Overview:
J Hesketh (Engineering) Limited was incorporated on 7 April 1988 and operated for many years as an established engineering and construction business, working mainly on utility‑related projects from its base in Wigan.
Over time, day‑to‑day trading became more difficult for the company due to bad debts, cashflow pressure and changes to the scope of work on projects. These issues were not always identified or addressed early, which meant financial problems gradually became more difficult to manage.
In an effort to improve its position, the company entered into a Company Voluntary Arrangement (CVA) in early 2023. While the CVA was intended to give the business time to stabilise, trading pressures continued and the arrangement was repeatedly breached. This indicated that the underlying issues had not been resolved.
Professional advice was therefore sought, which led to the appointment of David Kemp and Richard Hunt from Exigen Group to place the Company into Administration and take control of the situation. A pre-pack sale of the business and assets took place, maximising the position and preserving jobs.
CVA Background
The CVA was intended to give the company time to stabilise while continuing to trade.
However, the business continued to experience cashflow pressure, which led to missed contributions under the arrangement and continuing tax liabilities. Over time, it became clear that the company was not able to keep up with the terms of the CVA.
As the position worsened, further action was needed to protect creditors and preserve the business.
Financial Challenges
The Company’s financial difficulties developed gradually and reflected pressures commonly seen in the engineering and construction sector. Margins were tight, costs remained high, and cashflow was affected by delayed payments and slow‑recovering debts.
There were also issues with financial visibility and control, which made it harder to spot and deal with problems early.
Exigen’s Appointment and Outcome
Exigen Group became involved via introduction from its sister company, Touch Financial, as a result of issues linked to their invoice finance arrangements.
Administration was selected as the most appropriate option, as it allowed the position to be brought under control quickly and a structured outcome to be implemented.
A pre-pack sale of the business and its assets was completed to an associated entity. This allowed the underlying trade to continue, while separating it from the Company’s historic liabilities.
Key Outcomes Include:
- A sale of the business and assets was achieved through Administration.
- Employees transferred to the new entity, ensuring continuity of employment.
- The business has continued to trade under new ownership.
- The outcome for creditors will depend on the realisations achieved through the process.
Administrator Comment
David Kemp of Exigen Group said:
“A CVA can be a useful tool, but it relies on the business being able to meet its commitments and maintain a healthy cashflow. It also depends on having clear financial visibility and control.
When businesses aren’t closely tracking performance or responding to changes early enough, it becomes much harder to recover the position. In this case, Administration allowed us to bring matters under control and ensure the business itself could continue.”