Creditors to vote next week on CVA proposal for Squibb

Creditors of demolition contractor Squibb Group are being asked to decide whether to accept a Company Voluntary Arrangement next week.

Letters were sent out to creditors by financial advisory firm Begbies Traynor, which was called in earlier by Squibb directors, nearly two weeks ago and have been signed by one of the joint nominees for the plan.

The letter, seen by Building, says that a vote on the proposal will be made next week on 9 November. A CVA governs how a company’s debts will be paid and in what proportions.

In the letter, Begbies Traynor writes that “we are of the view that the proposal has a reasonable prospect of being approved and implemented and therefore that a decision of the creditors should be sought”.

Squibb, which is also the subject of a winding-up petition from HMRC, has been going since 1948 and in its last set of results filed at Companies House, the firm saw turnover rise 5% to £32.9m in the year to January 2022. Income at its demolition business rose 6.5% to £31m.

Its pre-tax profit during the period fell from £1.6m to just under £275,000. The firm said it was hit with £600,000 of exceptional items, including £100,000 of covid costs and a further £500,000 set aside for contract settlements and adjudications.

The accounts also show the amount of cash in hand and at the bank fell from just over £1m to £35,000 during the period.

Debtors owed Squibb, which has been contacted for comment, £18.7m while the firm’s creditors were owed just over £13m.

In the summer, the firm said it was extending its current trading period from a year-end of 31 January to 31 July meaning its next set of accounts will cover an 18 month period.

Squibb was one of 10 firms fined a total of £60m in March by the Competition and Markets Authority (CMA) for its involvement in the sector’s bid-rigging scandal.

The CMA cleared it of making so-called ‘compensation payments’, having initially been found guilty of doing so, with Squibb hit with a £2m fine.

Squibb is appealing the fine because, it said, the penalty was “disproportionate when seen in the context of the wider investigation and the other infringements discovered as part of the CMA investigation”.

Keltbray, another firm found not to have been involved in compensation payments, is appealing its £16m penalty, arguing that its fine is too high as well.

The hearings will take place next spring with a decision expected in the summer.