Colson Castors was founded in 1946 and is based on Bagnall Street in West Bromwich. The company imports and manufactures castors, wheels, accessories and special products for a variety of mobile appliances for the retail, medical and industrial sectors.
Colson had a turnover of approximately £12m in 2015 but, despite a number of operational improvements, continued to make an overall loss. Its parent company, the Colson Group, provided significant funding to support the business, including annual deficit contributions of £400,000, in addition to the £100,000 per year levy paid to the Pensions Protection Fund (PPF).
However, in December 2016 Colson Castors entered administration owing unsecured creditors, including suppliers and employees, more than £32m. The company’s pension deficit was approximately £12m and management accounts showed pre-tax losses of £1.9m.
The joint administrators believe the sale to Colson UK Ltd delivers the best outcome for the company’s creditors and stakeholders, and they will now market the company’s freehold property and residual assets to maximize the return. Since the administrators were called in, 17 staff have been made redundant, but the deal secures the jobs of the remaining 68 employees, most of whom are based in the West Midlands.
The new company will continue to manage the business from its current premises while it arranges to relocate the assets purchased to a new site in the area. Colson UK aims to work hard to ensure that there are no interruptions in product delivery during the transitional period.