Agency by William Gibson 
A collapsed restaurant chain has still not found a buyer – although the management company running it has managed to turn a small profit, an administration report has said.
Flat Cap Hotels collapsed in January, with debts included £13.4m to a finance company. The company had £14m in assets but owed a net £6.8m, and its profit and loss account was showing a deficit of more than £7m.
It blamed the pandemic, rising energy costs and unexpected increases in inflation and interest rates, which had a “significant impact” on the Cranage-based hotel operator. Flat Cap Hotels, incorporated in May 2015, was based on Middlewich Road, Cranage, and owned the Vicarage in Holmes Chapel as well as the Bridge in Prestbury, and leased the Courthouse in Knutsford.
At the time of its collapse, the company employed 177 people across housekeeping, reception, the restaurant and kitchen, and head office, the statement of affairs from the administrator has said.
In a report on progress so far, the joint administrators said they had appointed auctioneer Christie’s to sell the business, including the properties, as part of the overall business sale.
The administrators said they had received “a number of offers” for the hotels although none had been progressed while options continued to be assessed.
None of the offers would fill the “substantial shortfall” as regards major finance lender and would offer no return to any other class of creditor.
There was better news on the ledger than in the sale room.
Specialist hotel operator Condor – which has experience of turning round collapsed companies – was appointed to manage the day-to-day operation of the hotels and to hold the premises licences, to allow the hotels to continue to trade as normal.
A forecasted loss for the anticipated sale process period was “materially lower” than expected and recent trading figures showed “a marked improvement” in trading with both retained hotels returning a modest profit, the administration report said.
Key management staff have been retained and all bookings made prior to the appointment of the administrators were honoured.
As of 30th June, and based on management accounts produced by Condor, Flat Cap achieved sales of £1.lm. While in January, immediately after the collapse, the company lost £138,459 this fell in February to £75,672 and by May the company recorded a small profit of £5,079. The total loss since January is still £330,441, despite Condor’s efforts.
Flat Cap Hotels was established in 2017 “to safeguard and cherish magnificent grade II listed venues in Cheshire”.
The company opened The Vicarage in 2015 followed by The Courthouse in 2017 and The Bridge in 2018.
The website of The Vicarage, which has 23 bedrooms, states: “The Vicarage sits on the banks of the river Dane, overlooking the stunning Cheshire countryside and blends old with new, featuring architecture dating back to the 1700s as in the old Vicarage to the modern industrial bar, iconic neon signs and surround sound sports bar.
“This grade II listed venue has been perfectly future-proofed by Flat Cap Hotels and contemporarily restored.”
Flat Cap Hotels are not only the hospitality sector company to run into problems.
As we reported recently, Higher Ground Cafe Bar Limited, of 56, High Street, Congleton, the former Williams and Glyn’s and Royal Bank of Scotland, has appointed liquidators.
A statement of affairs showed the company had £28.60 in assets but owed HMRC £62,692.61 in VAT and £9,764.78 in PAYE.
It also has trade and expense creditors of £30,882.78 and an inter-company debt of £43,934.67, owed to Dajani Business Consulting. Its directors were owed £142,129.71, making its total debt £289,375.95.
Trade debts include to Levant Street Food, of Newcastle, which is owed £13,704.24.
That business is also still trading.
(Photo: Flat Cap Hotels).
