The reports of Lloyd Fraser going into administration followed rumours on Friday that the company’s operating licence had been revoked. This has since been confirmed by Farmer’s Weekly among others.
Dairy giant Muller is among the major companies who were having their milk transported to them by Lloyd Fraser, who have around 70o staff on its books.
In a joint statement published on mywelshpool.co.uk, Montgomeryshire MP Craig Williams and MS Russell George confirmed that plans were underfoot to find alternative transporters for milk collections to continue.
“The news that Lloyd Fraser has gone into administration is extremely sad. I will be working with partners to support the firm, and especially staff from Four Crosses who are directly affected. Although the situation is at a very early stage, Russell and I have been liaising closely with both Muller and Arla this morning. They assure me that contingency plans are already in place to ensure collections will still take place over the weekend, and that all of their milk producers will be paid. We will continue to work closely with the farming unions and affected companies over the coming days and weeks.”
The NFU’s dairy board chairman, Michael Oakes also told the BBC:
“We are working with others in the dairy supply chain to determine the extent of the impact on our members. As new collection plans are put in place, we would urge dairy producers who are affected to contact their milk buyer as soon as possible.”
Lloyd Fraser’s parent company, Barbican Capital, has said it is “appalled” by the decision to put the company into administration.
In a statement forwarded to trans.iNFO today, a spokesperson for Barbican Capital said:
“Barbican Capital is contesting the decision to put the Lloyd Fraser group of companies into administration as a consequence of the actions of Close Brothers Limited and Close Invoice Finance Limited.
Our immediate priority is to ensure that our employees and our customers are impacted as little as possible from Close’s actions. Once we have done so, we will look to Close to seek compensation for the material losses that they have caused to the Lloyd Fraser group for putting it into administration when it was wholly unnecessary.”
Barbican Capital, the owner of the Lloyds Fraser group of companies, is appalled by the actions of Close Brothers Limited and Close Invoice Finance Limited which, we believe, has led to our group of companies being incorrectly placed into administration and unnecessarily losing related licenses required to meet our customers’ needs.
The actions of Close Brothers has had a major impact on the supply of milk in the UK, as well as the fashion industry – two sectors which Lloyd Fraser Holdings provides vital logistical support to. Without any warning, our employees, their families, and our customers have seen their employers and suppliers, each a viable business, closed quite literally overnight due to the unnecessary and irresponsible actions of Close Brothers, despite the solvency of the companies.
This goes way beyond the closure of a bank account. This is ‘debanking’ on a terrifying scale which will have an impact on hundreds of employees, the UK’s hard working milk farmers and the nation’s industry.
These communities have felt the unnecessary consequences of what we consider to be major flaws in Close’s IDEAL client interface portal, which we recently discovered caused huge financial issues for and underfunded our business. On identifying these problems Lloyd Fraser understandably looked to replace Close as our banking partner. This was communicated to Close and an orderly handover was agreed for the end of September. As part of this transition, any monies owed to Close by any Lloyd Fraser company would be discharged in full on or around 29th September 2023.
However, on 1st September 2023, without warning, and in breach of the agreement to migrate our business away from Close in an orderly manner, Close refused to operate our facility as normal. This has subsequently led to the Lloyd Fraser group companies being put into administration quite literally overnight.
We believe that these tactics from the bank are tantamount to bullying and are aimed at a group of companies which were on the upward trajectory, creating jobs and meeting our customers’ needs. Close’s actions and the subsequent administration from those actions have left 700 committed Lloyd Fraser employees uncertain as to whether they will have a job next week.
With the actions of parts of the banking sector already under the spotlight, it is surprising that Close is willing to adopt such oppressive tactics. At a time when confidence in the banking sector is low, it is a major concern that subsidiaries of a London Stock Exchange listed company that is regulated by the Financial Conduct Authority is able to act in such a way.
Close Brothers’ behaviour now risks a default on a Covid loan from the British Business Bank, which was essential to ensure the continued operation of our business and supply to our customers during the pandemic.
With all of these factors in mind we have engaged a legal team to fight this administration and seek justice for the actions of Close.”
Unfortunately, Lloyd Fraser were far from the only UK haulage firm to enter administration last week.
It has been widely reported that Knights of Old and Steve Porter, both of the KNP Logistics group, have gone into administration. Similarly to Lloyds Fraser, the administrations have yet to be confirmed by Companies House. However, local news reports indicate that the moves into administration have already taken place.
According to the Island Echo, Steve Porter drivers were informed of the news of Friday, when they were also told that they were “unlikely to get paid”. Knights of Old belong to the same group, and some drivers have taken to social media to show their sadness at the 20-year-old haulage firm potentially going under.
Writing on Facebook, Royal Mail driver Alan LA Lockey said: “Sad to hear 158-years-old Northamptonshire-based Knights Of Old, and the rest of their associated companies which formed KNP Group, have gone into administration. Hope they can be saved.”
Given that Steve Porter’s trucks are expected to be parked up, there has been concern that the Isle of Wight, which the haulage firm regularly transported goods to, could run into supply problems.
Commenting on the situation, ferry operator Red Funnel told the Isle of Wight County Press:
“We understand this will cause some nervousness among businesses on the Island. Red Funnel is working with other freight distribution partners and Island logistics businesses to ensure the continuity of supply to the Island. Red Funnel provides a lifeline service to the Isle of Wight, and we’re committed to assisting Steve Porter Transport’s customers during this difficult time.”
KNP Logistics’ last financial statement, for the year ending May 2022, offered little signs of any threats to the company’s future. Despite the challenges presented by covid, Brexit, and the rise in fuel prices sparked by Russia’s invasion of Ukraine, the group’s operating profits increased from £1.5m to £1.9m. The company’s statement also refers to new contract wins, as well as how its in-house driver academy meant it wasn’t as badly affected by the driver shortage as some others.
Employees of Nelson Distribution, which was also part of the KNP Group prior to administration, are nonetheless set to keep their jobs after Kinaxia Logistics confirmed it had bought the company.
On the Kinaxia Logistics website, Simon Hobbs, the company’s chief executive, said:
“We are pleased to have reached agreement to acquire the trading and assets of Nelson Distribution. It’s a good business and an excellent fit for Kinaxia. We share the same values, and Nelson Distribution is based in a good strategic location for our group. We are pleased to welcome the entire Nelson workforce and customer base to the Kinaxia family of businesses, and look forward to working with them and continuing to provide their customers with the great service they have been used to.”
Meanwhile, one haulage firm’s entry into administration that has been confirmed by Companies House is Glasgow Car Movers Limited. The company had operated for over 20 years, but had recently struggled to deal with inflationary pressures. The administrators say they are now set to wind down the company in an orderly manner.
Photo: EDDIE / Flickr / CC BY-ND 2.0