

 

"They've spent a huge amount of money developing the brand. In terms of their revenue, it has got nowhere near where they expected it to be."

 

Changes at the top

 

Mr Chesterman stepped aside as chief executive in January 2023 and perhaps the writing was on the wall for Cazoo when he left the company altogether in December.

 

His replacement, Paul Whitehead, stepped down in March this year - the same time that Cazoo announced it had sold off its remaining stock and switched to an online marketplace model, allowing car dealers to list their own stock on its platform, and wound down its European business.

 

The company has said it explored "strategic alternatives" to insolvency, including selling off parts of its business, as it struggled to raise cash from investors, but no buyer came forward.

 

When contacted by the BBC for comment on Cazoo's downfall, Mr Chesterman said he had had no involvement with the company for more than 18 months and declined to comment further.

 

Philip Nothard, insight and strategy director at Cox Automotive, says Cazoo did force many of the established players to adapt, but as supply problems and microchip shortages have dissipated, it allowed others to catch up.

 

"They came in quick, they came in heavy, they came in with a concept that on the face of it worked in many ways," he adds

 

"[but] in time, established retailers could offer what Cazoo were offering. They could offer that digital omnichannel, e-commerce experience. And essentially they had a physical infrastructure already in place."

jthompson

jthompson

Posted
Posted

This is probably stretching the definition of the word "Business" somewhat, but...

ArsTechinca: Humane AI Pin is a disaster: Founders already want to sell the company

The wearable startup Humane, makers of the bizarre Humane AI Pin, is already looking for the exit. Bloomberg reports the company is seeking a sale after its first and only product launch was a big flop. Despite seemingly having nothing else in the pipeline and the AI Pin being dead on arrival, Bloomberg reports the company is "seeking a price of between $750 million and $1 billion in a sale.
  • 1 month later...
6Foot2

6Foot2

Posted
Posted

Link: Harland & Wolff temporarily suspends trading as it delays accounts | Shipping industry | The Guardian

 

The shipbuilder Harland & Wolff has been forced to temporarily suspend trading in its shares after accounting issues meant it was unable to file audited accounts on time.

 

The Aim-listed company, which owns the shipyard where the Titanic was built, said on Monday that it would suspend trading with immediate effect because accounts had not been filed.

 

It expects to publish the accounts in the week commencing 8 July, with share trading resuming at that point.

 

The Belfast-based shipbuilder was plunged into uncertainty last month when it was reported that the UK government was witholding the approval of a £200m loan guarantee promised in December to shore up its finances.

 

The update on Monday said that because of the “multi-year and complex nature” of some of its contracts, it had been in “extensive discussions” with auditors over how best to record revenues over the duration of a build programme.

 

It said that this was particularly relevant when assessing incomes from its seven-year contract with the Spanish shipbuilder Navantia to assist in the construction of fleet support ships for the Royal Navy, a deal that is expected to net the UK company £750m.

 

It added: “The assessment of the split in revenues between current year’s revenues and deferred revenues has caused a delay to the audit process and hence the publication of the company’s annual report and audited financial statements.”

 

The company was able to publish unaudited accounts in which it posted an operating loss of £24.7m for the 12 months until 31 December 2023, an improvement on a £58.5m loss a year earlier. Revenues increased from £27.8m in 2022, to £86.9m this year.

 

In May, the GMB union wrote to the chancellor warning that any decision to block the £200m loan guarantee that had been offered to Harland & Wolff would put jobs at threat.

 

The letter was prompted by reports that the government was looking to withdraw support for a £200m loan facility Harland & Wolff had applied for through UK Export Finance. The money would allow it to borrow to pay off expensive debts owed to Riverstone Credit Partners, a US investor.

 

In the update, the company said further work was continuing on the facility and it expected that a decision would be made after Thursday’s general election.

 

It added: “Should there be any material delays to securing the facility post the general election, the company’s ability to execute new and large contracts would be adversely affected.”

 

Harland & Wolff also owns ports across England and Scotland, including Methil on the Firth of Forth, Appledore in North Devon and Arnish Point on the Isle of Lewis.

  • 2 weeks later...
6Foot2

6Foot2

Posted
Posted (edited)

Link: South East Water: Firm says it needs extra cash from investors - BBC News

 

South East Water says it needs more cash from investors to stay afloat ahead of a ruling on its future spending plans by water regulator, Ofwat.

