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routeone > News > HCT Group ceases trading and enters administration
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HCT Group ceases trading and enters administration

routeone Team
routeone Team
Published: September 29, 2022
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HCT Group enters administration and ceases trading
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HCT Group ceased trading and entered administration on Friday 23 September, bringing an end to the social enterprise after it “ran out of road.” Neville Side, Martha Thompson and Mark Thornton of BDO LLP have been appointed joint administrators of the business.

The collapse followed a period of turmoil for HCT. Since early August it had seen the sudden closure and subsequent entry into administration of its Yorkshire operations, the sale of Transport for London contracted work to Stagecoach, the closure of its business in Bristol and the disposal of operations on the Channel Islands to Kelsian Group.

Writing on LinkedIn, former HCT Group Communications Director Frank Villeneuve-Smith says that the organisation “has been rocked by multiple challenges” that date as far back as difficult trading before COVID-19 and which had been compounded by a surge in costs and the financial impact of the pandemic period.

“This has led to unsustainable commercial losses and we see our situation as irrecoverable,” adds Mr Villeneuve-Smith.

He notes that the sale of some work or the transfer of routes to other operators has protected the livelihoods of “the overwhelming majority” of former HCT Group employees and ensured most services have continued. However, where that has not been the case and provision has ceased, Mr Villeneuve-Smith says that he is “saddened” by the outcome.

“Closure is the last possible outcome we wanted, and is a very sad day for everyone at HCT Group. Everyone here has worked tirelessly to put the organisation on a sustainable footing and we have done everything in our power to prevent this situation, but our position cannot be sustained any further. We have run out of road.”

HCT Group began in 1982 as Hackney Community Transport, later growing in London and further afield. Mr Villeneuve-Smith adds that its demise is not as a result of its status as a social enterprise, but because of “unique circumstances that we are living through.”

HCT’s most recent accounts, for the extended period between 1 April 2019 and 28 September 2020, show a deficit of £10.3m on an income of £123.7m. During that period, it breached covenants on loan facilities but was provided with waivers by all lenders.

Writing in that report, Chief Executive Lynn McClelland noted that the group had earlier implemented a “major restructuring programme to remove costs,” adding her belief that “significant efficiencies” were still to be found within the organisation and that the trading position to September 2021 had improved considerably.

However, HCT was at that point in arrears to HMRC – for which a time to pay agreement had been reached – and with the Department for Transport for reasons that were undisclosed, although related to the COVID-19 pandemic. In the latter case, no such time to pay agreement had been reached by September 2021.

It was expected that HCT would be making arrears payments for two to three years from that point “and that further funding may need to be raised in the next 12-24 months to support continued growth and time to pay arrangements,” the strategic report noted.

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