The news from Entu only got worse on Thursday. Trading of shares in the company were suspended, and the latest update was sounding the death knell:
Entu (UK) plc, (the “Company”) confirms that whilst it is continuing advanced discussions with a third party in relation to a proposed refinancing, based on the current discussions and regardless of whether or not an agreement is reached, it is likely that the parent company will be placed into administration with a view to selling its trading businesses. The Board further reports that the current proposals that are being considered attribute no value to the equity in the Company.
Pending resolution of the above and clarification of its financial circumstances, the Company has applied for suspension of trading in the Company’s ordinary shares on AIM with effect from 7:30 a.m. today.
The Board will provide a further update shortly.
Although this news probably isn’t a surprise to many, it is nonetheless sad to see a company of this size end up in such a situation. Remember, there are going to be people, good people, the sorts that keep the company going in the background, that are going to lose their jobs as a result of this. So whilst it is easy for us to take a clinical look from the outside looking in, there are real world impacts happening as we read this.
Officially not yet in administration (I’m keeping an eye out for an official press release) Entu is soon likely to be there according to the statement above. Make no mistakes, this is serious stuff for our industry to digest, and a serious warning for certain other companies.
This is big for the industry too. So what would happen if a company of this size were to fail completely.
Exposure
As with any major business that fails, it doesn’t just affect the people directly at the company, but all the other businesses connected with the company too.
Remember, Entu is a group of businesses, consisting of:
- Zenith
- Weatherseal
- Penicuik
- St Helens Glass
- Europlas
- St Andrews Home Improvements
- Entu Home Energy Solutions
- Zest
- Astley
Job Worth Doing are also connected with the company, who carry out much of their installation work. There are some big glazing industry names in that list. It will be a hard task for the administrators to pick apart this group and find anything of much value. As an industry it may be time to start contemplating a sector without these names.
The ones most exposed to this toxic situation will be the suppliers to this group. Many of us already know who they are, and I can promise you that they will already be looking at their accounts and putting together a list of what is owed. This is a big business, the amounts won’t be negligible. At this point suppliers to Entu will be looking at what they believe can be salvaged and what they might have to write off as bad debts.
This is where the domino effect starts to really hit hard. If Entu goes without any deal, they will also take with them a lot of money that is owed but simply not there. There is very little that the suppliers can do about that. The question then is how hard that is going to hit them. There have been many occasions, be it small or large companies, that businesses have gone under owing suppliers money and the amounts have been so great that the suppliers have either been close to closing or have gone under too as a result of that lost income.
Exposure. All those connected to Entu will now be trying to find out how big their own damage bill is going to be.
Away from suppliers, Job Worth Doing is worth taking note of too. As of yet it is unclear how badly they will be damaged from this. Presumably they will have quite a large contract with Entu, who will give them a lot of their installation work. If Entu is unable to be saved either by buyout or reduced form via administration, where is the replacement work going to come from? Do they have other deals with other groups lined up ready to fill that void? The next question will be about existing contracted work. If they don’t think they will get paid will the work that is due to be installed into home owner’s properties be put on hold or cancelled? A question for the administrators I guess, but you can already see the mountain of problems racking up.
As it stands, if they fail to be bought, and nothing much can be salvaged via administration, there are a lot of people and companies who stand to lose a lot if Entu disappears from the industry altogether.
A stark warning
I don’t think I can overstate the significance of what is happening right now. The effects of an Entu withdrawal from the market would be sharp, widespread and depressive. It will have significant ripples across the sector which in turn could very easily knock over a few more dominoes along the way.
The industry really does need to look at what is happening here and view this as a stark warning. The worrying thing is, there are even bigger groups out there, groups exposed to this one and others, which if they were ever to fall, would cause some serious damage to the sector.
It should also serve as a warning to all businesses, large and small, that outdated businesses models, sales techniques and attitudes to customer service will be the end of you. This is 2017, not 1987, and the glazing industry has matured a lot since the first introduction of PVCu to the market. We have all heard the reports of some of our biggest retailers struggling on the sales side in a serious manner this year. If this isn’t a wake up call to them to change their ways and examine how better to run their companies, then maybe they shouldn’t be in business at all.
Perhaps some parts of the Entu group could be saved. Remember there are some well known companies within the group. Those with the cash available might look to pick up some of the smaller, less debt-riddled parts and amalgamate them into their companies. Of course that would mean a few jobs could be saved, which is a good thing. No one should be wishing companies and jobs away, but we all need to look at what is happening here and learn how to avoid landing in such a situation.
This story is fast moving and I’ll be sure to update DGB here if and when any further announcements are made.
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Weatherseal is a fraud. I signed up for full double glazing and had windows and doors fitted in June 2017. Two windows have now cracked but whoever has taken over the company has refused to honour the guarantee. I recommend anyone thinking of using Weatherseal to keep well away.
We had 7 windows fitted Feb 2017 and every one of them suffer condensation..( sometimes bad enough to have water run from the window sill on to the floor ) I contacted Weatherseal today who don`t want to know about it as they tell me that the fitters( Job worth doing ) went into liquidation in Aug of last year .So having spent over £6000 , now to be left with issues which our 10 year guarantee means nothing! ( But Weatherseal can do a call out to us at a cost of £100 plus any other costs which may… Read more »
We purchased windows and patio doors with an extended guarantee. Had to get Weatherseal out several times post installation to fix issues of their making. Juts this month our patio doors developed a problem and we call Weatherseal and this is the first we heard of the liquidation but my wife said we had this extended guarantee and we were redirected to Job Worth Doing – the guy was out the other day and fixed the doors no mention of them being in liquidation
We had our windows and doors fitted towards the end of 2015/16. Although our windows are fine, the front door which we paid a lot of money for, began changing colour and pealing, within the first two years. We contacted Weatherseal on several occasions to complain and ask if someone could asses it. It has got worse and worse, not only the door itself, but the brass work is dull and oxidising! We were told that its not in warrantee even though it is! Then we were told it was either excessive sunlight or our fault for cleaning it with… Read more »