 

The water firm, which supplies about 2.3 million customers in Kent, Sussex, Surrey, Hampshire and Berkshire, said it was in discussions with lenders and shareholders in a results statement, external published on Wednesday.

 

It is already on watchdog Ofwat's watch-list for financially-at-risk companies, alongside Thames Water.

 

“If it is not possible to raise the additional liquidity, the group and therefore company would not have sufficient liquidity for the going concern period,” the results statement said.

 

It says that talks are at an "advanced" stage, while directors "expect to raise sufficient additional liquidity".

 

But a deal has not yet been struck on the investment.

 

The statement said: “The risk that the funding will not be received constitutes a material uncertainty that may cast significant doubt on the ability of the group and company to continue as a going concern”.

 

On Thursday, Ofwat is set to deliver a draft verdict on water companies' proposed five-year spending plans and bill increases.

 

A final decision will be made in December, following a negotiation period between the regulator and water companies.

 

South East Water has put forward plans that would see spending increase to £1.9bn, including through raising customer bills by 22%, to maintain and update its infrastructure.

 

The firm's pre-tax loss fell to £36m for the year to 31 March, down from £74m the year before.

 

It is also under investigation by the watchdog after failing to deliver water to thousands of customers in Kent and Sussex for more than a week.

 

South East Water said it had "entered into a constructive and transparent dialogue" with Ofwat since the investigation was launched.

 

"We'd like to apologise to customers who experienced supply interruptions," the company said.

Edited by 6Foot2
Formatting. :(
LeMarchand

LeMarchand

Posted
Posted
South East Water says it needs more cash from investors to stay afloat ahead of a ruling on its future spending plans by water regulator, Ofwat.

 

The water firm, which supplies about 2.3 million customers in Kent, Sussex, Surrey, Hampshire and Berkshire, said it was in discussions with lenders and shareholders in a results statement, external published on Wednesday.

 

It is already on watchdog Ofwat's watch-list for financially-at-risk companies, alongside Thames Water.

 

“If it is not possible to raise the additional liquidity, the group and therefore company would not have sufficient liquidity for the going concern period,” the results statement said.

 

It says that talks are at an "advanced" stage, while directors "expect to raise sufficient additional liquidity".

 

But a deal has not yet been struck on the investment.

 

The statement said: “The risk that the funding will not be received constitutes a material uncertainty that may cast significant doubt on the ability of the group and company to continue as a going concern”.

 

On Thursday, Ofwat is set to deliver a draft verdict on water companies' proposed five-year spending plans and bill increases.

 

A final decision will be made in December, following a negotiation period between the regulator and water companies.

 

South East Water has put forward plans that would see spending increase to £1.9bn, including through raising customer bills by 22%, to maintain and update its infrastructure.

 

The firm's pre-tax loss fell to £36m for the year to 31 March, down from £74m the year before.

 

It is also under investigation by the watchdog after failing to deliver water to thousands of customers in Kent and Sussex for more than a week.

 

South East Water said it had "entered into a constructive and transparent dialogue" with Ofwat since the investigation was launched.

 

"We'd like to apologise to customers who experienced supply interruptions," the company said.

 

Were they trying to squeeze in water-related language? Also, I can see an easy saving for them but can't go into it here.

  • Thanks 3
  • 2 weeks later...
Dos_Box

Dos_Box

Posted
Posted
I wonder if Cloudstrike will survive?

 

If prior industry examples are anything to go by, and I'm thinking about LastPass here, then it's usually two strikes and you're out.

With something like Cloudstrike, I imagine untangling yourself from that to another platform for large companies and organisations would be a task not undertaken lightly.

  • Thanks 1
  • 2 weeks later...
6Foot2

6Foot2

Posted
Posted

 

Link: Harland & Wolff axes Scilly fast-ferry service as it agrees £20m loan | Shipping industry | The Guardian

 

A fast ferry service to the Isles of Scilly has been axed before carrying a single fare-paying passenger, as the struggling operator Harland & Wolff winds down all “non-core” businesses.

 

The stricken Belfast-based shipyard company that built the Titanic announced the closure of its Scilly Ferries subsidiary on Thursday as it confirmed details of a rescue funding deal with its lenders, led by a US investment firm.

 

In a statement to the stock market, Harland & Wolff said it was winding down all non-core businesses to focus on its four main shipyards in Belfast, Appledore, Methil and Arnish.

