Industry Spotlight - Commercial Catering & Events
Commercial Catering & Events have been massively impacted by the Covid-19 pandemic. Throughout 2020 and 2021 there have been three government mandated lockdowns and restrictions on number of attendees for large events. As well as the closures, further challenges included social distancing measures, outdoor only openings, curfews, tier systems, mandated mask wearing, the ‘pingdemic’ and the rule of 6. Events companies rely on weddings, parties and funerals for their survival, all of which were restricted for a significant period of time.
It’s no surprise that events and catering companies have become a noticeable trend in the insolvency statistics and we have definitely noticed an uptake in events related instructions. The key issues we have noted in the sector are as follows:
· Inability to trade due to lockdown
· Loss of staff
· Supplier issues and rising prices
· Repayment of bounce back loans and CBILs
· Rent and/or mortgage arrears
· Business rates
· Covid-19 compliance costs
· VAT arrears
· No online or delivery option
· Winding up petitions
We have been aware of many companies seeking advice as early as summer 2020, but the continued government support has resulted in decisions being deferred. However, since winding up petitions for debts above £10,000 came back into operation on 1st October 2021 and furlough finally ended, decisions are now being made for such businesses.
The assets that an events company can own are included but not limited to; commercial catering equipment, furniture and decor, vehicles, wet and dry stock, trademarks and branding, websites and social media accounts, customer databases and goodwill. There is also potentially a leasehold interest (which can often be a liability rather than an asset) and occasionally a freehold interest, although this is rare due to the rising costs of property.
So how can we help? A valuation is a key part of early advice. It can clarify your position and aid with the decision-making process. It is also a way of identifying surplus assets or elements of the business that can be sold off to raise capital. In an insolvency situation, any sale of a business or assets is going to be subject to scrutiny, and a valuation report will demonstrate to creditors and any proposed insolvency practitioners that Market Value has been achieved.
If we can be of assistance to you or any of your clients, please do not hesitate to get in touch on 01425 200366 or firstname.lastname@example.org