More than 60 jobs were lost when Kingston Modular Systems closed after almost 10 years of trading
A Hull company which closed down with more than 60 job losses collapsed after an unhappy client launched a legal bid and withheld more than £500,000. Kingston Modular Systems, which traded for almost 10 years from its factory and offices at Sutton Fields Industrial Estate in Hull, tumbled into administration in September with 62 jobs lost, when an 11th-hour bid to save it fell through.
Founded in 2016 by directors Carl Galbraith and Kris Robinson when their former employer went into administration, the company made its name designing and making modular buildings and luxury park homes, for the healthcare, education and leisure sectors. During the pandemic it also helped to lead the fight on coronavirus by delivering new hospital wards to the frontline, including the construction of a 28-bed Covid-19 ward which was sent to London in April 2020.
During the summer, however, it enlisted business advisors from Westgates Restructuring after coming up against cash flow issues. Frazer Ulrick, of Westgates Restructuring in North Ferriby, was appointed as administrator for the business, telling how a fall in demand, coupled with a bad debt, had triggered his appointment.
Now new documents show Kingston Modular Systems collapsed with debts of £1.7m, with unsecured creditors owed £1.5m. The report highlights how the firm – which had 100 employees and turnover of £17m during a peak trading year of 2023 – operated on significant projects, with specific requirements made by customers which could be impacted by the timing of major projects.
The report says: “The company experienced a downturn in trading in the year to 2024 due to delays in securing orders on some major projects. In addition, the revenue generated from the leisure industry decreased from £6m in 2023 to £2m in 2024 as demand decreased and foreign holidays returned following the Covid 19 restrictions.”
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It made 30 redundancies that year, cutting headcount to 70 and also secured a £400,000 investment, but this “was not sufficient to ensure its long term future”. Then in July this year, the firm was dealt its biggest blow when it received a legal letter from a customer who claimed Kingston Modular had breached a contract, the report said.
The unnamed client said it would offset what it claimed were its costs against another project, and denied that it was due to pay £585,000. The Kingston Modular directors disputed this and “have responded a number of times via their appointed solicitors”, but the administrator says they were not given an opportunity to resolve any of the snagging or other issues raised.
The administrator adds in his report: “As a result of this non-payment, the company’s invoice financing facility provider froze the facility. This has caused significant cashflow issues resulting in them no longer being able to pay debts as and when they fell due.”
Attempts were made to find new owners, and the documents revealed that 22 interested parties initially showed interest. In the end, however, just one sole joint offer was made by two companies, and this was knocked by the administrator. A revised offer was never made so the deal fell through, resulting in the company closing.
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