On 23 November, 2012, Moving Services Group UK Ltd (t/a Pickfords) went into administration. On appointment, the administrators sold the business and assets of Moving Services Group UK Ltd (MSG UK Ltd) to Pickfords Move Management Ltd.
The official press release from BDO, the appointed administrators, states: “This outcome preserves all 900 jobs and prevents the demise of a 400 year old household name. With this sale, the business can now move forward on a secure financial footing. Going forward, it will be business as usual at all sites, operating under the Pickfords name, and all contracts, moves and orders will be fulfilled. No disruption at all is anticipated and clients will continue to receive the same high standards of Pickfords service.”
What events led to this change?
Pickfords explained that since 2008, when two of the directors were appointed, one of the main priorities for management had been to rationalise the business, control and reduce overheads, thus enhancing profitability whilst maintaining the branch network to service clients throughout the UK. During the 2009 and 2010 financial years MSG UK Ltd completed numerous, significant cost-cutting exercises to set the platform for growth in profitability. The steps taken included the move of the company HQ to Wembley and significant reductions in the business’ property lease costs and fixed salaries.
Nevertheless, the passage to net profitability was not achieved, partly due to the depressed UK housing market and an inability to significantly improve prices, but also due to significant legacy commitments which included a defined benefit pension scheme. The decision to restructure was taken to preserve jobs and provide continuity for customers. The highest priority for the directors of the company was to ensure that the Pickfords name, which has been synonymous with moving home for over 350 years, returned to profitability and a strong financial footing.
How will the change affect jobs?
The company said that it won’t as all 900+ jobs within the company have been preserved following the reorganisation under TUPE regulations.
How will this effect customers?
Pickfords said that effectively it’s business as usual. The business will continue operating under the Pickfords name and all contracts, moves and orders will be fulfilled without disruption to customers. For overseas customers MSG UK Ltd had an advance payment guarantee scheme but it will not be called upon as Pickfords Move Management Ltd will complete all shipments in transit. The new company also has an advance payment guarantee scheme in place to comply with BAR rules.
Pickfords said that it will continue to tender for all significant new contracts and the improvement in its balance sheet will put it in a better position to win more business.
How will this change affect Pickfords’ membership of the BAR?
Pickfords Move Management Ltd submitted an application to BAR for membership and requested immediate entry under the ‘successor in business’ rules that form part of the membership criteria. The company said that on Friday 7th December BAR confirmed that its application had been successful so the new company, trading as Pickfords, is a full member of BAR already.
What does this mean for Pickfords in the future?
Pickfords’ spokesman said that it has every intention of remaining at the forefront of the UK moving industry and will continue to offer the same portfolio of services across the length and breadth of the UK. “We will also look to continue our improved relations with BAR and its members as we see the need to work closer with industry during these difficult economic times for all of us. We must continue to charge the right price for our services, stay firm when times get tough, continue to rationalise our cost base where we can and keep all costs under control. However we can now also look to invest more aggressively in new products and services and we look forward to 2013 and beyond with renewed optimism.”
Creditors and the pension fund
With regard to creditors, Pickfords has confirmed that it has made a commitment to BAR and its members that they shall not be disadvantaged as this was a requirement of the new company’s application for membership.
The issue surrounding the removals of the defined benefit pension scheme from the company’s balance sheet is one that is both real and emotive for its members. Pickfords said that the pension scheme administrators will be communicating with pension members in the very near future. Any members that need further information should contact the administrators, Barnett Waddingham, directly.
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