 

The Atlantic Wolff fast catamaran, which was to be used on the Scilly Ferries service from Penzance, will be returned to its Dutch manufacturer, Damen Group. The much-delayed new ferry sailings were scheduled to begin in May but the high-speed vessel arrived in Cornwall only in July and never entered revenue-earning service.

 

Customers with reservations on the Atlantic Wolff will be contacted directly, the company said.

 

Harland & Wolff said launching the Scilly Ferries operation was “overly ambitious, given the current circumstances” of its financial difficulties.

 

The company’s interim executive chair, Russell Downs, who was parachuted in by lenders in July to take over from John Wood, said the Scilly Ferries shutdown would be “difficult news for those affected immediately and for the community it was intended to support”.

 

Downs, a former chief executive of Harland & Wolff, added: “It is important to note that this is an isolated and unique situation within the group, which continues to deliver its business as usual, serving its ship repair fabrication and ship building customers.”

 

Harland & Wolff Marine Services, which provides carriage of freight between the mainland and the Isles of Scilly, as well as workboats for projects across the UK and Europe, will continue its operations unaffected.

 

The company also confirmed details of a new loan agreement with its lenders, led by the US asset manager Riverstone.

 

Harland & Wolff had been hoping to secure a £200m loan guarantee from the taxpayer and had been in discussions over a bailout with the previous Conservative government.

 

But the new Labour administration has confirmed it will not provide any state backing to secure the future of Harland & Wolff, leaving the company reliant on funding from its private lenders.

 

Under a deal with creditors, including Riverstone, the company will increase its existing loan facility by $25m (£20m) to $140m “in order to improve and stabilise the liquidity position of the company and its subsidiaries”.

 

Financial advisers from Rothschild & Co have been appointed to explore options for the future of the group, which some insiders have suggested could involve a breakup and sale of assets.

 

Malcolm Groat, the chair of Harland & Wolff, said: “We are grateful to our lenders in continuing their funding commitment to support Harland & Wolff Group’s ongoing stabilisation and long-term strategy objectives.

 

“We also look forward to working with the very experienced team from Rothschild & Co to help us achieve that objective.”

 

Groat thanked Wood, who led a previous rescue of the company in 2019 but is leaving under conditions imposed by the lenders.

  • 3 weeks later...
southhamster

southhamster

Posted
Posted
Sad. I had a little engine as a lad, back in the days when you could trust kids not to set themselves alight with paraffin powered toys.

 

[ATTACH=CONFIG]72049[/ATTACH]

Multum_Circular_Saw.jpg

Circular saw attachment for the above. What could possibly go wrong...:)

 

That reminds me (@mikeprice anecdote coming up), compulsory metalwork classes at school were potentially pretty hairy but somehow we managed not to burn/maim/kill ourselves in the forge/lathes/mills etc.

I'm always grateful as it inspired a lifelong confidence of proper handling of tools and materials, even if we spent weeks learning how to saw and file metal :(. One project was making a steam turbine using a cocoa tin and soldered bits. Applying too much heat caused the lid to fly upwards causing great excitement and cheering from us and a stern lecture from our teacher, and demonstrated why safety valves are kind of essential...

I'm delighted to see that such a thing still exists! Probably best not to to make one at home, or anywhere really. Definitely not in school.

steamtin.jpg

  • Thanks 3
Dos_Box

Dos_Box

Posted
Posted
[ATTACH=CONFIG]72052[/ATTACH]

Circular saw attachment for the above. What could possibly go wrong...:)

 

That reminds me (@mikeprice anecdote coming up), compulsory metalwork classes at school were potentially pretty hairy but somehow we managed not to burn/maim/kill ourselves in the forge/lathes/mills etc.

I'm always grateful as it inspired a lifelong confidence of proper handling of tools and materials, even if we spent weeks learning how to saw and file metal :(. One project was making a steam turbine using a cocoa tin and soldered bits. Applying too much heat caused the lid to fly upwards causing great excitement and cheering from us and a stern lecture from our teacher, and demonstrated why safety valves are kind of essential...

I'm delighted to see that such a thing still exists! Probably best not to to make one at home, or anywhere really. Definitely not in school.

[ATTACH=CONFIG]72053[/ATTACH]

 

Toys that teach you respect for consequences are the best toys!

  • Thanks 2

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