Capital Cooling has secured the future of the company after being rescued by a pre-pack administration deal.
Beheren Ltd, which has directors Steve Steadman, Christopher Campbell and Gold Round Ltd in common with Capital Cooling, bought the commercial refrigerator business and its assets for just over £4m on 30 July.
This is the second time Capital Cooling has entered administration in recent years, after it was rescued from insolvency in December 2017 by another pre-pack deal, in that instance brokered by auditor KPMG.
At that time, private investor Rcapital bought the company for £300,000. In the pre-pack proposal documents seen by Catering Insight, it details that since that time Capital Cooling had been loss-making, but a turnaround plan was in place and it was anticipated that the company would return to profitability in 2020. In the management accounts as at 31 May 2020, the company’s turnover reached just over £9.3m, with a gross profit close to £2m.
However, the coronavirus pandemic put paid to that intention, and despite furloughing staff, Capital Cooling was still suffering losses. Therefore, on 30 July 2020, Carl Jackson and Simon Campbell of business recovery specialist Quantuma were appointed as joint administrators of the company.
As part of the pre-pack deal, the company plans to move all warehouse and logistical capabilities to Northamptonshire over the coming months, after having operated from just outside of Edinburgh since the business’ founding in 1996.
All 47 employees were transferred over to the new business structure, ensuring no redundancies had to be made.
Commercial manager Fraser Scotcher detailed: “Like the majority of businesses, Capital Cooling has not been immune to the unprecedented circumstances surrounding the global pandemic. They introduced an element of uncertainty for the company, however, thanks to the ongoing support of our owners, this potentially troublesome situation has now been turned into a positive and the company sits on stronger foundations than ever before.
“The pandemic hit at the worst possible time for our business, we had just returned to profit and had seen turnover almost double in just 18 months. While we looked for support from both the UK and Scottish governments, we were unfortunately unsuccessful and were left in a position where we needed to make some tough decisions to secure the future of the business.”
While Steadman, the CEO of the firm, said of the move: “While Capital Cooling will always have roots in Scotland, it was clear to see that the operational side of the business was simply in the wrong part of the country.
“More than 80% of our deliveries take place south of the border and by shipping all goods to Edinburgh to then return them back down south for delivery was not only poor for efficiency but also for our environmental impact.”
With this in mind, Capital Cooling is relocating to a new operational hub in the coming weeks. The company believes this 26,000ft2 new-build facility just off the A14 in Kettering is in the most suitable geographical location to serve the entire UK. It will be home to 24,000ft2 of warehousing while a showroom and 2,000ft2 of office space will be used by the southern based members of the team.
Scotcher added: “This move also allows the business to exit our current head office just outside of Edinburgh with the team moving to a much more modern and sustainable facility just 3 miles away within the industrial hub of Livingston.”
Capital Cooling aims to complete the move to Livingston in in the next 6 weeks with full relocation to Kettering taking around 12 weeks.
Steadman underlined: “The goal of this plan was to secure the long term future of the business and ensure job security for all members of the team. We have succeeded in doing so and we will continue to have our finance, sales, marketing, warranty and customer service departments all operating from our new Livingston office while anyone effected by the relocation has been offered an alternative position.”
According to Scotcher: “This restructure has enabled us to secure the long-term future of our entire workforce – there have been no redundancies as part of this process.
“We continue to have the support of all of our key suppliers and will honour all orders and warranties for our clients – in all honesty with the exception of a change of bank account details it should be a seamless transition for them.”
While Steadman hinted: “We will be launching new ranges of innovative products for the retail, hospitality and foodservice sectors in the coming weeks and months while the KubePlus and KubeUltimate coldroom ranges will also be growing.
“Furthermore, our team have been using the Covid-19 enforced lockdown to develop and introduce new CRM and service management systems which will improve communication channels and operational visibility for all of our customers.”