Family-run shotblaster is latest lockdown victim
Another company in the north east of Scotland has called in administrators after struggling with the impact of the pandemic and growing cash flow problems.
Blair Nimmo and Geoff Jacobs of Interpath Advisory have made most of the 13 employees of Peterhead-based GCG Shotblasting Services redundant.
Operating from one of the largest yards in Scotland, it has the ability to coat any size of equipment in its purpose-built Peterhead base from where it has operated for more than 30 years, together with on-site activities at client sites.
The family-owned company had expanded its trading activities in recent years. It also invested in research and development to broaden its service offering. It is headed by executive director Michael Gaffney, son of one of the founders.
However, a reduction in on-site work due to lockdown restrictions and the cancellation of contracts stemming from COVID-19, the company’s revenues were significantly impacted and, against a fixed cost base, losses arose which resulted in cash flow difficulties.
Despite a recent uptick in activity levels and efforts made by the directors to turn the position round, cash resources were not available to service ongoing commitments and increased debt levels.
Having considered all available options and having sought to raise additional funding or investment, which ultimately could not be secured, the directors determined that an administration appointment was necessary.
The business could not continue to trade and therefore there was no option other than for the majority of the company’s 13 employees to be made redundant immediately upon appointment of the administrators. The remaining employees have been retained for a short period to help with various administrative matters.
Mr Nimmo, joint administrator, said: “Despite the best efforts of the directors and improving activity across the market, this is unfortunately another company that has been adversely impacted as a result of COVID-19 delays and debt build up.”
Joint administrator Mr Jacobs added: “This is a disappointing outcome for a long-established family-run business. However, we will now take steps to support the workforce and look to secure a sale of the assets comprising primarily, its property, plant and machinery, well-known business name, order book, work in progress and customer list. Interested parties should make contact in early course.”
Last week the Stoneywood, Aberdeen factory of paper manufacturer Arjowiggins was put into administration with the loss of 368 jobs.